LEADING EDGE PACKAGING INC, S-1/A, 1996-11-27

LEADING EDGE PACKAGING INC
S-1/A, 1996-11-27
MISCELLANEOUS NONDURABLE GOODS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 27, 1996.

REGISTRATION NO. 333-12911
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 3
TO
FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LEADING EDGE PACKAGING, INC.
(Exact name of registrant as specified in its charter)

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<S> <C> <C>
DELAWARE 22-3432883 5199
(State or other jurisdiction (I.R.S. Employer (Primary Standard
of incorporation or organization) Identification No.) Industrial Code)
</TABLE>

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EMPIRE STATE BUILDING
350 FIFTH AVENUE, SUITE 3922
NEW YORK, NEW YORK 10118
(212) 239-1865
(Address and telephone number of registrant's principal executive offices)
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CASEY K. TJANG
LEADING EDGE PACKAGING, INC.
EMPIRE STATE BUILDING
350 FIFTH AVENUE, SUITE 3922
NEW YORK, NEW YORK 10118
(212) 239-1865
(Name, address and telephone number of agent for service)
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copies to:

<TABLE>
<S> <C>
JOEL S. FORMAN, ESQ. LAWRENCE B. FISHER, ESQ.
BONDY & SCHLOSS LLP ORRICK, HERRINGTON & SUTCLIFFE LLP
6 EAST 43RD STREET 666 FIFTH AVENUE
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10103
(212) 661-3535 (212) 506-5000
</TABLE>

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Approximate date of commencement of proposed sale to the public: AS SOON AS
PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /______________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /______________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>

SUBJECT TO COMPLETION, DATED NOVEMBER 27, 1996

PROSPECTUS

[LOGO]

1,250,000 SHARES OF COMMON STOCK
---------------------

Leading Edge Packaging, Inc. (the "Company") hereby offers 1,250,000 shares
of common stock, par value $0.01 per share ("Common Stock"). Prior to the
offering, there has been no public market for the Common Stock and there can be
no assurance that such a market will develop after the completion of the
offering or, if developed, that it will be sustained. It is currently
anticipated that the initial public offering price will be $6.00 per share. For
information regarding the factors considered in determining the initial public
offering price of the Common Stock, see "Risk Factors" and "Underwriting." The
Common Stock has been approved for quotation on the Nasdaq National Market
("Nasdaq") under the symbol "LEPI" subject to official notice of issuance.
------------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE
SUBSTANTIAL DILUTION. SEE "RISK FACTORS" BEGINNING ON PAGE 6,
AND "DILUTION."
---------------------
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.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC DISCOUNTS(1) COMPANY(2)
<S> <C> <C> <C>
Per Share.......................................... $ $ $
Total(3)........................................... $ $ $
</TABLE>

(1) Does not include additional compensation payable to Gilford Securities
Incorporated (the "Representative") in the form of a non-accountable expense
allowance. In addition, see "Underwriting" for information concerning
indemnification and contribution arrangements with the Underwriters and
other compensation payable to the Representative.

(2) Before deducting estimated expenses of $905,000 payable by the Company,
including the Representative's non-accountable expense allowance.

(3) The Company has granted to the Underwriters an option (the "over-allotment
option"), exercisable for a period of 45 days after the date of this
Prospectus, to purchase up to 187,500 additional shares of Common Stock upon
the same terms and conditions set forth above, solely to cover
over-allotments, if any. If the over-allotment option is exercised in full,
the total Price to Public, Underwriting Discounts and Proceeds to Company
will be $ , $ and $ , respectively. See
"Underwriting."
------------------------

The Common Stock is being offered by the Underwriters, subject to prior
sale, when, as and if delivered to and accepted by the Underwriters, subject to
approval of certain legal matters by their counsel and subject to certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify the
offering and to reject any order in whole or in part. It is expected that
delivery of the shares of Common Stock offered hereby will be made against
payment, at the offices of Gilford Securities Incorporated, New York, New York,
on or about , 1996.

GILFORD SECURITIES INCORPORATED

THE DATE OF THIS PROSPECTUS IS , 1996.
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[ARTWORK: PHOTO OF PACKAGING PRODUCTS]

The Company intends to furnish its stockholders with annual reports
containing financial statements audited by its independent accounting firm and
such other periodic reports as the Company deems appropriate or as may be
required by law.

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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY SHOULD BE READ IN CONJUNCTION WITH, AND IS QUALIFIED
IN ITS ENTIRETY BY, THE MORE DETAILED INFORMATION AND THE COMPANY'S FINANCIAL
STATEMENTS (INCLUDING THE NOTES THERETO) APPEARING ELSEWHERE IN THIS PROSPECTUS.
UNLESS OTHERWISE INDICATED, ALL FINANCIAL INFORMATION AND SHARE AND PER-SHARE
DATA IN THIS PROSPECTUS ASSUME NO EXERCISE OF THE OVER-ALLOTMENT OPTION OR THE
REPRESENTATIVE'S WARRANTS. THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE
OF RISK AND IMMEDIATE SUBSTANTIAL DILUTION. SEE "UNDERWRITING," "RISK FACTORS"
AND "DILUTION."

THE COMPANY

The Company sells and distributes, in North America, packaging products used
primarily in the sale of luxury consumer goods. Its packaging products include
metal and plastic cases, optical cases, pouches and bags, and paper gift boxes.
The Company also sells display units for retail merchandising of jewelry,
watches, eyeglasses, pens, cosmetics and gold coins (the packaging products and
display units are collectively referred to herein as "Packaging Products"). The
Company's customers are mainly wholesalers and distributors of Packaging
Products and consumer product manufacturers. The Company anticipates that it
will purchase all of its inventory from Rich City International Packaging
Limited ("Rich City"), a Hong Kong company and the Company's parent. The Company
has entered into an Assignment and Distribution Agreement (the "Distribution
Agreement") with Rich City which, effective April 1, 1996, appoints the Company
as the exclusive distributor in North America of Packaging Products supplied by
Rich City. Since 1990, Rich City had supplied its Packaging Products to North
America.

Although no market data exists for the packaging products industry, based on
the number of units of luxury consumer goods sold in each category as extracted
from estimates published by the American Watch Association, MJ JEWELRY SALES and
U.S. OPTICAL INDUSTRY HANDBOOK '96 and on Rich City's average pricing data, the
Company estimates that the U.S. wholesale market in 1994 was approximately
$130,000,000 for jewelry packages of all types and approximately $140,000,000
for watch boxes, and in 1995 was approximately $54,000,000 for prescription
optical cases.

As successor to Rich City's North American business operations, the Company
plans to implement a market consolidation strategy. The Company believes that
the market for Packaging Products in North America is fragmented and lacks a
centralized, efficient mechanism for bringing such products from areas of
low-cost production to wholesalers, distributors and consumer product
manufacturers. The Company plans to consolidate this process through its own
system of purchasing and customizing high quality Packaging Products from the
Company's low-cost Asian producer and distributing the products in North
America.

To effect this strategy, the Company has leased a 2,000 square-foot office
and showroom in the Empire State Building in New York City, and a 33,000
square-foot facility in Raritan Center, Edison, New Jersey, for the Company's
warehousing, customization and distribution operations. The Company believes
that its warehousing and customizing capabilities located in the United States,
coupled with its Asian low-cost source of supply, give it an advantage over its
competitors in the North American market by enabling the Company to fill orders
and customize products on a "just in time" basis. The Company believes that its
source of supply will allow it to capitalize on lower production costs
obtainable overseas, while maintaining the high quality of its products.

3
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THE OFFERING

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<S> <C>
Common Stock offered hereby.................. 1,250,000 shares

Common Stock outstanding after the 3,125,000 shares
offering(1)................................

Use of proceeds.............................. Inventory, warehouse, light assembly
equipment, office and showroom, furniture,
computers, fixtures and equipment, sales and
marketing, and working capital. See "Use of
Proceeds."

Risk factors................................. Investment in the Common Stock offered hereby
involves a high degree of risk and immediate
substantial dilution. See "Risk Factors" and
"Dilution."

Nasdaq National Market Symbol................ LEPI
</TABLE>

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(1) Does not include 312,500 shares of Common Stock which have been reserved for
issuance upon exercise of options, which may be granted under the Company's
1996 Incentive Stock Option Plan for employees. To date, no options to
purchase shares of Common Stock have been granted under the Plan. See
"Management."

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

The selected financial data set forth below has been derived from the
financial statements of Rich City's North American Distribution Business (the
"N.A. Distribution Business") for the years ended March 31, 1994, 1995 and 1996
and the financial statements of the Company for the six months ended September
30, 1996. The financial statements of the N.A. Distribution Business for each of
the years ended March 31, 1994, 1995 and 1996 and for the six months ended
September 30, 1995, have been prepared on a "carved-out" basis as if the N.A.
Distribution Business had been operating independently. Assets and liabilities
of the N.A. Distribution Business as at March 31, 1996 were not transferred to
the Company. The financial statements of the Company for the six months ended
September 30, 1996 were prepared on an actual basis as the Company was operating
under the terms of the Distribution Agreement between the Company and Rich City,
which became effective on April 1, 1996. The unaudited pro forma statements of
income of the N.A. Distribution Business for the six months ended September 30,
1995 and for the year ended March 31, 1996 have been presented on the basis that
the Distribution Agreement had been in place since April 1, 1995. The unaudited
pro forma statement of income of the Company for the six months ended September
30, 1996 has been presented to reflect the Company's operating lease rentals as
if the operating lease were in effect on April 1, 1996. The selected financial
data should be read in conjunction with, and are qualified in their entirety by
reference to, the financial statements, the unaudited interim financial
information and the unaudited pro forma statements of income, including the
respective notes thereto, included elsewhere in this Prospectus. The historical
financial data may not be indicative of the Company's future performance as an
independent company. Results of any interim period may not be indicative of
results for the full fiscal year.

4
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SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION (CONT'D)

The interim financial information of both the N.A. Distribution Business and
the Company for the six months ended September 30, 1995 and 1996, respectively,
and the pro forma statements of income of the N.A. Distribution Business and the
Company, have not been audited but, in the opinion of management, contain all
adjustments which are of a normal recurring nature, including those to conform
with generally accepted accounting principles, necessary for the fair
presentation of the results of operations and cash flows, for the periods then
ended.
<TABLE>
<CAPTION>
(ALL AMOUNTS IN THOUSANDS OTHER THAN SHARE AND PER SHARE INFORMATION)(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RICH CITY'S
N.A. DISTRIBUTION
RICH CITY'S N.A. DISTRIBUTION BUSINESS BUSINESS LEADING EDGE
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<CAPTION>
YEAR ENDED MARCH 31, SIX MONTHS ENDED SEPTEMBER 30,
---------------------------------------------- ------------------------------------------------------
(CARVED-OUT) (CARVED-OUT) (ACTUAL)
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(PRO (PRO
FORMA)(2) FORMA)(2) (PRO FORMA)(2)
1994 1995 1996 1996 1995 1995 1996 1996
--------- --------- --------- ------------- --------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.............. $ 13,725 $ 6,311 $ 10,987 $10,987 $ 5,210 $5,210 $5,552 $5,552
Gross profit........... 4,296 2,289 4,352 3,921 2,079 1,876 1,815 1,815
Operating income....... 3,073 1,482 3,247 2,816 1,538 1,334 1,540 1,519
Income before income
taxes................ 3,052 1,473 3,201 2,769 1,516 1,313 1,540 1,519
Income taxes........... 33 -- -- 1,052 -- 499 585 577
Net income(3).......... 3,019 1,473 3,201 1,717 1,516 814 955 942
Earnings per share..... -- -- -- 0.92 -- 0.43 0.51 0.50
Weighted average number
of shares
outstanding.......... -- -- -- 1,875,000 -- 1,875,000 1,875,000 1,875,000
</TABLE>

<TABLE>
<CAPTION>
RICH CITY'S N.A. LEADING EDGE
DISTRIBUTION BUSINESS --------------------------------
(CARVED-OUT)
--------------------------------- SEPTEMBER 30,
--------------------------------
MARCH 31, 1996
--------------------------------- 1996 (AS
1994 1995 1996(4) (ACTUAL) ADJUSTED)(5)
--------- --------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital........... $ (116) $ (220) $ (194) $ 1,426 $ 7,271
Total assets.............. 4,559 1,044 1,797 3,944 9,789
Total liabilities......... 4,549 1,044 1,797 2,489 2,489
Division/company equity... 10 -- -- 1,455 7,300
</TABLE>

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

(1) The functional currency of the N.A. Distribution Business is Hong Kong
dollars. Transactions, assets and liabilities denominated in Hong Kong
dollars have been translated to the U.S. dollar at HK$7.80 to $1.00 which
approximates the market rate at all periods presented. References in this
Prospectus to "dollars" or "$" are to United States dollars and reference to
"HK$" are to Hong Kong dollars.

(2) The pro forma income statement data for the N.A. Distribution Business is
presented to reflect the pro forma effect of the Distribution Agreement as
if the Distribution Agreement had been in place since April 1, 1995. See
"Unaudited Pro Forma Statements of Income" elsewhere in this Prospectus. The
pro forma income statement data for the Company is presented to reflect the
pro forma effect of the rental expenses in the United States.

(3) Effective April 1, 1996, the Company is subject to United States income
taxes. Net income for the periods prior to that date after providing for
U.S. federal and state income taxes, calculated at a rate of 38%, would have
been $1,859,000 for year ended March 31, 1994, $913,000 for the year ended
March 31, 1995, $1,984,000 for the year ended March 31, 1996 and $940,000
for the six months ended September 30, 1995.

(4) Assets and liabilities of the N.A. Distribution Business as at March 31,
1996 were not transferred to the Company.

(5) As adjusted to reflect the receipt and initial application of the estimated
net proceeds from the sale of 1,250,000 shares of Common Stock offered
hereby at an assumed initial public offering price of $6.00 per share.

5
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RISK FACTORS

AN INVESTMENT IN THE COMMON STOCK IS SPECULATIVE IN NATURE, INVOLVES A HIGH
DEGREE OF RISK AND SHOULD ONLY BE MADE BY AN INVESTOR WHO CAN AFFORD THE LOSS OF
HIS ENTIRE INVESTMENT. IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS,
THE FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY BY POTENTIAL PURCHASERS IN
EVALUATING AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED HEREBY.

DEPENDENCE ON A SINGLE OVERSEAS SUPPLIER

The Company depends upon Rich City for all of its inventory of Packaging
Products. Rich City, in turn, depends for its inventory supply upon Dongguan
Walford Ornaments Packaging Company Limited, a joint venture (the "Joint
Venture") in the People's Republic of China ("PRC"). The Joint Venture is
controlled by a PRC enterprise and Breakspear Limited, a British Virgin Islands
company, which is an affiliate of Rich City. Although the Company intends to
engage in limited customization operations for some of the Packaging Products in
the United States, the majority of the Company's products will be manufactured
entirely by the Joint Venture, within the PRC. As a result, the Company's
ability, at least initially, to perform its sales and distribution functions
with respect to its customers in North America depends upon the supply of
Packaging Products it purchases from Rich City. See "The Company" and "Certain
Transactions."

The Company expects that typically it will warehouse generic inventory
sufficient for sales for approximately six months. However, any long-term
disruption or termination of supply would have a material adverse effect on the
business, financial condition and operating results of the Company. In addition
to the usual conditions which can disrupt or terminate inventory supplies, such
as a breakdown of equipment, performance below expected levels of output or
efficiency, labor disputes, natural disasters, inadequate supply of materials,
fluctuations in exchange rates, increase in cost of raw materials, and severe
fluctuations in the market prices for raw materials, there are special
additional risks resulting from the Company's reliance on a single source of
supply and from the fact that such source of supply is located in the PRC and in
Hong Kong, including the following:

LOSS OF EXCLUSIVITY

The Company has entered into a Distribution Agreement with Rich City
pursuant to which the Company is designated as the exclusive distributor in
North America of Packaging Products supplied by Rich City. Although the Company
has the exclusive rights to distribute in North America products supplied by
Rich City, such rights could become non-exclusive upon the occurrence of certain
triggering events, including, but not limited to, the inability of the Company
to increase its sales in the North American market by the cost of living formula
contained in the Distribution Agreement or to make certain scheduled royalty
payments to Rich City as required by the Distribution Agreement. See "Certain
Transactions."

POSSIBLE TERMINATION OF DISTRIBUTION AGREEMENT/LOSS OF SUPPLY

The Distribution Agreement between the Company and Rich City may be
terminated by either party upon the occurrence of a bankruptcy, insolvency,
liquidation or other form of dissolution or corporate reorganization by the
other party. The Distribution Agreement may also be terminated for a breach not
cured within 90 days of written notice of the breach. In the event of
termination of the Distribution Agreement, the Company would lose its sole
source of supply. There can be no assurance that the Company could locate an
alternative source of supply in sufficient time to meet its orders, if at all.

ENFORCEABILITY OF DISTRIBUTION AGREEMENT

Under the Distribution Agreement, the Company is designated as the exclusive
distributor in North America of Packaging Products supplied by Rich City. The
executive offices and a substantial portion of

6
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Rich City's assets are presently located in Hong Kong and the PRC. Rich City's
assets in the PRC are held by the Joint Venture. The Distribution Agreement
requires arbitration in New York of all disputes arising thereunder. However, in
the event the Company obtained an award in arbitration, it may be difficult
under the laws of Hong Kong or the PRC for the Company to enforce against Rich
City any judgment entered on the arbitrators' award. See "Certain Transactions."

TRANSFER OF SOVEREIGNTY OVER HONG KONG

The headquarters and a substantial portion of the assets of Rich City are
located in Hong Kong. Consequently, the Company's results of operations and
financial condition may be influenced by the political situation in Hong Kong
and by the general state of the Hong Kong economy. On July 1, 1997, sovereignty
over Hong Kong will be transferred from the United Kingdom to the PRC, and Hong
Kong will become a Special Administrative Region of the PRC (an "SAR").
According to the Company's Hong Kong counsel, Erving Brettell, Solicitors, under
the Sino-British Joint Declaration on the Question of Hong Kong (the "Joint
Declaration") and the Basic Law of the Hong Kong SAR of the PRC (the "Basic
Law"), the Hong Kong SAR will have a high degree of autonomy except in foreign
and defense affairs. Under the Basic Law, the Hong Kong SAR is to have its own
legislature, legal and judicial system and full economic autonomy for 50 years.
Based on current political conditions and the advice of Hong Kong counsel, the
Company does not believe that the transfer of sovereignty over Hong Kong should
have an adverse impact on the Company's financial and operating condition. There
can be no assurance, however, that the transfer of sovereignty or changes in
political or other conditions will not disrupt the supply of products to the
Company, which would cause a loss of revenue, a loss of customers due to failure
to timely meet orders and/or a total loss of the Company's inventory.

GOVERNMENT CONTROL OVER THE ECONOMY

The government of the PRC has exercised, and continues to exercise, control
over every sector of the Chinese economy through regulation and state ownership.
Accordingly, government actions in the future, including any decision not to
continue to support the economic reforms program begun in 1978 and to return to
the more centrally planned economy that existed prior to that time, or regional
or local variations in the implementation of economic policies, could have a
significant effect on economic conditions in the PRC or particular regions
thereof. Any such developments could affect opportunities and prospects for
foreign-invested enterprises (including the Joint Venture) and, as a
consequence, the ability of the Joint Venture to continue its manufacturing
operations in the PRC on the same terms and conditions under which it currently
operates. This, in turn, could adversely impact the Joint Venture's labor costs,
costs for the use of land, factory and equipment and/or the ability of the Joint
Venture to obtain or maintain the permits and licenses it needs to operate. Any
such effect on the Joint Venture would disrupt the supply of products to the
Company, which would cause a loss of revenue, a loss of customers due to failure
to timely meet orders and/or a total loss of the Company's inventory.
Furthermore, any increase in Rich City's production costs would increase the
price paid by the Company for its supply of Packaging Products.

ENVIRONMENTAL COMPLIANCE

The Joint Venture is, and is likely to continue to be, subject to central,
provincial and local environmental protection laws and regulations. There can be
no assurance, however, that the Joint Venture has complied, or will at all
future times comply, with such laws and regulations, that it will avoid
incurring the consequences of non-compliance or that authorities will not impose
additional regulatory requirements which would necessitate unbudgeted
expenditures for environmental compliance. Any such occurrence could have a
material adverse effect on the Joint Venture and, to the extent that the Company
depends upon the Joint Venture as a principal supplier, on the Company, in turn.
A disruption in supply could cause a loss of revenues, a loss of customers due
to failure to timely meet orders and/or a total loss of the Company's inventory.
In addition, costs of environmental compliance could increase Rich City's costs

7
<PAGE>
to produce Packaging Products. Under the terms of the Distribution Agreement,
this would increase the prices paid by the Company for its supply of Packaging
Products.

ADMINISTRATIVE AND REGULATORY COMPLIANCE

The Joint Venture's activities in the PRC are subject, in some
circumstances, to registration requirements, administrative inspections, audits
and approvals by various national and local agencies of the PRC government.
There can be no assurance that such approvals, to the extent necessary or
advisable, have been provided or will be forthcoming. Any failure by the Joint
Venture to obtain, or any determination that it has failed to maintain, obtain
or comply with the terms of, such approvals or to have complied with any
administrative or regulatory provisions could result in a disruption of the
supply of Packaging Products to the Company. A disruption in supply could cause
a loss of revenues, a loss of customers due to failure to timely meet orders
and/or a total loss of the Company's inventory. In addition, costs of
administrative and regulatory compliance could increase Rich City's costs to
produce Packaging Products. Under the terms of the Distribution Agreement, this
would increase the prices paid by the Company for its supply of Packaging
Products.

POSSIBLE EXPROPRIATION OF ASSETS

The PRC government has previously renounced various debt obligations
incurred by predecessor governments, which obligations remain in default, and
expropriated assets of private citizens and companies without compensation.
There can be no assurance that the PRC government will not, in the future,
expropriate or nationalize the assets of the Joint Venture, including its
factories in the PRC. This could result in the termination of the Distribution
Agreement and/or disruption of the supply of inventory to the Company. A
disruption in supply could cause a loss of revenues, a loss of customers due to
failure to timely meet orders and/or a total loss of the Company's inventory.

MOST FAVORED NATION STATUS

The PRC currently enjoys Most-Favored Nation ("MFN") status granted by the
United States, which results in imports into the United States from the PRC
being subject to the lowest applicable tariffs. The United States annually
reconsiders the renewal of MFN trading status for the PRC. There can be no
assurance, however, that the PRC's MFN status will be renewed in future years.
The Company believes that the non-renewal of MFN trading status would adversely
affect the pricing of any inventory of the Company consisting of products
manufactured within the PRC. Failure by the United States to renew the PRC's MFN
status, could cause an increase in the cost to import Packaging Products to Hong
Kong from the PRC, and, after transfer of sovereignty over Hong Kong, from Hong
Kong to the United States. Under the terms of the Distribution Agreement, this
would lead to an increase in prices paid by the Company to Rich City for
Packaging Products. If such prices became prohibitively high, there can be no
assurance that the Company could locate substitute suppliers of Packaging
Products outside of the PRC. Failure by the Company to locate such suppliers
would result in a loss of revenues, a loss of customers due to failure to timely
meet orders and/or a total loss of the Company's inventory.

TRADE SANCTIONS

In the past, as a result of trade disputes between the United States and the
PRC, the U.S. Trade Representative announced that the United States would impose
tariffs of up to 100% on certain imports from the PRC. If such tariffs were to
be imposed, it is possible that some of or all the Company's products would be
subject thereto. If such tariffs were prohibitively high, there can be no
assurance that the Company could locate substitute suppliers of Packaging
Products outside of the PRC. Failure by the Company to locate such suppliers
would result in loss of revenues, a loss of customers due to failure to timely
meet orders and/or a total loss of the Company's inventory.

8
<PAGE>
ACCESS TO RAW MATERIALS

The Company believes that the Joint Venture presently obtains many of the
raw materials which it uses in the manufacture of its Packaging Products from
various sources outside of the PRC. Any disruption in the supply of such raw
materials, resulting from any number of factors including increased cost,
currency fluctuation or political strife, would have a material adverse effect
on the ability of the Joint Venture to produce Packaging Products for
distribution by the Company. Such a disruption would thus cause delays in and
possibly a total loss of the Company's supply of Packaging Products, resulting
in a loss of revenue, a loss of customers due to failure to timely meet orders
and/or a total loss of the Company's inventory. In addition, an increase in the
costs of raw materials would result in an increase in Rich City's production
costs. This would increase the prices paid by the Company for Packaging Products
from Rich City under the terms of the Distribution Agreement.

NO LONG-TERM CONTRACTS WITH CUSTOMERS

Each sale by the Company of its Packaging Products is evidenced by a
purchase order, confirmation and similar documentation limited to that specific
sale. The Company does not enter into any long-term sales contracts with its
customers requiring them to make purchases from the Company. In the absence of
such long-term contracts, there can be no assurance that these customers will
continue to purchase Packaging Products from the Company and thus no assurance
that the Company will be able to maintain adequate or consistent levels of
sales.

DEPENDENCE ON LIMITED NUMBER OF CUSTOMERS AND CONCENTRATION OF CREDIT RISK

The North American market for Packaging Products is currently dominated by a
small number of large distributors who purchase Packaging Products from
manufacturers and sell them to end-users. At least initially, a significant
portion of the Company's customer base will consist of these distributors. Two
customers each individually accounted for 10% or more of Rich City's total net
sales in North America for each of the two years ended March 31, 1994 and 1995,
collectively generating approximately 75.8% and 58.0% of total net sales,
respectively. For the year ended March 31, 1996, three customers each
individually accounted for 10% or more of Rich City's net sales in North
America, collectively generating 52.6% of net sales. During fiscal 1996, sales
to Rocket Jewelry Box, Inc., Rich City's then largest North American customer,
accounted for approximately 26.6% of net sales in North America. During fiscal
1994 and 1995, sales to Rocket accounted for approximately 5.4% and 38.8% of net
sales, respectively. For the six months ended September 30, 1995 and 1996, sales
to Rocket accounted for approximately 44.2% and 31.8% of the Company's net
sales, respectively. Sales to Astucci US Inc. and Viva Optique, Inc., Rich
City's next largest North American customers during fiscal 1996, accounted for
approximately 13.9% and 12.1% of net sales, respectively. For the six months
ended September 30, 1995 and 1996, sales to Astucci US Inc. accounted for
approximately 11.4% and 13.5% of net sales, respectively. Because the Company
sells its Packaging Products to manufacturers and distributors, all of its
principal customers are also its competitors. Customers who are also competitors
of the Company include Gem Case Inc., Fuller Corporation, Rocket Jewelry Box
Inc. and Boxco Inc. There can be no assurance that any of these companies will
remain customers of the Company or that there will be adequate demand for the
Company's Packaging Products. Cessation of business with one or more of these
customers would have a material adverse effect on the Company and could result
in a substantial decline in net sales and income for the Company and/or a total
loss of the Company's business. In addition, any failure by one or more of these
customers to satisfy obligations owing to the Company for the purchase of
Packaging Products would have a material adverse effect on the Company's
business and could result in a substantial decline in net sales and income for
the Company and/or a total loss of the Company's business.

9
<PAGE>
IMPACT OF INFLATION

In recent years, the PRC has experienced periods of high inflation. The
Company's results of operations may be affected by such inflation, particularly
rising labor costs and other operating costs of the Joint Venture. Because the
price paid by the Company for Packaging Products, purchased from Rich City
pursuant to a formula contained in the Distribution Agreement, are directly tied
to the production costs of Rich City's affiliate, any increase in such
production costs will raise the prices paid by the Company for its inventory.
The Company may not be able to raise the prices of its products in the future at
the rate by which its operating costs may rise, which would reduce its profit
margin and its ability to pay dividends (should the Company determine to pay
dividends). See "Management's Discussion and Analysis of Financial Condition and
Result of Operations" and "Dividend Policy."

OVERSEAS PRINCIPALS OF THE COMPANY

Certain of the directors and officers of the Company and experts named
herein are nationals or residents of Hong Kong, the PRC or other countries, and
all or a substantial portion of the assets of such persons are or may be located
outside the United States. As a result, it may be difficult for investors to
effect service of process within the United States upon such persons, or to
enforce against them judgments obtained in United States courts, including
judgments predicated upon the civil liability provisions of the United States
federal securities laws. The Company has been advised by its Hong Kong counsel,
Messrs. Erving Brettell, Solicitors, that there is uncertainty as to whether the
courts of Hong Kong or the PRC would (i) enforce judgments of United States
courts obtained against such persons predicated upon the civil liability
provisions of United States federal or any state's securities laws or (ii) find
liability against such persons predicated upon United States federal or any
state's securities laws in original actions brought in Hong Kong or the PRC.

DEPENDENCE ON KEY PERSONNEL

The Company relies on certain key executives with whom it has entered into
employment agreements. The Company is particularly dependent upon the services
of Lip-Boon Saw, its Chairman and Chief Executive Officer. The loss of services
of one or more of the key executives could disrupt and have a material adverse
effect on the operations of the Company. The Company has applied for key-man
life insurance for Mr. Saw in the amount of $1 million for the sole benefit of
the Company. See "Management."

DEPENDENCE ON INVENTORY AND CUSTOMIZATION FACILITY

The Company's inventory and customization operation will be located in its
Raritan Center, Edison, New Jersey warehouse facility. Many of the Company's
employees, particularly in the distribution and customer service areas will work
out of this facility. Any production failures or other circumstances, including
fire, power outage, flooding or any other form of natural disaster would have a
material adverse effect on the Company's business and could result in a total
loss of the Company's current inventory and customization capability. In
addition to the loss of current revenue and assets of the Company, this could
result in the failure to fill orders on a timely basis, if at all, and a loss of
customers over the long term. The Company maintains insurance for this facility,
but there can be no assurance that proceeds from such insurance will be adequate
to cover any such losses.

NO INDEPENDENT OPERATING HISTORY AS A SEPARATE U.S. COMPANY

The Company is a newly-formed company and, as such, has no independent
operating history as a separate U.S. company. The financial statements covering
the three years ended March 31, 1996 contained elsewhere in this Prospectus, as
well as any summary or supplemental data contained herein, have been prepared on
a "carved-out" basis of Rich City's existing operations in North America. This
financial information may not necessarily reflect the results of operations,
financial position and cash flows had the

10
<PAGE>
Company been a separate, stand-alone entity during the periods presented. The
financial information included herein does not reflect the many significant
changes that will occur in the finances and operations of the Company as a
result of its operations separate from its parent, Rich City. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Certain Transactions."

CYCLICALITY

Many of the end-users of the Company's Packaging Products are manufacturers
of luxury products. During periods of economic decline, the demand for these
luxury products could decrease, which would have a material adverse effect on
the market for the Company's Packaging Products.

COMPETITION

There is substantial competition in the Packaging Products industry. The
Company competes with distributors and manufacturers of Packaging Products based
in the U.S. and overseas. Many of the Company's competitors have name
recognition in the market, longer operating histories and, in many cases, are
substantially larger and better financed than the Company. Such competitors may
use their economic strength to influence the market to continue to buy their
existing or newly developed products. New competitors may arise and may develop
products which compete with the Company's products. The Company believes that
several companies currently distribute products in North America in direct
competition with the Company's Packaging Products, including International
Packaging Inc., Gem Case Inc., Fuller Corporation, Rocket Jewelry Box Inc.,
Boxco Inc. and Gunther Mele Inc. Some of the Company's current customers
presently, or at some future point may, compete with the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business."

FUTURE FINANCING

The Company believes that the net proceeds from this offering will be
sufficient to meet its anticipated capital needs for its planned operations for
at least 12 months from the date of this Prospectus. However, there can be no
assurance that the Company will not require additional capital or financing.
There also can be no assurance that any future financing will be available on
terms commercially acceptable if and when needed. If additional financing is
required but is not obtained, the Company may be unable to further its expansion
into the North American market or remain competitive. In the past, the Company
has relied upon advances of inventory and other financing from Rich City. There
can be no assurance that such advances or financing will continue, and Rich City
is under no obligation to continue to make them. See "Use of Proceeds" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

MANAGEMENT'S BROAD DISCRETION IN APPLICATION OF PROCEEDS

Approximately $1,945,000 or 33% of the net proceeds of this offering will be
utilized to expand the Company's business, by providing working capital for
hiring additional employees, purchasing increased quantities of inventory and
possibly expanding the Company's facilities. The Company is currently unable to
predict the percentage, if any, of such proceeds that will be applied to any or
all of these items, and, accordingly, the Company will have broad discretion
regarding the application of such proceeds.

CONTROL BY PRESENT STOCKHOLDER

Upon completion of this offering, Rich City, the existing stockholder who
owned all of the issued and outstanding shares of the Company's Common Stock
prior to this offering, will own 60% of the issued and outstanding Common Stock.
Rich City will have the ability to exert significant control over the election
of the Company's Board of Directors and to influence or determine corporate
action requiring stockholder approval.

11
<PAGE>
MANAGEMENT'S POTENTIAL CONFLICT OF INTEREST; PROCEEDS TO BENEFIT PARENT

Lip-Boon Saw, Chairman of the Board and Chief Executive Officer, and Richard
Fung-Gea Wong, one of the directors of the Company, each serve on the board of
directors of Rich City, the Company's parent company. As a result of Mr. Saw's
and Mr. Wong's obligations to both companies, their dual roles could lead to a
potential conflict between the Company's and Rich City's interests.
Approximately $136,000 has been advanced by Rich City to the Company to cover
certain costs of this offering. This advance will be repaid to Rich City out of
the gross proceeds of this offering. See "Certain Transactions."

DILUTION

The amount by which the initial public offering price per share of Common
Stock exceeds the pro forma net tangible book value per share after this
offering constitutes dilution to investors in this offering. Investors
purchasing shares of Common Stock in this offering will experience an immediate
and substantial dilution in net tangible book value of $3.66 per share or
approximately 61.0%. See "Dilution."

FUTURE SALES OF COMMON STOCK BY EXISTING STOCKHOLDER; POTENTIAL ADVERSE EFFECT
ON MARKET PRICE

None of the Company's presently outstanding 1,875,000 shares of Common Stock
has been registered under the Securities Act of 1933, as amended (the
"Securities Act"). Such shares will be "restricted securities" as that term is
defined by Rule 144 promulgated under the Securities Act. In the future, such
restricted securities may be sold in compliance with the limitations of Rule
144. Generally, under Rule 144, a person who has held fully-paid-for "restricted
securities" for a period of two years may, every 90 days, sell to a market
maker, or in an ordinary broker's transaction, an amount that does not exceed
the greater of one percent of the Company's then outstanding stock or the
average weekly trading volume during the four calendar weeks preceding the sale.
Rule 144 also permits a person who is not an affiliate of the Company, and who
has held fully-paid-for "restricted securities" for a period of three years, to
sell such securities without compliance with the limitations on quantity and
manner of sale.

Except upon the consent of the Representative, all officers, directors and
the sole stockholder of the Company have agreed not to, directly or indirectly,
offer, sell, transfer, pledge, assign, hypothecate or otherwise encumber any
shares or convertible securities whether or not owned, or otherwise dispose of
any interest therein under Rule 144 or otherwise, for a period commencing on the
date hereof and ending 24 months from the effective date of the Registration
Statement. Such persons have further agreed that, for a period commencing on the
date hereof and ending 24 months following the effective date of the
Registration Statement, all sales of securities issued by the Company shall be
made through the Representative in accordance with its customary brokerage
policies. An appropriate legend shall be marked on the face of stock
certificates representing all of such shares of Common Stock. In addition,
without the consent of the Representative, the Company shall not sell or offer
for sale any of its securities for a period of 24 months following the effective
date of the Registration Statement.

All of the 1,875,000 shares of Common Stock outstanding as of the date of
this Prospectus will be eligible under Rule 144 for sale in the public market
two years from the date of this Prospectus.

The future sale of any "restricted securities" by the holders thereof or the
issuance of Common Stock upon the exercise of the Representative's Warrants or
options may have an adverse effect upon the market price of the Common Stock and
the ability of the Company to raise capital. In addition, the Company has
granted the Representative certain registration rights with respect to the
Common Stock underlying the Representative's Warrants pursuant to which the
Company may be required to register such shares beginning one year from the date
of this Prospectus. The registration of such shares could result in substantial
future expense to the Company and could adversely affect any future equity or
debt financing. Furthermore, the registration and sale of the Common Stock
issuable upon exercise of the Representative's Warrants, or even the potential
sale, could have an adverse effect on the market price of the Common Stock. See
"Shares Eligible for Future Sale" and "Underwriting."

12
<PAGE>
NO PRIOR PUBLIC MARKET; DETERMINATION OF INITIAL PUBLIC OFFERING PRICE;
POTENTIAL VOLATILITY OF STOCK PRICE

Prior to this offering there has been no public trading market for the
Common Stock, and there can be no assurance that a trading market will develop
or, if one does develop, that it will be maintained. In the event that a public
trading market does not develop, any investment in the Company's securities will
be highly illiquid. The initial public offering price has been established by
negotiations between the Company and the Representative and is not necessarily
related to the Company's asset value, net worth or other established criteria of
value. The initial public offering price should not be considered an indication
of the actual value of the securities or of prices that will prevail in the
trading market following this offering. The factors considered in such
negotiations, in addition to general conditions of securities markets at the
time of this offering, included the history of and prospects for the industry in
which the Company competes, an assessment of the Company's management, the
prospects of the Company, its capital structure and certain other factors as
were deemed relevant. See "Underwriting."

The stock market has, from time to time, experienced significant price and
volume fluctuations that are unrelated to the operating performance of
particular companies. In addition, the market price of the Common Stock may be
highly volatile. Factors such as fluctuations in the Company's operating
results, governmental regulation and general conditions in the packaging
industry may have a significant effect on the market price of the Common Stock
and may cause it to fluctuate dramatically. General economic trends such as
recessionary cycles and changing interest rates could also adversely affect the
market price of the Common Stock.

NO DIVIDENDS AND NONE ANTICIPATED

No dividends have been paid on the Common Stock of the Company. It is
anticipated that income received from operations, if any, will be devoted to the
Company's future operations. Accordingly, no dividends are anticipated in the
future. See "Dividend Policy."

LIMITATION ON LIABILITY OF DIRECTORS

The Company's Certificate of Incorporation limits personal liability of
directors to the fullest extent permitted by the General Corporation Law of the
State of Delaware. See "Description of Securities."

BARRIERS TO TAKEOVER

The Company has an authorized class of 5,000,000 shares of preferred stock
which may be issued by the Board of Directors on such terms and with such
rights, preferences and designations as the Board may determine. Issuance of
such preferred stock, depending upon the rights, preferences and designations
thereof, may have the effect of delaying, deterring or preventing a change in
control of the Company. In addition, certain "anti-takeover" provisions of the
General Corporation Law of the State of Delaware, among other things, restrict
the ability of stockholders to effect a merger or business combination or obtain
control of the Company and may be considered disadvantageous by a stockholder.
See "Description of Securities."

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK

This Prospectus contains forward-looking statements, including statements
regarding, among other items (i) the Company's growth strategies, (ii) the
impact of the Company's products and anticipated trends in the Company's
business and (iii) the Company's ability to expand its sales. These
forward-looking statements are based largely on the Company's expectations and
are subject to a number of risks and uncertainties, certain of which are beyond
the Company's control. Actual results could differ materially from these
forward-looking statements as a result of the factors described in "Risk
Factors," including, among others, regulatory or economic influences. In light
of these risks and uncertainties, there can be no assurance that the
forward-looking information contained in this Prospectus will in fact transpire
or prove to be accurate.

13
<PAGE>
THE COMPANY

The Company was incorporated in Delaware on December 15, 1995 as a
wholly-owned subsidiary of Rich City. Pursuant to the Distribution Agreement,
effective April 1, 1996, Rich City has assigned to the Company, on an exclusive
basis, its North American distribution business, together with the right to
market, sell and warehouse the Packaging Products supplied by Rich City to North
America.

The principal office of the Company is located in the Empire State Building,
350 Fifth Avenue, Suite 3922, New York, New York 10018, and the Company's
telephone number is (212) 239-1865.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,250,000 shares of
Common Stock offered hereby are estimated to be $5,845,000 at an initial public
offering price of $6.00 per share after deducting the estimated underwriting
discount and expenses (and $6,823,750 if the Underwriter's over-allotment option
is fully exercised). The net proceeds are expected to be used as follows:

<TABLE>
<CAPTION>
AMOUNT PERCENTAGE
------------ -----------
<S> <C> <C>
Inventory(1)........................................................ $ 3,000,000 51.3%
Warehouse, fixtures, and light assembly equipment and
installation...................................................... 350,000 6.0%
Office and showroom, furniture, fixtures, computers and equipment... 200,000 3.4%
Sales and marketing................................................. 350,000 6.0%
Working capital..................................................... 1,945,000 33.3%
------------ -----
Total........................................................... $ 5,845,000 100.0%
------------ -----
------------ -----
</TABLE>

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

(1) This amount represents the Company's inventory requirements for at least 12
months from the date of this Prospectus. Inventory will be purchased from
Rich City. Prior to this offering, Rich City owned 100% of the outstanding
Common Stock of the Company. Upon completion of this offering, Rich City
will beneficially own 60% of the Common Stock.

Rich City has advanced approximately $136,000 to cover certain costs of this
offering. As part of the offering expenses, these amounts will be repaid out of
the gross proceeds of the offering and are thus not listed in the table above.

The allocation set forth in the above table is subject to change based upon
actual rather than estimated expenses and changes in business conditions.
Pending use of the proceeds as described above, the net proceeds will be
invested in bank deposits and short-term, investment grade securities, including
government obligations and money market instruments, as the Company may
determine.

The Company estimates that the amounts listed in the above table together
with cash from operations will meet the Company's cash requirements for at least
12 months from the date of this Prospectus. Any additional proceeds from the
offering will be used for general corporate purposes, including expansion of
sales, operations and working capital. If the Underwriters exercise the
over-allotment option, the Company intends to add the net proceeds of such
exercise to working capital. Any net proceeds to the Company from this offering
or from the exercise of the over-allotment option which are not applied to the
commencement of operations or other corporate purpose will be invested in bank
deposits and short-term investment grade securities, including government
obligations and money market instruments, as the Company may determine.

14
<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of the Company at
September 30, 1996 and as adjusted to reflect the issuance and sale of 1,250,000
shares of the Common Stock offered hereby at an initial public offering price of
$6.00 per share and the receipt and initial application of the net proceeds
therefrom. The following table should be read in conjunction with the financial
statements and related notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
--------------------------

<S> <C> <C>
ACTUAL AS ADJUSTED
------------ ------------
Short-term debt....................................................................... $ -- $ --

Long-term debt........................................................................ -- --

Stockholders' equity

Preferred Stock, par value, $0.01 per share: 5,000,000 shares
authorized; no shares issued or outstanding....................................... -- --

Common Stock, par value, $0.01 per share: 5,000,000 shares
authorized, 1,875,000 shares issued and outstanding, actual, and
3,125,000 shares issued and outstanding, as adjusted.............................. 18,750 31,250

Additional paid-in capital............................................................ 481,250 6,313,750

Retained earnings..................................................................... 955,084 955,084
------------ ------------

Total capitalization.............................................................. $ 1,455,084 $ 7,300,084
------------ ------------
------------ ------------
</TABLE>

15
<PAGE>
DILUTION

The unaudited net tangible book value of the Company at September 30, 1996
was approximately $1,455,084, or $0.78 per share of Common Stock. The unaudited
net tangible book value per share is determined by dividing the tangible net
worth of the Company (total assets less liabilities), by the number of shares of
the Common Stock deemed to be outstanding on such date. After giving effect to
the sale of the shares of Common Stock being offered hereby and the receipt of
the net proceeds from the offering by the Company, the unaudited pro forma net
tangible book value of the Company at September 30, 1996, would have been
approximately $7,300,084 or $2.34 per share. This represents an immediate
increase in pro forma net tangible book value of $1.56 per share to Rich City,
as the current stockholder, and an immediate dilution of $3.66 per share (or
61.0%) to persons purchasing shares of Common Stock at the initial public
offering price (the "New Investors"). "Dilution" is determined by subtracting
pro forma net tangible book value per share after the offering from the initial
public offering price per share of the Common Stock.

The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Initial public offering price per share....................................... $ 6.00
Net tangible book value per share of Common Stock before the offering....... $ 0.78
Increase per share attributable to New Investors............................ $ 1.56
---------
Pro forma net tangible book value per share after the offering................ $ 2.34
---------
Dilution per share to New Investors........................................... $ 3.66
---------
---------
</TABLE>

If the Underwriters exercise the over-allotment option in full, the pro
forma net tangible book value will be $8,278,834 (or $2.50 per share), resulting
in an immediate dilution of $3.49 per share (or 58.3%) to New Investors.

The following table sets forth, at September 30, 1996, the differences in
the total consideration paid and the average price per share paid between the
existing stockholder and the New Investors with respect to the shares of Common
Stock to be issued by the Company:

<TABLE>
<CAPTION>
TOTAL SHARES TOTAL CONSIDERATION AVERAGE
--------------------- ----------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- --------- ------------ --------- -----------
<S> <C> <C> <C> <C> <C>
Existing Stockholder.................................. 1,875,000 60.0% $ 500,000 6.3% $ 0.27
New Investors......................................... 1,250,000 40.0% $ 7,500,000 93.7% $ 6.00
---------- --------- ------------ ---------
Total............................................. 3,125,000 100.0% $ 8,000,000 100.0%
---------- --------- ------------ ---------
---------- --------- ------------ ---------
</TABLE>

If the Underwriters exercise the over-allotment option in full, the Shares
of Common Stock purchased by New Investors would be 1,437,500; Percent of Total
Shares purchased by New Investors would be 43%; Total Consideration Amount
Payable by New Investors would be $8,625,000; Percent of Total Consideration
Amount Payable by New Investors would be 95% and Average Price Per Share would
be $6.00.

16
<PAGE>
DIVIDEND POLICY

The Company anticipates that it will retain all of its earnings, if any, as
working capital and that income received from operations will be devoted to the
Company's future operations. Accordingly, no dividends are anticipated.
Dividends on the Common Stock may be declared at the discretion of the Board of
Directors from funds legally available therefor. No dividends have been paid on
the Common Stock.

SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA

The selected financial data set forth below has been derived from the
financial statements of Rich City's N.A. Distribution Business (the "N.A.
Distribution Business") for the years ended March 31, 1994, 1995 and 1996 and
the financial statements of the Company for the six months ended September 30,
1996. The financial statements of the N.A. Distribution Business for each of the
five years ended March 31, 1996 and for the six months ended September 30, 1995,
have been prepared on a "carved-out" basis as if the N.A. Distribution Business
had been operating independently. Assets and liabilties of the N.A. Distribution
Business as at March 31, 1996 were not transferred to the Company. The financial
statements of the Company for the six months ended September 30, 1996 were
prepared on an actual basis as the Company was operating under the terms of the
Distribution Agreement between the Company and Rich City, which became effective
on April 1, 1996. The unaudited pro forma statements of income of the N.A.
Distribution Business for the six months ended September 30, 1995 and for the
year ended March 31, 1996 have been presented on the basis that the Distribution
Agreement had been in place since April 1, 1995. The unaudited pro forma
statement of income of the Company for the six months ended September 30, 1996
has been presented to reflect the Company's operating lease rentals as if the
operating lease were in effect on April 1, 1996. The selected financial data
should be read in conjunction with, and are qualified in their entirety by
reference to, the financial statements, the unaudited interim financial
information and the unaudited pro forma statements of income, including the
respective notes thereto, included elsewhere in this Prospectus. The historical
financial data may not be indicative of the Company's future performance as an
independent company.

The financial data for the years ended March 31, 1992 and 1993, the interim
financial data for the six months ended September 30, 1995 and 1996, and the pro
forma statements of income were derived from unaudited financial data which
include, in the opinion of management, all adjustments, which are of a normal
recurring nature including those to conform with generally accepted accounting
principles, necessary to present fairly the data for such periods. Results for
the six months ended September 30, 1996 are not necessarily indicative of the
results to be expected for the full year.

17
<PAGE>
SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA (CONT'D)
(ALL AMOUNTS IN THOUSANDS OTHER THAN SHARE AND PER SHARE INFORMATION)(1)
<TABLE>
<CAPTION>
RICH CITY'S N.A.
DISTRIBUTION LEADING
RICH CITY'S N.A. DISTRIBUTION BUSINESS BUSINESS EDGE
(CARVED-OUT) (CARVED-OUT) (ACTUAL)
------------------------------------------------------------------- ----------------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED MARCH 31, SIX MONTHS ENDED SEPTEMBER 30,
------------------------------------------------------------------- ----------------------------------
PRO FORMA(2) PRO FORMA(2)
1992 1993 1994 1995 1996 1996 1995 1995 1996
--------- --------- --------- --------- --------- ------------ --------- ------------ ---------
INCOME STATEMENT
DATA:
Net sales........... $ 4,024 $ 8,768 $ 13,725 $ 6,311 $ 10,987 $10,987 $ 5,210 $5,210 $5,552
Gross profit........ 249 1,782 4,296 2,289 4,352 3,921 2,079 1,876 1,815
Operating income.... 43 1,187 3,073 1,482 3,247 2,816 1,538 1,334 1,540
Income before income
taxes............. 43 1,178 3,052 1,473 3,201 2,769 1,516 1,313 1,540
Income taxes(3)..... -- -- 33 -- -- 1,052 -- 499 585
Net income.......... 43 1,178 3,019 1,473 3,201 1,717 1,516 814 955
Earnings per
share............. -- -- -- -- -- 0.92 -- 0.43 0.51
Weighted average
number of shares
outstanding....... -- -- -- -- -- 1,875,000 -- 1,875,000 1,875,000

<S> <C>

PRO FORMA(2)
1996
-------------
INCOME STATEMENT
DATA:
Net sales........... $5,552
Gross profit........ 1,815
Operating income.... 1,519
Income before income
taxes............. 1,519
Income taxes(3)..... 577
Net income.......... 942
Earnings per
share............. 0.50
Weighted average
number of shares
outstanding....... 1,875,000
</TABLE>
<TABLE>
<CAPTION>
LEADING EDGE
(ACTUAL)
-------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MARCH 31, SEPTEMBER 30,
------------------------------------------------------- -------------

<CAPTION>
1992 1993 1994 1995 1996(4) 1996
--------- --------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital..... $ 35 $ 1,183 $ (116) $ (220) $ (194 ) $1,426
Total assets........ 810 2,496 4,559 1,044 1,797 3,944
Total liabilities... 767 1,274 4,549 1,044 1,797 2,489
Division/company
equity............ 43 1,222 10 -- -- 1,455

<CAPTION>
<S> <C>
<S> <C>
BALANCE SHEET DATA:
Working capital.....
Total assets........
Total liabilities...
Division/company
equity............
</TABLE>

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

(1) The functional currency of the N.A. Distribution Business is Hong Kong
dollars. Transactions, assets and liabilities denominated in Hong Kong
dollars have been translated to the U.S. dollar at approximately HK$7.80 to
US$1.00, which approximates the market rate at all periods presented.

(2) The pro forma income statement data for the N.A. Distribution Business is
presented to reflect the pro forma effect of the Distribution Agreement as
if the agreement had been in place since April 1, 1995. See "Unaudited Pro
Forma Statements of Income" elsewhere in this Prospectus. The pro forma
income statement data for the Company is presented to reflect the pro forma
effect of the rental expenses in the United States.

(3) Effective April 1, 1996, the company is subject to United States income
taxes. Net income for the periods prior to that date after providing for
U.S. federal and state income taxes, calculated at a rate of 38%, would have
been $27,000 for the year ended March 31, 1992, $730,000, for the year ended
March 31, 1993, $1,859,000 for the year ended March 31, 1994, $913,000 for
the year ended March 31, 1995, $1,984,000 for the year ended March 31, 1996
and $940,000 for the six months ended September 30, 1995.

(4) Assets and liabilities of the N.A. Distribution Business as at March 31,
1996 were not transferred to the Company.

18
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
FINANCIAL STATEMENTS AND NOTES THERETO CONTAINED ELSEWHERE IN THIS PROSPECTUS.

OVERVIEW

The Company is successor to the North American distribution business of Rich
City (the
"N.A. Distribution Business"), and, accordingly, the Company's historical
financial information is derived from the operations of Rich City in North
America. Under the terms of the Distribution Agreement, Rich City has assigned
all of its business in North America to the Company, effective April 1, 1996,
with the exclusive rights to market, distribute, sell and warehouse the
Packaging Products supplied by Rich City. Assets and liabilities of the N.A.
Distribution Business as at March 31, 1996 were not transferred to the Company.

The Company's Financial Statements appearing elsewhere in this Prospectus
consist of (i) Financial Statements of the N.A. Distribution Business for the
years ended March 31, 1994, 1995, and 1996; (ii) the Company's Balance Sheet at
March 31, 1996; (iii) Unaudited Interim Financial Information for the
N.A. Distribution Business for the six months ended September 30, 1995 as well
as for the Company for the six months ended September 30, 1996; and (iv)
Unaudited Pro Forma Statements of Income for the N.A. Distribution Business for
the six months ended September 30, 1995 and for the year ended March 31, 1996
and for the Company for the six months ended September 30, 1996.

The audited financial statements for the N.A. Distribution Business, for the
years ended March 31, 1994, 1995, and 1996, and the unaudited financial
statements for the six months ended September 30, 1995, have been prepared on a
"carved-out" basis as if the N.A. Distribution Business had been in existence
and operating independently prior to the effective date of the Distribution
Agreement. The Unaudited Pro Forma Statements of Income have been prepared on
the same "carved-out" basis with pro forma adjustments made for the 6-8% mark-up
on sales under the Distribution Agreement, the estimated salaries of the
Company's employees and a 38% federal income tax, all of which costs the Company
will incur going forward. The 6.5% mark-up includes all general and
administrative costs incurred by Rich City to process orders for the Company,
including salaries, office space and use of equipment. This financial
information does not purport to represent what the results of operations or the
financial position of the N.A. Distribution Business would actually have been
had the Distribution Agreement been in effect on such date or at the beginning
of the period, or to project the results of the operations of the N.A.
Distribution Business for any future date or period.

The Financial Statements have been prepared in accordance with generally
accepted accounting principles, which, in the opinion of the Company's
independent auditors, do not differ significantly from those used in the
statutory accounts of Rich City.

FUTURE TRENDS

Commencing in the third quarter of fiscal 1997, the Company will incur
certain costs which are not reflected in either the "carved-out" financial
statements for Rich City's N.A. Distribution Business or the Company's financial
statements for the six month period ended September 30, 1996. The Statement of
Income for the six month period ended September 30, 1996 excludes expenses for
office and warehouse facilities. In addition, commencing in the third quarter of
fiscal 1997, the Company anticipates that it will incur additional costs related
to its operations as an independent entity in the U.S. These costs include
salaries estimated at $438,000 on an annualized basis, and sales commissions
from 1-3% of sales; and depreciation on property, plant and equipment estimated
at $95,000 on an annualized basis.

The Distribution Agreement provides that the inventory purchase price
payable by the Company to Rich City equals Rich City's cost to manufacture the
Packaging Products plus a 6-8% mark-up depending upon the product being
manufactured and Rich City's production schedule. Because the price payable by

19
<PAGE>
the Company for its inventory of Packaging Products is directly tied to Rich
City's manufacturing cost, any inflationary pressure on the components of Rich
City's manufacturing cost (specifically, costs of materials, labor, office and
factory overhead) would increase the purchase price paid by the Company for its
inventory. If the Company were unable to pass such an increase on to its
customers, the result would be a reduction in profits to the Company. See "Risk
Factors."

RESULTS OF OPERATIONS

NET SALES

Net sales for the six month period ended September 30, 1996 were $5,551,581
versus $5,210,228 for the six month period ended September 30, 1995. This
increase of $341,353 or 6.6% was primarily due to an increase in the size of
orders from existing customers and the addition of new customers.

For fiscal years 1994, 1995 and 1996, net sales were $13,725,079, $6,310,879
and $10,987,470, respectively. Net sales in fiscal 1995 decreased by 54% or
$7,414,200 from fiscal 1994. The decrease in fiscal 1995 sales was primarily due
to the cessation of business with Rich City's largest customer in North America
prior to July 1994, Jewelpak Corporation, a distributor of Rich City's products.
In July 1994, Rich City became involved in a dispute with Jewelpak Corporation
and companies controlled by its principal (together "Jewelpak") over the failure
of Jewelpak to make certain payments to Rich City aggregating approximately $4.3
million. Jewelpak's total purchase orders from Rich City accounted for
approximately 64% of Rich City's total sales in North America for the year ended
March 31, 1994. In the first half of fiscal 1995, the litigation between Rich
City and Jewelpak was resolved and the payments in dispute were made to Rich
City. Net sales in fiscal 1996 increased by 74.1% or $4,676,591 from fiscal
1995, as Rich City captured sales from Jewelpak's client base and increased
orders derived from its other distributor/ customers and from new customers.

COST OF SALES FROM HOLDING COMPANY/RELATED PARTY

Cost of sales from holding company/related party in the six month period
ended September 30, 1996 was $3,736,403 versus $3,131,142 during the six month
period ended September 30, 1995, an increase of $605,261 or 19.3%. As a
percentage of net sales, cost of sales from holding company/related party
increased to 67.3% from 60.1% during the respective periods. The increase in
cost of sales as a percentage of net sales was primarily due to the payment to
Rich City of an average mark-up of 6.5% of its manufacturing costs pursuant to
the Distribution Agreement. Included in the 6.5% mark-up are all of Rich City's
general and administrative costs to process orders for the Company, including
salaries, office space and use of equipment. The remainder of the increase was
the result of a variation of customer orders to

20
<PAGE>
products with higher costs in that specific period. This cost represents the
purchase price for Packaging Products paid by the Company to a manufacturing
affiliate of Rich City and, therefore, varies with the production cost for each
particular product ordered.

For fiscal years 1994, 1995 and 1996, cost of sales from related party were
$9,429,109, $4,021,908 and $6,635,318, respectively, which reflected the impact
of the cessation of business with Jewelpak and the corresponding decline in
sales. As a percentage of net sales, cost of sales from related party in 1994,
1995 and 1996 were 68.7%, 63.7% and 60.4%, respectively. The decline in costs as
a percentage of net sales was primarily due to increased efficiency in the
factory and manufacturing operations and also reflects the shift in orders
during the periods toward Packaging Products with relatively lower manufacturing
costs.

SELLING EXPENSES

During the six month period ended September 30, 1996, selling expenses were
$162,923 versus $222,812 in the six month period ended September 30, 1995. As a
percentage of net sales, selling expenses were 2.9% during the six month period
ended September 30, 1996 versus 4.3% during the six month period ended September
30, 1995. Selling expenses for the six month period ended September 30, 1996 did
not reflect certain costs, as the Company had not fully established its office
and warehouse operations in the United States. Selling expenses for the six
month period ended September 30, 1996 included travel and related costs of
approximately $37,000, which represented an increase of $24,000 from 1995, as a
result of costs incurred by Lip-Boon Saw, the Company's Chairman and Chief
Executive Officer, to expand its business in North America. In contrast, selling
expenses for the six month period ended September 30, 1995 reflect the
"carved-out" selling expenses of Rich City attributable to the N.A. Distribution
Business, including amounts spent for sales and marketing personnel and for
advertising and promotions. The greater level of Selling Expenses for the six
month period ended September 30, 1995, as compared with 1996, was attributable
to higher sales commissions of approximately $21,000 for the six month period
ended September 30, 1995, due to a change in product mix, additional freight
charges of approximately $31,000 incurred to satisfy backlog orders by air
delivery, and additional entertainment expenses of approximately $26,000. See
"Future Trends."

In fiscal 1994, 1995 and 1996, selling expenses were $441,450, $263,778 and
$451,327, respectively. This represented a decrease of 40.2% from 1994 to 1995
and an increase of 71.1% from 1995 to 1996. The changes reflect the impact of
the cessation of business with Jewelpak. As a percentage of sales, selling
expenses remained constant from fiscal 1995 to 1996 at approximately 4.1%.
Selling expenses as a percentage of sales increased from 3.2% in 1994 to 4.1% in
1995, primarily reflective of the extra expenses to expand sales after the
cessation of business with Jewelpak.

GENERAL AND ADMINISTRATIVE EXPENSES

During the six months ended September 30, 1996, general and administrative
expenses were $111,797 versus $318,680 in the six months ended September 30,
1995. As a percentage of net sales, general and administrative expenses were
2.0% for the six months ended September 30, 1996 and 6.1% for the six months
ended September 30, 1995. This decrease in costs is the direct result of the
Distribution Agreement, effective April 1, 1996, whereby Rich City will process
all orders for the Company, and will incur certain general and administrative
costs including salaries, office space and use of equipment. For the six months
ended September 30, 1995, the costs for administrative salaries, rent for office
space, and depreciation on office equipment were approximately $166,000, $30,000
and $13,000, respectively. The same general and administrative costs for the six
months ended September 30, 1996 were approximately $10,000, $1,300, and $400,
respectively. These costs for the six months ended September 30, 1996, however,
relate to the establishment of an office in the U.S. In contrast, general and
administrative expenses for the six months ended September 30, 1995 reflect the
"carved-out" expenses of Rich City attributable to the N.A. Distribution
Business, adjusted to reflect lower costs of certain items (such as rent and
postal expenses) in the U.S. versus Hong Kong. Commencing with the third quarter
of fiscal 1997, general and administrative expenses will include the expense
items as shown in the six months ended September 30,

21
<PAGE>

1996 plus warehouse and office expenses, and the Company expects that such
expenses will increase as a percentage of net sales, due to the expansion of the
operations in North America. See "Future Trends."

In fiscal 1994, 1995 and 1996, general and administrative expenses were
$781,893, $543,644 and $653,283, respectively. This represented a decrease of
30.5% from 1994 to 1995 and an increase of 20.2% from 1995 to 1996. For fiscal
years 1994, 1995 and 1996, general and administrative expenses, as a percentage
of net sales, were 5.7%, 8.6% and 5.9%, respectively. The increase in expenses
as a percentage of net sales in 1995 was primarily due to the reduction in sales
coupled with professional and other costs in connection with the Jewelpak
litigation. The reduction in 1996 was the result of efficiencies created over
the entire period by Rich City's management and an increase in sales.

OPERATING INCOME

Operating income for the six months ended September 30, 1996 was $1,540,458
versus $1,537,594 in the six months ended September 30, 1995, an increase of
0.2% or $2,864. As a percentage of net sales, operating income decreased to
27.7% from 29.5% during the respective periods. The decrease, was primarily due
to the increase in cost of sales discussed above.

In fiscal 1994, 1995 and 1996, operating income was $3,072,627, $1,481,549
and $3,247,542, respectively. This represented a decrease of 51.8% from 1994 to
1995 and an increase of 119.2% from 1995 to 1996. As a percentage of sales,
operating income for fiscal 1994, 1995 and 1996 was 22.4%, 23.5% and 29.6%,
respectively. These increases and decreases correlated to increases and
decreases in sales and expenses.

INTEREST EXPENSE

During the six months ended September 30, 1996, the Company had no interest
expense. Interest expense for the six months ended September 30, 1995 was
$22,237. Interest expense for fiscal 1994, 1995 and 1996 was $51,190, $65,057
and $53,961, respectively. This represented an increase of 27% from 1994 to 1995
and a decrease of 17% from 1995 to 1996. This item represents interest accruing
on inventory advances from Rich City's manufacturing affiliates and fluctuates
with the amount of such advances.

NET INCOME

As a result of the foregoing, the Company's net income was $955,084 and
$1,516,414 for the six months ended September 30, 1996 and the six months ended
September 30, 1995, respectively. The decrease in net income was primarily
attributable to the deduction of $585,374 payable as United States taxation
during the six months ended September 30, 1996, as compared with the six months
ended September 30, 1995 for which no United States income taxes were paid. The
N.A. Distribution Business's net income was $3,200,595, $1,472,908 and
$3,018,766, for the fiscal years ended March 31, 1996, 1995 and 1994,
respectively.

LIQUIDITY AND CAPITAL RESOURCES

For the six months ended September 30, 1996 and for each of the three years
ended March 31, 1996, the Company experienced positive cash flows of $62,731,
$2,037,507, $3,844,982 and $4,464,088, respectively, from operating activities.
In each of fiscal 1994, 1995 and 1996, cash flows were distributed to Rich
City's holding company. Beginning with the six months ended September 30, 1996
and going forward, cash flows will be retained and used to purchase inventory
and fund the Company's operations.

The Company has funded its operations through cash advances and shipment of
goods on open account from Rich City. Rich City's total capital contribution to
the Company is $500,000. Subsequent to the offering the Company does not
anticipate receiving any additional cash or other advances from Rich City nor
will Rich City continue to ship goods on open account.

The six month period ended September 30, 1996 reflects cash flows from
operating activities of $62,731 as compared with $2,070,902 for the six month
period ended September 30, 1995. This is primarily

22
<PAGE>

due to U.S. taxation, salaries and the 6-8% mark-up on sales under the
Distribution Agreement, which are included in the net income data for the six
month period ended September 30, 1996 but are not reflected in the data for the
six month period ended September 30, 1995 (although they have been included in
the pro forma data for the six month period ended September 30, 1995). The 6.5%
mark-up includes all general and administrative costs incurred by Rich City to
process orders from the Company, including salaries, office space and use of
equipment. For the six month period ended September 30, 1995, no inventory was
maintained in the U.S. The six month period ended September 30, 1996 reflects
$585,668 for inventory. Also, historically, customers have paid for Packaging
Products with bills receivable, which are essentially accounts receivable in the
form of bills of exchange, which are discountable within seven days by banks
providing such facilities. During the fourth quarter of fiscal 1997, the Company
expects to make sales on terms ranging from cash on delivery, deposit on order,
payment on receipt of a bill of lading and payment on shipment from Hong Kong or
on credit terms ranging from 30-90 days.

Net cash used in investing activities for the six month period ended
September 30, 1996 was $(29,576) and for the six month period ended September
30, 1995 was $(1,772).

Net cash used in investing activities for fiscal 1994, 1995 and 1996 was
$(104,691), $(137,409) and $(4,401), respectively. These amounts primarily
reflect the purchase of property, plant and equipment. For the six month period
ended September 30, 1996, this consisted primarily of furniture, fixtures and
equipment for establishing the Company's North American operations.

Net cash used in financing activities for the six month period ended
September 30, 1995 was $(2,300,248), representing an increase in advances to the
head office of Rich City during that period. The Company used no cash in
financing activities in the six month period ended September 30, 1996.

Net cash used in financing activities for fiscal 1994, 1995 and 1996 were
$(1,164,537), $(4,190,531) and $(4,714,815), respectively. These amounts
primarily reflect distributions, advances and repayments to and from Rich City's
head office.

Accounts receivable and bills receivable aggregated $361,715 for the year
ended March 31, 1996 and aggregated $1,779,133 for the six months ended
September 30, 1996, an increase of $1,417,418. Because the Company commenced its
independent operations, separately from the N.A. Distribution Business, on April
1, 1996, its accounts/bills receivable were presumed to be zero at that date.
The increase, however, was primarily because of the inability of the Company to
discount its accounts/bills receivable as it has not yet established its own
credit facilities. Rich City had typically discounted these receivables in the
past in Hong Kong. Under this discounting arrangement, upon assignment of a
receivable with recourse by Rich City to its bank, the bank advanced to Rich
City the full value of the receivable. The bank charged Rich City interest from
the date of such assignment to the date of payment of the receivable by Rich
City's customer. If a customer defaulted in its payment, Rich City reimbursed
its bank for the full value of the defaulted receivable. Bills receivable in the
total amount of $1,255,453 were discounted by Rich City through trade loans from
its own banks and carried on the Company's balance sheet as bills receivable
(rather than discounted as cash) for the six month period ended September 30,
1996.

The Company expects to receive estimated net proceeds of $5,845,000 from
this offering. The major portion of the proceeds will be used for purchase of
inventory and for general corporate purposes, including consolidation and
expansion of sales operations. The Company anticipates that net proceeds will
satisfy the Company's cash requirements for at least 12 months from the date of
this Prospectus. See "Use of Proceeds."

The Company's operations may require funds in addition to those raised in
this offering and cash from operations. The Company believes that after
completion of this offering it will be able to raise such funds through bank
lines of credit. There can be no assurance, however, that any such financing
will be available if and when the Company requires additional capital. Prior to
this offering, the Company relied heavily upon funding and other advances from
Rich City. There can be no assurance that any such funding or advances will be
available in the future.

23
<PAGE>
BUSINESS

GENERAL

The Company sells and distributes, in North America, packaging products used
primarily in the sale of luxury consumer goods. Its packaging products include
metal and plastic cases, optical cases, pouches and bags, and paper gift boxes.
The Company also sells display units for retail merchandising of jewelry,
watches, eyeglasses, pens, cosmetics and gold coins (the packaging products and
display units are collectively referred to herein as "Packaging Products"). The
Company's customers are mainly wholesalers and distributors of Packaging
Products and consumer product manufacturers. The Company anticipates that it
will purchase all of its inventory from Rich City. The Company has entered into
the Distribution Agreement with Rich City which, effective as of April 1, 1996,
appoints the Company as the exclusive distributor in North America of Packaging
Products supplied by Rich City. Prior to that time, Rich City had supplied its
own products to North America.

To effect this strategy, the Company has leased a 2,000 square-foot office
and showroom in the Empire State Building in New York City, and a 33,000
square-foot facility in Raritan Center, Edison, New Jersey, for the Company's
warehousing, customization and distribution operations. The Company believes
that its warehousing and customizing capabilities located in the United States,
coupled with its Asian low-cost source of supply, give it an advantage over its
competitors in the North American market by enabling the Company to fill orders
and customize products on a "just-in-time" basis. The Company believes that its
source of supply will allow it to capitalize on lower production costs
obtainable overseas, while maintaining the high quality of its products.

INDUSTRY

Based on data published by the American Watch Association, the Company
believes that approximately 128,000,000 quartz analog watches were imported into
the U.S. in 1994. Based on the Company's experience and Rich City's average
price per box, the Company believes that the U.S. wholesale market for watch
boxes was approximately $140,000,000 in 1994. Based on data published in MJ
JEWELRY SALES, the Company believes that the number of units of all types of
jewelry sold in the U.S. in 1994 was approximately 118,000,000. Based on the
Company's experience and Rich City's average pricing, the Company believes that
the U.S. wholesale market for jewelry packaging in 1994 was approximately
$130,000,000. Based on data published by U.S. OPTICAL INDUSTRY HANDBOOK '96, the
Company believes that approximately 77,000,000 prescription optical frames were
sold in the U.S. in 1995. Based on the Company's experience and Rich City's
average pricing, the Company believes that the U.S. wholesale market for
prescription optical cases in 1995 was approximately $54,000,000.

24
<PAGE>
A substantial part of North America's demand for jewelry packaging is now
supplied by Asian manufacturers. The Company believes that the two leading
exporting countries of such products to North America are Hong Kong and
Thailand, with Hong Kong's products being manufactured principally in the PRC.

COMPETITION

The Company is aware of eight substantial foreign-based manufacturers and of
six North American distributors whose products are in direct competition with
various of its Packaging Products. The cost of manufacturing Packaging Products
in North America is relatively high, causing manufacturers to seek out overseas
suppliers to fill their orders.

The Company believes that it will be able to compete by having the
flexibility to respond quickly to orders and catering to changes in customers'
design specifications; by endeavoring to offer a wider range of products than
its competitors; and by capitalizing on lower production costs obtainable
through its Distribution Agreement with Rich City, while maintaining the high
quality of its products. The Company believes it can offer its North American
customers a quick response time on short orders because of its customization
facilities in the United States.

There is substantial competition in the Packaging Products industry. The
Company competes with distributors and manufacturers of Packaging Products based
in the U.S. and overseas. Many of the Company's competitors have name
recognition in the market and longer operating histories and in many cases are
substantially larger and better financed than the Company. Such competitors may
use their economic strength to influence the market to continue to buy their
existing or newly developed products. New competitors may arise and may market
products which compete with the Company's products. The Company believes that
several companies currently distribute products in North America in direct
competition with the Company's Packaging Products, including International
Packaging Inc., Gem Case Inc., Fuller Corporation, Rocket Jewelry Box Inc.,
Boxco Inc. and Gunther Mele Inc. Some of the Company's current customers
presently, or at some future point may, compete with the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

PRODUCTS

Sales for the Company and, historically, for Rich City's North American
operations, are illustrated below by product category. See "Management's
Discussion and Analysis of Financial Condition and Results of Operation" and the
"Audited Financial Statements for Rich City's N.A. Distribution Business."

SALES ANALYSIS OF RICH CITY IN NORTH AMERICA
FOR THE FISCAL YEARS ENDED MARCH 31, 1994, 1995 AND 1996
AND OF THE COMPANY FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1996

<TABLE>
<CAPTION>
SIX MONTHS
FISCAL YEAR MARCH 31, ENDED
------------------------------------------------------------------ SEPTEMBER 30, 1996
PRODUCT CATEGORY 1994 1995 1996
- ------------------------------------- --------------------- -------------------- --------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Plastic cases........................ $5,778,769 (42.1%) $3,085,668 (49.0%) $4,192,548 (38.2%) $1,884,965 (34.0%)
Metal cases.......................... 4,733,484 (34.5) 1,295,868 (20.5) 3,203,000 (29.2) 1,754,321 (31.6)
Optical cases........................ 1,315,253 (9.6) 948,986 (15.0) 2,739,584 (24.9) 1,170,340 (21.1)
Pouches and bags..................... 1,184,797 (8.6) 536,767 (8.5) 437,623 (3.9) 438,380 (7.9)
Paper gift boxes, display items and
other products..................... 712,776 (5.2) 443,590 (7.0) 414,715 (3.8) 303,575 (5.4)
---------- --------- ---------- ---------
Total............................ $13,725,079 (100%) $6,310,879 (100%) $10,987,470 (100%) $5,551,581 (100%)
---------- --------- ---------- ---------
---------- --------- ---------- ---------
</TABLE>

The Company's Packaging Products can be broadly categorized into plastic and
metal cases, optical cases, pouches and bags, paper gift boxes and display
items. The designs and specifications for each of these products vary according
to the needs of different customers and the type of product for which they are
required. Nearly all items of jewelry, watches, eyeglasses and other luxury
products sold in the North

25
<PAGE>
American market require customized casing for their sale. Jewelry cases include
customized packaging and inserts for such diverse items as rings, earrings and
necklaces. Watches require their own special type of packaging (often different
from that of bracelets), and eyeglasses require yet a different type of case. In
addition, many of these items are merchandised on special display units for
installation in store windows and merchandise display cases.

PLASTIC AND METAL CASES

The Company sells plastic and metal cases for men's and women's accessories,
such as watches, jewelry, pens and cosmetics. Certain of the cases are designed
as boxes with separate top and bottom components. Others have their top and
bottom parts attached by a plastic or metal hinge. These boxes are usually
inserted into a paper or cardboard "sleeve", and the sleeve, containing the box,
is then inserted into an outer cardboard carton. Most of these cases contain
inside padding and inserts which are specially tailored to the items which they
will ultimately contain. Some of the cases are wrapped in a fabric exterior.
Most of them are stamped or printed with the customized logo of the manufacturer
of the item to be contained inside. Sales of plastic cases accounted for
approximately 34% of the Company's total sales for the six months ended
September 30, 1996. Metal cases accounted for approximately 32% of total North
American sales for the same period.

OPTICAL CASES

The Company also sells optical cases in a variety of styles made of metal,
plastic and fabric. The Company sells soft "slip-in" cases, soft folding cases
that snap shut, as well as hard, hinged cases. Designs of the Company's optical
cases vary from brightly colored to softer subtler prints, to metal and shiny
metallic finishes in various colors. Some cases are covered with textures such
as simulated alligator or lizard. Most metal optical cases are covered in
material (mainly leatherette) with the customer's name embossed onto the
material. The Company also sells generic optical cases without any logo for
mass-merchandising. Sales of optical cases accounted for approximately 21% of
the Company's total sales for the six months ended September 30, 1996.

POUCHES AND BAGS

Pouches and bags are used for such items as jewelry and cosmetics. They are
made mainly using artificial suede, leather or flock velvet, and are cut in
various sizes and shapes. As with the plastic and metal cases, some of the
pouches and bags contain customized logos. Most fasten by silk drawstrings.
Sales in North America of pouches and bags accounted for approximately 8% of the
Company's total sales for the six months ended September 30, 1996.

PAPER GIFT BOXES, DISPLAY ITEMS AND OTHER PRODUCTS

Paper gift boxes are used for packaging items such as jewelry, cosmetics,
pens, chocolates and cutlery. Display items used for retail merchandising
include bracelet platforms, jewelry pillows, necklace stands, ring holders and
trays. Sales of paper gift boxes, display items and other products accounted for
approximately 5% of the Company's total sales for the six months ended September
30, 1996.

FUTURE PRODUCTS

Premium and novelty items are a potential new market for the Company. This
market includes promotional and gift products such as "gifts-with-purchase" used
to promote cosmetics or gifts given by corporations to their employees or
clients with their corporate logo affixed. For example, if a company wishes to
present its employees with a commemorative item, such as a pen, the item may be
packaged in a case or box which itself has commemorative value or is reusable.
Similarly, a "gift-with-purchase" could take the form of a reusable cosmetic
pouch which contains a promotional item.

26
<PAGE>
ASSIGNMENT AND DISTRIBUTION AGREEMENT

Pursuant to the Distribution Agreement between Rich City and the Company,
Rich City has assigned to the Company all of the rights to distribute Rich
City's Packaging Products in North America, including the right to market,
warehouse and, as necessary, customize the Packaging Products. Upon payment by
the Company to Rich City of a royalty on terms at least as favorable to the
Company as those contained in the Distribution Agreement, the territorial
exclusivity which is limited to North America may be expanded to include South
America. Under the Distribution Agreement, Rich City has also granted to the
Company exclusive use of its North American customer list, as well as priority
in utilization of the manufacturing facilities, assembly line, labor force and
other applicable resources in the acceptance and fulfillment of purchase orders
issued by the Company. The Distribution Agreement has an initial term of 10
years and thereafter is automatically renewable annually. Either party can
terminate the Distribution Agreement in the event of bankruptcy, insolvency,
dissolution or liquidation of a party, or certain governmental expropriations or
condemnations of all of the assets or stock of a party, or the failure of a
party to cure its material breach under the agreement. Subject to a right of
first refusal which the Company has granted to Rich City under the Distribution
Agreement, the Company may purchase Packaging Products from any source of
supply. Under the Distribution Agreement, the Company pays to Rich City for its
supply of Packaging Products a purchase price equal to Rich City's manufacturing
cost (including direct material cost, direct labor cost and proportionate
indirect factory and office overhead) plus a mark-up of 6-8% depending on the
particular product being manufactured and Rich City's production schedule. The
6.5% mark-up includes all general and administrative costs incurred by Rich City
to process orders for the Company, including salaries, office space and use of
equipment. See "Certain Transactions."

Rich City has its own marketing and sales team based in Hong Kong. The
Distribution Agreement requires Rich City to refer to the Company all inquiries
which Rich City receives pertaining to potential sales of Packaging Products for
delivery to North America. To accommodate customers who prefer to place orders
with Rich City in Hong Kong for Packaging Products destined for North America,
Rich City will, at no charge to the Company, accept those orders for the account
of the Company and fill the order on the same terms as if the Company had placed
the order directly with Rich City. See "Certain Transactions."

STRATEGY

To effect this strategy, the Company has leased a 2,000 square-foot office
and showroom in the Empire State Building, in New York City, and a 33,000
square-foot facility in Raritan Center, Edison, New Jersey, for the Company's
warehousing, customization and distribution operations. The Company believes
that its warehousing and customizing capabilities located in the United States,
coupled with its Asian low-cost source of supply, give it an advantage over its
competitors in the North American market by enabling the Company to fill orders
and customize products on a "just-in-time" basis. The Company's source of supply
allows it to capitalize on lower production costs obtainable overseas, while
maintaining the high quality of its products.

The Company plans to expand its base of customers in the North American
market through its ability to offer Packaging Products at a relatively low price
compared with those of its competitors. Because of its arrangement with Rich
City and its U.S. warehousing and customization facilities, the Company believes
it can supply large and small orders and at a lower cost. In addition, the
Company believes that many end-

27
<PAGE>
users in the industry prefer to deal with North American distributors of Asian
products, rather than deal directly with Asian manufacturers because of the need
for a letter of credit, product quality and the availability of inventory.

The Company anticipates that its presence in North America and its strategy
to consolidate the market for Packaging Products has the potential to facilitate
the expansion of sales in the region.

PACKAGING PRODUCT CUSTOMIZATION

The Company customizes its Packaging Products both as to use (e.g., for
jewelry, eyeglasses, etc.) by adding the appropriate lining and inserts and as
to user by stamping the products with customer logos. This process will be
conducted in the Company's New Jersey facility just prior to shipment of orders.
The Company intends to manage the process with a Production Line Supervisor and
a Line Manager. The Company will use part-time assembly line workers on an
as-needed basis to conduct the customization operations. The brand name
customization process will include various techniques such as hot-stamping, pad
printing, high frequency embossing, photo imaging and metal plaque attachments.
The Company plans to consult with Rich City in the design, production and
quality control of Packaging Products.

MARKETING AND SALES

The Company's North American customers mainly consist of wholesalers and
distributors of Packaging Products and consumer product manufacturers. Consumer
product manufacturers are end-users of the Company's products, which they
purchase directly from the Company and use to package their own products.
Wholesalers and distributors of Packaging Products are companies which supply
packaging to consumer product manufacturers and retailers. As successor to Rich
City's North American customer base, which primarily consists of distributors,
the Company expects to continue sales to approximately ten principal customers,
each of whom has a relationship with Rich City. There can be no assurance,
however, that these companies will remain customers of the Company. See "Risk
Factors."

For the year ended March 31, 1996, no single customer accounted for more
than 30% of Rich City's net sales. Sales to Rocket Jewelry Box Inc., Rich City's
largest North American customer during the period, accounted for approximately
26.6% of net sales. During the six months ended September 30, 1996, sales to
Rocket Jewelry Box Inc. accounted for approximately 31.8% of net sales. Sales to
Astucci US Inc. and Viva Optique, Inc., Rich City's next largest North American
customers during the period, accounted for approximately 13.9% and 12.1% of net
sales, respectively. Sales to the ten largest customers represented
approximately 83.1% of Rich City's net sales for the same period.

The Company's Vice President of Marketing and Sales oversees the Company's
distribution process. The Company plans to organize marketing and sales into
three divisions: telemarketing, regional sales and customer service. The Company
plans to have each division headed by a salaried manager who will report
directly to the Vice President. It is anticipated that the telemarketing manager
will operate out of the Company's office in New York, with a staff of three
salaried employees, and that the regional sales manager will manage a staff of
three regional sales representatives: one for each of the Northeast, Midwest and
West coast. Sales representatives will operate on a commission basis. In
addition to its sales force, the Company plans to have a customer service
manager to address customer inquiries.

GOVERNMENT REGULATION: IMPORT/EXPORT

28
<PAGE>
PRC's MFN status, could cause an increase in the cost to import Packaging
Products to Hong Kong from the PRC, and, after transfer of sovereignty over Hong
Kong, from Hong Kong to the United States. Under the terms of the Distribution
Agreement, this would increase prices paid by the Company to Rich City for
Packaging Products. If such prices became prohibitively high, there can be no
assurance that the Company could locate substitute suppliers of Packaging
Products outside of the PRC. Failure by the Company to locate such suppliers
would result in a loss of revenues, a loss of customers due to failure to timely
meet orders and/or a total loss of the Company's inventory.

At current rates an import duty of between 5% and 20% will be payable by the
Company on the import price of metal and plastic cases imported into the U.S.
and Canada. For the year ended March 31, 1996, metal cases accounted for
approximately 29.2% of total exports of Rich City to North America; plastic
cases accounted for approximately 38.2%. If the PRC were to lose MFN status,
then the Company's products may be subject to higher tariffs and import duties
in the U.S. Although it is not possible to quantify the potential impact of
higher tariffs and duties, the Company believes that, due to the comparatively
low cost of production in the PRC, it would be able to withstand an increase in
tariffs while still being able to compete profitably in the U.S. market.

EMPLOYEES

As of October 31, 1996, the Company employs a total of six full-time
employees, including executive, sales, accounting and clerical personnel. The
Company intends eventually to hire up to 20 full-time employees, including eight
executives, six sales and telemarketing representatives, two accounting
professionals and four clerical workers. In addition, the Company plans to hire
10-25 part-time factory/assembly line workers on an as-needed basis.

FACILITIES

The Company has leased a 2,000 square-foot space for its offices and
showroom in the Empire State Building, 350 Fifth Avenue, Suite 3922, New York,
New York for a five-year period commencing July 1, 1996 at an annual rent of
$42,096. The Company also has leased for the warehousing and customization of
its products a 33,000 square-foot facility in Raritan Center in Edison, New
Jersey, for a period of five years commencing November 1, 1996, at an annual
rent of $150,336 plus 30% of certain common charges for the building in which
the facility is located. The Company has leased an apartment in Highland Park,
New Jersey, commencing September 1, 1996, for one year at an annual rent of
$15,600. The Company will use this apartment for the convenience of its sales
representatives, its officers and officers of Rich City as well as for
representatives of the Company's customers travelling to examine or purchase the
Company's products.

LITIGATION

The Company is aware of no litigation currently pending either against the
Company or against Rich City with respect to its North American operations.

29
<PAGE>
MANAGEMENT

Set forth below is certain information concerning the executive officers and
directors of the Company. Each director is elected for a term of one year at the
Company's annual meeting of stockholders and serves until the next meeting and
until his successor is duly elected and qualified. Officers are elected by, and
serve at the discretion of, the Board of Directors.

<TABLE>
<CAPTION>
NAME AGE POSITION(S) WITH THE COMPANY
- -------------------------------------- --- ---------------------------------------------------------
<S> <C> <C>
Lip-Boon Saw.......................... 39 Chairman of the Board and Chief Executive Officer
Peter Yu-Siu Chu...................... 44 President and Chief Operating Officer
Casey K. Tjang........................ 57 Director, Chief Financial Officer and Secretary
Dan Ben-Moshe......................... 39 Vice President/Marketing and Sales
Peter L. Coker........................ 54 Director
Robert B. Goergen..................... 58 Director
Richard Fung-Gea Wong................. 39 Director
</TABLE>

LIP-BOON SAW served as the Company's President from its inception through
April 1996 and has served as Chairman of the Board and Chief Executive Officer
of the Company since April 1996. From April 1994 until the time of this offering
he was also the Managing Director of Rich City, the Company's parent. Subsequent
to the offering, he will continue to serve as a director of Rich City but will
no longer serve as Managing Director. Mr. Saw is the founder and sole
stockholder of L.B. Saw & Associates, Ltd., an investment firm in Hong Kong, and
has served as its Chairman since October 1992. Mr. Saw served as the Managing
Director of Ullmann Saw Associates, an investment advisory firm, from January
1990 until October 1992. He currently serves on the boards of directors of
various privately-held manufacturing and investment advisory companies. Mr. Saw
will continue to spend a significant portion of his time in Hong Kong.

PETER YU-SIU CHU has served as President and Chief Operating Officer of the
Company since September 1996. From April 1994 until the time of this offering,
he was the General Manager of Production and Operations of Rich City, the
Company's parent. As such, he was responsible for coordinating the production of
Packaging Products by Rich City's affiliates in the PRC and the distribution
operations of Rich City, including supervision of staff dedicated to these
operations. From 1987 through March 1994, he served as General Manager of
Production of Contimach Ltd., a PRC-based manufacturer of power transmission
products, where he supervised the company's production process.

CASEY K. TJANG has served as a director and Secretary of the Company since
its inception and as Chief Financial Officer since September 1996. Mr. Tjang
served as Executive Director and President of Starlite Holdings Limited (a
public company listed on The Stock Exchange of Hong Kong, Limited), from 1993 to
1995, and was responsible for facilitating the acquisition of exclusive rights
to distribute Hallmark greeting cards in the PRC and of paper consumer products
of Warner Bros. characters in the PRC and Southeast Asia. From 1991 to 1993, Mr.
Tjang served as President and Chief Executive Officer of First Merchant Bankers,
Inc., a company specializing in corporate finance and international trading.
From 1979 to 1991, Mr. Tjang was the Managing Director and Vice President of the
International Department of Midlantic National Bank, managing corporate finance,
import-export and project financing transactions. Presently, he serves on the
board of directors of Kent Financial Services, Inc., a public company, and is
the executive director of Andrew-Case International Limited, a corporate finance
firm.

DAN BEN-MOSHE has served as Vice President/Marketing and Sales of the
Company since September 1996. From 1994 to the present, Mr. Ben-Moshe was the
President of Astucci U.S., Ltd, a wholesale distributor of packaging products,
where he was responsible for obtaining brand name optical manufacturing accounts
for the company. From 1991 to 1994, he served as a marketing agent for Jewelpak
Corp., a wholesale distributor of packaging products, where he sold packaging
products to manufacturers and retailers of jewelry, watches and eyewear.

30
<PAGE>
PETER L. COKER has served as a director of the Company since September 1996.
Mr. Coker has been a director, Executive Vice President and a member of the
Investment Policy Committee of American Asset Management Company, New York since
1978. From 1968 to 1977 he was Assistant Vice President/ Investment Officer of
Bethlehem Steel Corporation with investment responsibilities for their
self-managed pension fund. From 1977 to 1978, Mr. Coker was a senior officer at
McGlinn Investment Service, Reading, Pennsylvania. He currently sits on the
boards of directors of Remote Source Lighting International, Inc., Sweetbrier
Foods, Inc. and North Carolina State University Endowment Fund. He is also a
member of the New York Society of Security Analysts.

ROBERT B. GOERGEN has served as a director of the Company since October
1996. Since 1977, he has been the Chairman, and since 1978, the Chief Executive
Officer, of Blyth Industries, Inc., a public company and manufacturer and
importer of candles and home decorating accessories. Mr. Goergen has served as
President of Blyth Industries, Inc. since 1994. From 1990 to the present, Mr.
Goergen has served as Chairman of XTRA Corporation, a public company engaged in
the trailer leasing industry. From 1979 to the present, he has been Chairman of
The Ropart Group, a private company, whose business is investing in securities
for its own account. Mr. Goergen currently serves as a director of Blyth
Industries, Inc. and XTRA Corporation and serves on the Compensation Committee
of XTRA Corporation.

RICHARD FUNG-GEA WONG has served as a director of the Company since its
inception. From July 1994 to September 1996, Mr. Wong has served as the
Executive Director of Rich City responsible for the supervision of the
administration, logistics and finance related matters. From October 1992 through
June 1994, Mr. Wong served as Manager of L.B. Saw & Associates, Ltd. From
October 1990 until October 1992, Mr. Wong served as General Manager of Lolliman
Holdings Ltd., an investment and property holding company. Mr. Wong will
continue to spend a significant portion of his time in Hong Kong.

Lip-Boon Saw and Richard Fung-Gea Wong also serve on the board of directors
of Rich City, the Company's parent. As a result of their respective obligations
to both companies, their dual roles could lead to a potential conflict of
interest. See "Risk Factors--Management's Potential Conflict of Interest."

Under the terms of the Underwriting Agreement, the Representative has the
right to designate one member of the Company's Board of Directors. The
Representative has not exercised this right as of the date of this Prospectus.

BOARD COMMITTEES

EXECUTIVE COMMITTEE

The Board of Directors has appointed an Executive Committee consisting of
Lip-Boon Saw, as Chairman of the committee, and Peter Yu-Siu Chu and Dan
Ben-Moshe, as members. The Executive Committee is responsible for recommending
to the Board of Directors business policies and strategies for the Company.

AUDIT COMMITTEE

The Board of Directors has appointed an Audit Committee consisting of Peter
L. Coker, Robert B. Goergen and Casey K. Tjang. The Audit Committee is
responsible for recommending to the Board of Directors the engagement of
independent auditors of the Company and reviewing with the independent auditors
the scope and results of the audits, the internal accounting controls of the
Company, audit practices and the professional services furnished by the
independent auditors.

31
<PAGE>
COMPENSATION COMMITTEE

The Board of Directors has appointed an Compensation Committee consisting of
Lip-Boon Saw, as Chairman of the committee, and Peter L. Coker and Robert B.
Goergen, as members. The Compensation Committee is responsible for reviewing and
approving all compensation arrangements for officers of the Company.

EMPLOYMENT AGREEMENTS

Effective April 1, 1996, the Company entered into an employment agreement
with Lip-Boon Saw as Chairman and Chief Executive Officer for an initial term of
three years. The agreement provides for a salary of $120,000 for the first year.

The Company entered into employment agreements on September 23, 1996, with
Peter Yu-Siu Chu as President and Chief Operating Officer, and Casey K. Tjang as
Chief Financial Officer and Secretary, and, on September 24, 1996, with Dan
Ben-Moshe as Vice President/Marketing and Sales. Each of these agreements is for
an initial term of three years commencing upon the consummation of this
offering. The agreements provide for salaries for Messrs. Chu, Tjang and
Ben-Moshe of $96,000, $60,000 and $96,000, respectively, during their first year
of employment.

The employment agreements with Messrs. Saw, Chu, Tjang and Ben-Moshe each
provide that salaries for the second and third years may be determined by the
Board of Directors in its sole discretion, provided that the Board of Directors
may not fix salaries in an amount less than the employee's salary for the
preceding year and further provided that the Board may not increase the
employee's salary for any year in an amount more than the greater of 10% of the
previous year's salary or any cost of living increase. Each agreement also
provides for bonuses as may be determined by the Board of Directors in its sole
discretion. Each agreement may be terminated by either the Company or the
employee on six months' prior notice, and prohibits the employee from soliciting
other Company employees during the two-year period following his termination of
employment. Mr. Saw's employment agreement also provides that for two years
after the termination of his employment, he will not have an ownership interest
in, nor be employed by, any business which directly competes with the business
of the Company. With the exception of Mr. Saw, who is required to devote a
majority of his time and efforts to the Company's business, Messrs. Chu, Tjang
and Ben-Moshe are required to devote their full time and efforts to the business
of the Company.

COMPENSATION OF THE COMPANY'S EXECUTIVE OFFICERS AND DIRECTORS

Following the consummation of this offering, non-employee directors of the
Company will be paid a fee of $1,000 per year (payable at the end of the year)
as well as $500 per meeting attended plus costs of attending the meeting
(payable after the meeting's adjournment). In addition, certain directors are
compensated as executive officers of the Company. Directors and officers are
also entitled to participate in the Company's 1996 Incentive Stock Option Plan.

32
<PAGE>
The following table sets forth cash compensation expected to be paid to the
Executive Officers during fiscal 1997, annualized:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
--------------------------------------------
<S> <C> <C> <C> <C>
NAME AND FISCAL OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY(2) BONUS COMPENSATION(3)
- ----------------------------------------------------------- ----------- ---------- ----------- -------------------
Lip-Boon Saw............................................... 1997 $ 120,000 -- --
Chairman and Chief Executive Officer
Peter Yu-Siu Chu........................................... 1997 $ 96,000 -- --
President and Chief Operating Officer
Casey K. Tjang............................................. 1997 $ 60,000 -- --
Chief Financial Officer and Secretary
Dan Ben-Moshe.............................................. 1997 $ 96,000 -- --
Vice President/Marketing and Sales
</TABLE>

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

(1) The employment agreements with Messrs. Saw, Chu, Tjang and Ben-Moshe each
provide that the base compensation for the second and third years may be
determined by the Board of Directors in its sole discretion, provided that
the Board of Directors may not fix base compensation in an amount less than
the employee's base compensation for the preceding year and further provided
that the Board may not increase the employee's salary for any year in an
amount more than the greater of 10% of the previous year's salary or any
cost of living increase. The agreements also provide for bonuses as may be
determined by the Board of Directors in its sole discretion.

(2) This table reflects an annual salary for Lip-Boon Saw commencing on April 1,
1996. The employment agreements for Messrs. Chu, Tjang and Ben-Moshe will
become effective upon the consummation of this offering.

(3) Although the Company has adopted an Incentive Stock Option Plan for its
executive officers, no determination has yet been made regarding the award,
if any, of Common Stock under the Plan.

INCENTIVE STOCK OPTION PLAN

The named executive officers may receive, in addition to their salaries and
other compensation, options for the Company's Common Stock.

The Company has adopted the 1996 Incentive Stock Option Plan (the "Plan")
under which stock options may be granted to such officers, directors and/or,
employees of the Company as the Plan's administration committee selects. 312,500
shares of Common Stock are reserved for that purpose. Stock options entitle the
holder to acquire shares of Common Stock during a fixed period at an exercise
price equal to the greater of (i) 110% of the fair market value of the Common
Stock at the time of grant and (ii) the initial public offering price per share
in this offering. Payment by option holders upon exercise of an option may be
made only in cash. As of the date of this Prospectus, no shares of Common Stock
have been issued pursuant to the Plan.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Certificate of Incorporation includes certain provisions
permitted pursuant to the General Corporation Law of the State of Delaware (the
"DGCL") whereby officers and directors of the Company are to be indemnified
against certain liabilities. The Certificate of Incorporation also limits to the
fullest extent permitted by the DGCL a director's liability to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director, including gross negligence, except liability for (i) breach of the
director's duty of loyalty, (ii) acts or omissions not in good faith or which
involve intentional misconduct or knowing violation of the laws, (iii) the
unlawful payment of a dividend or unlawful stock purchase or redemption and (iv)
any transaction from which the director derives an improper personal benefit.
This provision of the Company's Certificate of Incorporation has no effect on
the availability of equitable remedies, such as injunction or rescission. The
Company believes that these provisions will facilitate the Company's ability to
continue to attract and retain qualified individuals to serve as directors and
officers of the Company.

33
<PAGE>
CERTAIN TRANSACTIONS

The Company has entered into an Assignment and Distribution Agreement,
effective April 1, 1996, with Rich City, the Company's sole stockholder prior to
this offering. Under the Distribution Agreement, Rich City assigned to the
Company the exclusive rights for North America to market, distribute, sell and
warehouse the Packaging Products which Rich City had supplied in the United
States and Canada. In addition, all sales of Packaging Products in North
America, as well as all sales of such products in Hong Kong or elsewhere for
delivery into North America, for which sales Rich City rendered invoices after
March 31, 1996, are for the account of the Company. Assets and liabilities of
the N.A. Distribution Business as at March 31, 1996 were not transferred to the
Company. The Distribution Agreement also grants to the Company the exclusive
ancillary right to customize those products. To facilitate the assignment to the
Company of these exclusive rights under the Distribution Agreement, Rich City
has also assigned to the Company its lists of actual and potential North
American customers for the Packaging Products. Furthermore, Rich City has agreed
to refer to the Company all inquires it receives in Hong Kong with respect to
sales of Packaging Products for delivery into North America. Under the
Distribution Agreement the Company can expand those exclusive rights to South
America upon payment of a one or more annual royalty on terms at least as
favorable to the Company as those contained in the Distribution Agreement.

The Company has agreed to pay Rich City as a royalty $2,000,000, in
installments to commence with the Company's fiscal year ending March 31, 1999.
The amount of any installment should be the arithmetic average of two percent of
net sales of the Company and 10% of the Company's earnings before taxes in the
prior fiscal year. No installment is payable with respect to any fiscal year
unless the Company in the prior year has both net sales of at least $25,000,000
and earnings before taxes of at least $3,000,000. The Distribution Agreement
requires that the Company give to Rich City the right of first refusal to supply
Packaging Products on no less favorable terms and conditions than those offered
by a third party. As to any product which Rich City fails to exercise such right
of first refusal, the Company may purchase that product from any other source.
To maintain the exclusive rights, the Company must meet certain minimum sales
increases per annum specified below.

The term of the Distribution Agreement is for a period of ten years and,
thereafter, is automatically renewed for successive additional one year periods.
Either party may terminate the Distribution Agreement on notice to the other in
the event that the other party suffers a severe financial reversal, such as the
filing of a petition in bankruptcy, or a governmental expropriation or
condemnation of material assets or capital stock, or a dissolution or
liquidation. Furthermore, the Distribution Agreement can be terminated in the
event that a defaulting party breaches a material term of the Distribution
Agreement and fails to remedy such breach within a 90 day cure period. The
obligations of the Company under the Distribution Agreement include establishing
a showroom; establishing a trained sales force to promote the sales of the
Packaging Products; conducting promotional campaigns and marketing strategies to
stimulate sales of products; attending trade fairs and expositions to market the
Packaging Products; and establishing a customization capability. In turn, Rich
City is required to allocate the manufacturing facilities it uses so as to give
first priority to the acceptance and fulfillment of the Company's purchase
orders.

The Company's exclusive rights under the Distribution Agreement are
converted to non-exclusive rights in the event that (i) the Company fails to pay
timely (including a sixty day grace period running from the notice of such
non-payment) an installment of the $2,000,000 royalty described above; or (ii)
if in any given fiscal year the Company fails to increase its sales of the
Packaging Products in North America in accordance with the cost of living
formula contained in the Distribution Agreement and the parties fail to
negotiate the minimum sales requirement to a level which the Company can
satisfy. This minimum sales increase requirement is not effective if general
economic conditions in North America mitigate against such growth, or if the
Company can demonstrate good cause for the failure to meet the minimum sales for
the year in which such failure occurred.

The purchase price for Packaging Products under the Distribution Agreement
which comprises manufacturing cost plus 6-8%. Manufacturing costs do not include
general and administrative expenses

34
<PAGE>

incurred by Rich City to process orders for the Company, including salaries,
office space and use of equipment, all of which are included in the 6-8%
mark-up.

When the Company places an order with Rich City, the Distribution Agreement
requires the Company to advance to Rich City that estimated portion of the
purchase price representing the costs of materials for the products under that
order. Rich City's invoices to the Company are to contain appropriate credits to
reflect payments made for these advances.

The Company has funded its operations through cash advances and shipment of
goods on open account from Rich City. Rich City's total capital contribution to
the Company is $500,000. In addition, Rich City has advanced on behalf of the
Company approximately $136,000 to cover some of the costs of this offering. For
accounting purposes, this amount will be carried on the books and records of the
Company as a capitalized pre-offering expense which is to be repaid to Rich City
from the gross proceeds of the offering. See "Use of Proceeds."

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of September 30, 1996 by (i) each
director and executive officer, (ii) all stockholders known by the Company to be
the beneficial owner of more than 5% of the outstanding Common Stock and (iii)
all directors and executive officers as a group, and as adjusted to reflect the
sale of Common Stock:

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
OF COMMON STOCK BEFORE OF COMMON STOCK AFTER
THE OFFERING THE OFFERING
--------------------------- -----------------------------
<S> <C> <C> <C> <C>
PERCENTAGE OF PERCENTAGE OF
OUTSTANDING OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER(1) NUMBER SHARES NUMBER SHARES
- ----------------------------------------------------------- ---------- --------------- ---------- -----------------
Rich City International Packaging Limited(2)............... 1,875,000 100% 1,875,000 60%
Rm 402-3, Join-in Hang Sing Centre
71-75 Container Port Road
Kwai Chung, New Territories, Hong Kong
Chung Hwa Development Holdings Limited(3).................. 1,875,000 100% 1,875,000 60%
Rm 402-3, Join-in Hang Sing Centre
71-75 Container Port Road
Kwai Chung, New Territories, Hong Kong
Lip-Boon Saw(3)............................................ 1,875,000 100% 1,875,000 60%
Peter Yu-Siu Chu........................................... -- -- -- --
Peter L. Coker............................................. -- -- -- --
Robert B. Goergen.......................................... -- -- -- --
Dan Ben-Moshe.............................................. -- -- -- --
Casey K. Tjang............................................. -- -- -- --
Richard Fung-Gea Wong(3)................................... 1,875,000 100% 1,875,000 60%
All officers and directors as a group (3).................. 1,875,000 100% 1,875,000 60%
(7 persons)
</TABLE>

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

(1) Unless otherwise indicated the address of each person listed in the table is
deemed to be the principal place of business of the Company.

(2) Rich City is an indirect wholly-owned subsidiary of Chung Hwa Development
Holdings Limited, a public company whose securities are listed on The Stock
Exchange of Hong Kong Limited.

(3) Messrs. Saw and Wong are directors of Rich City. Both of them disclaim
beneficial ownership of the shares of Common Stock held by Rich City.

35
<PAGE>
DESCRIPTION OF SECURITIES

THE FOLLOWING DESCRIPTION OF THE COMMON STOCK OF THE COMPANY AND THE
COMPANY'S CERTIFICATE OF INCORPORATION AND BY-LAWS IS A SUMMARY AND IS QUALIFIED
IN ITS ENTIRETY BY THE PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND
BY-LAWS WHICH ARE INCLUDED AS EXHIBITS TO THE REGISTRATION STATEMENT OF WHICH
THIS PROSPECTUS IS A PART, AND BY THE PROVISIONS OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE ("DGCL").

COMMON STOCK

The Company is authorized to issue 5,000,000 shares of Common Stock, par
value $0.01 per share, 1,875,000 of which are currently outstanding and held by
Rich City. Holders of the Common Stock are entitled to receive such additional
dividends, if any, as may be declared by and at the discretion of the Board of
Directors from assets legally available for that purpose after payment of
participating dividends required to be paid on outstanding shares of Common
Stock, and are entitled at all meetings of stockholders and upon consent
solicitations to one vote for each share held by them. The shares of Common
Stock are not redeemable and do not have any preemptive or conversion rights.
All of the Common Stock offered hereby will be, when-issued, fully-paid and
non-assessable. In the event of a voluntary or involuntary winding up or
dissolution, liquidation or partial liquidation of the Company, holders of the
Common Stock shall participate, pro rata, in any distribution of the assets of
the Company remaining after payment of liabilities. The Company has not issued
any other capital stock or class of securities.

PREFERRED STOCK

The Company is authorized to issue up to 5,000,000 shares of Preferred
Stock, par value $0.01 per share. The Board of Directors of the Company has the
authority, without further action by the holders of the outstanding Common
Stock, to issue Preferred Stock from time to time in one or more classes or
series, to fix the number of shares constituting any class or series and the
stated value thereof, if different from the par value, and to fix the terms of
any such series or class, including dividend rights, divided rates, conversion
or exchange rights, voting rights and terms of redemption (including sinking
fund provisions), the redemption price and the liquidation preference of such
class or series. The Company presently has no class or series of Preferred Stock
outstanding, and has no present plans to issue any series or class of Preferred
Stock. The designations, rights and preferences of any Preferred Stock which may
be issued would be set forth in a Certificate of Designation which would be
filed with the Secretary of the State of the State of Delaware.

LIMITATION ON LIABILITY OF DIRECTORS

The Company's Certificate of Incorporation provides that a director of the
Company will not be personally liable to the Company or its stockholders for
monetary damages for the breach of his or her fiduciary duty of care as a
director. By its terms and in accordance with the DGCL, however, this provision
does not eliminate or limit the liability of a director of the Company (i) for
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
(relating to unlawful payments of dividends or unlawful stock repurchases or
redemptions) or (iv) for any transaction from which the director derived an
improper personal benefit.

ANTI-TAKEOVER PROVISIONS

The Company is governed by the provisions of DGCL Section 203, an
anti-takeover law enacted in 1988. In general, the law prohibits a public
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed

36
<PAGE>
manner. "Business combination" is defined to include mergers, asset sales and
certain other transactions resulting in a financial benefit to the stockholders.
An "interested stockholder" is defined as a person who, together with affiliates
or associates, owns (or, within the prior three years, did own) 15% or more of a
corporation's voting stock. As a result of the application of Section 203,
potential acquirors of the Company may be discouraged from attempting to effect
an acquisition transaction with the Company, thereby possibly depriving holders
of the Company's securities of certain opportunities to sell or otherwise
dispose of such securities at above-market prices pursuant to such transactions.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Continental Stock
Transfer & Trust Company, New York, New York.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the offering there has not been any public market for the Common
Stock of the Company. Future sales of substantial amounts of Common Stock in the
public market by the Company or certain of its stockholders could adversely
affect the prevailing market prices.

Upon completion of the offering, the Company will have issued and
outstanding 3,125,000 (or 3,312,500 if the Underwriters exercise the
over-allotment option in full) shares of Common Stock. Of these shares, the
1,250,000 (or 1,437,500 if the Underwriters exercise the over-allotment option
in full) shares to be sold in the offering will be freely tradeable without
restrictions or future registration under the Securities Act unless purchased by
"affiliates" of the Company as that term is defined in Rule 144 under the
Securities Act ("Rule 144"). All of the remaining 1,875,000 shares will be
eligible under Rule 144 for resale beginning in March 1998.

The Representative has entered into "lock-up" agreements with all officers,
directors and the existing stockholder of the Company that prohibit such holders
from selling any shares of the Company's Common Stock (other than securities of
the Company registered pursuant to any public offering) until 24 months from the
date of this Prospectus, without the prior consent of the Underwriter. See
"Underwriting."

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned restricted securities
for at least two years (including the holding period of any prior owner except
an affiliate of the Company) is entitled to sell in "broker's transactions" or
to "market makers," within any three-month period, a number of shares that does
not exceed the greater of (i) one percent of the completion of the offering) or
(ii) generally, the average weekly trading volume in the Common Stock during the
four calendar weeks preceding the required filing of a Form 144 with respect to
such sale. Sales under Rule 144 are subject to the availability of current
public information about the Company. Under Rule 144(k), a person who is not
deemed to have been an affiliate of the Company at any time during the 90 days
preceding a sale, and who has beneficially owned the shares proposed to be sold
for at least three years, is entitled to sell such shares without having to
comply with the manner of sale, public information, volume limitation or notice
provisions of Rule 144.

37
<PAGE>
UNDERWRITING

The Underwriters named below (the "Underwriters"), for whom Gilford
Securities Incorporated is acting as Representative, have severally agreed,
subject to the terms and conditions contained in the Underwriting Agreement (the
"Underwriting Agreement") to purchase from the Company, and the Company has
agreed to sell to the Underwriters on a firm commitment basis, the shares of
Common Stock set forth opposite their names:

<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
- --------------------------------------------------------------------------- -----------------
<S> <C>
Gilford Securities Incorporated............................................

-----------------
-----------------
Total.................................................................. 1,250,000
</TABLE>

The Underwriters are committed to purchase all shares of Common Stock
offered hereby if any of such shares are purchased. The Underwriting Agreement
provides that the obligation of the several Underwriters are subject to
conditions precedent specified therein.

The Company has been advised by the Representative that it initially
proposes to offer the Common Stock to the public at the public offering price
set forth on the cover page of this Prospectus and may allow to certain dealers
who are members of the National Association of Securities Dealers, Inc. ("NASD")
concessions not in excess of $ per share of Common Stock, of which
amount a sum not in excess of $ per share of Common Stock may in turn be
reallowed by such dealers to other dealers. After the commencement of the
offering, the public offering price, concessions and reallowances may be
changed. The Representative has informed the Company that it does not expect
sales to discretionary accounts by the Underwriters to exceed five percent of
the securities offered by the Company hereby.

The Company has granted to the Underwriters an option, exercisable within 45
days of the date of this Prospectus, to purchase from the Company at the
offering price, less underwriting discounts and the non-accountable expense
allowance, all or part of an additional 187,500 shares of Common Stock on the
same terms and conditions of the offering for the sole purpose of covering
over-allotments, if any.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act. The Company has
agreed to pay to the Representative a non-accountable expense allowance equal to
three percent of the gross proceeds derived from the sale of the shares of
Common Stock underwritten, $50,000 of which has been paid to date.

The officers and directors of the Company and the holders of all of the
shares of Common Stock have agreed (i) not to, directly or indirectly, issue,
offer to sell, sell, grant an option for the sale of, transfer, pledge, assign,
hypothecate, or otherwise encumber or dispose of any securities issued by the
Company, including shares of Common Stock or securities convertible into or
exchangeable or exercisable for or evidencing any right to purchase or subscribe
for any shares of Common Stock for a period of twenty-four months from the
effective date of the Registration Statement (the "Lock-Up Period"), without the
prior written consent of the Representative and (ii) that, for 24 months
following the effective date of the

38
<PAGE>
Registration Statement, any sales of the Company's securities shall be made
through the Representative in accordance with its customary brokerage practices
either on a principal or agency basis. An appropriate legend shall be marked on
the face of certificates representing all such securities.

In connection with this offering, the Company has agreed to issue and sell
to the Representative and/ or its designees, at the closing of the proposed
underwriting, for nominal consideration, five year Representative's Warrants
(the "Representative's Warrants") to purchase 125,000 shares of Common Stock.
The Representative's Warrants are exercisable at a price of $ [140% of
the initial public offering price per share of Common Stock] per share of Common
Stock at any time during a period of four years commencing one year from the
date of this Prospectus and are restricted from sale, transfer, assignment or
hypothecation for a period of twelve months from the date hereof, except to
officers of the Representative. The Representative's Warrants contain
anti-dilution provisions providing for adjustment of the number of shares of
Common Stock and exercise price under certain circumstances. The
Representative's Warrants grant to the holders thereof and to the holders of the
underlying securities certain rights of registration of the securities
underlying the Representative's Warrants.

The Company has also agreed to retain the Representative as the Company's
financial consultant for a period of 24 months from the date of this Prospectus
and to pay the Representative $1,000 per month in connection therewith, the
total amount of which ($24,000) is due upon consummation of the offering.

The Company has agreed that for five years from the effective date of the
Registration Statement, the Representative may designate one person for election
to the Company's Board of Directors (the "Designation Right"). In the event that
the Representative elects not to exercise its Designation Right, then it may
designate one person to attend all meetings of the Company's Board of Directors
for a period of five years. The Company has agreed to reimburse the
Representative's designee for all out-of-pocket expenses incurred in connection
with the designee's attendance at meetings of the Board of Directors.

Prior to this offering, there has been no public market for the Common
Stock. Accordingly, the initial public offering price of the Common Stock was
determined by negotiation between the Company and the Representative. Among the
factors considered in determining such prices and terms, in addition to the
prevailing market conditions, included the history of and the prospects for the
industry in which the Company competes, an assessment of the Company's
management, the prospects of the Company, its capital structure and such other
factors that were deemed relevant. The offering price does not necessarily bear
any relationship to the assets, results of operations or net worth of the
Company.

The foregoing is a summary of the principal terms of the agreements
described above and does not purport to be complete. Reference is made to a copy
of each such agreement which are filed as exhibits to the Registration
Statement. See "Additional Information."

LEGAL MATTERS

The validity of the Common Stock offered hereby and certain other legal
matters will be passed upon for the Company by Bondy & Schloss LLP, New York,
New York. Certain legal matters as to Hong Kong law will be passed upon by
Messrs. Erving Brettell, Solicitors, Hong Kong. Orrick, Herrington & Sutcliffe
LLP, New York, New York, has acted as counsel for the Underwriters in connection
with the offering.

EXPERTS

The Company's financial statements as of March 31, 1996 included in this
Prospectus have been audited by Deloitte Touche Tohmatsu, Hong Kong, independent
auditors, as stated in their report appearing herein and are so included herein
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.

39
<PAGE>
ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act, with respect to the shares being offered
in this offering. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain items of which are omitted in
accordance with the rules and regulations of the Commission. The omitted
information may be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices located at
Seven World Trade Center, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661. Such material can also be obtained at
the Commission's Web site at http://www.sec.gov. Copies of such material can be
obtained from the public reference section of the Commission at prescribed
rates. Statements contained in this Prospectus as to the contents of any
contract or other document field as an exhibit to the Registration Statement are
not necessarily complete and in each instance reference is made to the copy of
the document filed as an exhibit to the Registration Statement, each statement
made in this Prospectus relating to such documents being qualified in all
respect by such reference. For further information with respect to the Company
and the securities being offered hereby, reference is hereby made to such
Registration Statement, including the exhibits thereto and the financial
statements, notes, and schedules filed as a part thereof.

40
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
RICH CITY INTERNATIONAL PACKAGING LIMITED--NORTH AMERICAN DISTRIBUTION BUSINESS
Report of Independent Auditors............................................................................. F-2
Balance sheets as of March 31, 1995 and 1996............................................................... F-3
Statements of income for each of the three years in the period ended March 31, 1996........................ F-4
Statements of division equity for each of the three years in the period ended March 31, 1996............... F-5
Statements of cash flows for each of the three years in the period ended March 31, 1996.................... F-6
Notes to financial statements.............................................................................. F-7

LEADING EDGE PACKAGING, INC.
(Successor to Rich City International Packaging Limited's North American distribution business)
Report of Independent Auditors............................................................................. F-14
Balance sheet as of March 31, 1996......................................................................... F-15
Notes to balance sheet..................................................................................... F-16

UNAUDITED INTERIM FINANCIAL INFORMATION FOR RICH CITY INTERNATIONAL PACKAGING LIMITED--NORTH AMERICAN
DISTRIBUTION BUSINESS AND LEADING EDGE PACKAGING, INC.
Introduction to unaudited interim financial information.................................................... F-18
Audited balance sheet at March 31, 1996 and unaudited interim balance sheet at September 30, 1996.......... F-19
Unaudited interim statements of income for the six months ended September 30, 1995 and 1996................ F-20
Unaudited interim statements of division / shareholder's equity for the six months ended September 30,
1996..................................................................................................... F-21
Unaudited interim statements of cash flows for the six months ended September 30, 1995 and 1996............ F-22
Notes to unaudited interim financial information........................................................... F-23

UNAUDITED PRO FORMA STATEMENTS OF INCOME FOR RICH CITY INTERNATIONAL PACKAGING LIMITED--NORTH AMERICAN
DISTRIBUTION BUSINESS AND LEADING EDGE PACKAGING, INC.
Introduction to unaudited pro forma statements of income................................................... F-26
Unaudited pro forma statements of income for the six months ended September 30, 1995, the year ended March
31, 1996 and the six months ended September 30, 1996..................................................... F-27
Notes to unaudited pro forma statements of income.......................................................... F-28
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors

Leading Edge Packaging, Inc.

(Successor to Rich City International Packaging Limited's

North American distribution business)

We have audited the accompanying balance sheets of Rich City International
Packaging Limited ("Rich City")'s North American distribution business ("N.A.
Distribution Business") as of March 31, 1995 and 1996, and the related
statements of income, division equity and cash flows for each of the three years
in the period ended March 31, 1996. These financial statements are the
responsibility of Rich City's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

The accompanying financial statements have been prepared from the separate
records maintained by the N.A. Distribution Business and may not necessarily be
indicative of the condition that would have existed or the results of operations
if the N.A. Distribution Business had been operated as an unaffiliated company.
Portions of certain income and expenses represent allocations made from head
office items applicable to Rich City as a whole.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the N.A. Distribution Business as of March
31, 1995 and 1996, and the results of its operations and its cash flows for each
of the three years in the period ended March 31, 1996 in conformity with
accounting principles generally accepted in the United States of America.

DELOITTE TOUCHE TOHMATSU

Hong Kong

April 30, 1996, except for Notes 1 and 12,

as to which the date is September 23, 1996

F-2
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

BALANCE SHEETS

<TABLE>
<CAPTION>
AS OF MARCH 31,
--------------------------
<S> <C> <C>
1995 1996
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents........................................................... $ 290,130 $ 35,002
Accounts receivable, net of allowance for doubtful accounts--1995, $5,020; 1996,
$5,944............................................................................ 162,322 192,199
Bills receivable (Note 3)........................................................... 354,748 169,516
Advances to head office (Note 4).................................................... -- 1,151,836
Prepaid expenses and other current assets........................................... 16,723 54,832
------------ ------------
Total current assets.............................................................. 823,923 1,603,385
Property, plant and equipment, net of accumulated depreciation--1995, $25,650; 1996,
$56,978 (Note 5).................................................................... 220,222 193,295
------------ ------------
Total assets...................................................................... $ 1,044,145 $ 1,796,680
------------ ------------
------------ ------------

LIABILITIES AND DIVISION EQUITY
Current liabilities:
Accounts payable to a related party (Note 8a)....................................... $ 601,127 $ 1,655,308
Advances from Head Office (Note 4).................................................. 362,384 --
Accrued liabilities................................................................. 80,634 141,372
------------ ------------
Total current liabilities......................................................... 1,044,145 1,796,680
Commitments and contingencies (Note 7)
Division equity....................................................................... -- --
------------ ------------
Total liabilities and division equity............................................. $ 1,044,145 $ 1,796,680
------------ ------------
------------ ------------
</TABLE>

See accompanying notes to financial statements.

F-3
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------
<S> <C> <C> <C>
1994 1995 1996
------------- ------------ -------------
Net sales............................................................ $ 13,725,079 $ 6,310,879 $ 10,987,470
Cost of sales from a related party (Note 8a)......................... 9,429,109 4,021,908 6,635,318
------------- ------------ -------------
Gross profit......................................................... 4,295,970 2,288,971 4,352,152
------------- ------------ -------------
Selling expenses..................................................... 441,450 263,778 451,327
General and administrative expenses.................................. 781,893 543,644 653,283
------------- ------------ -------------
Selling, general and administrative expenses......................... 1,223,343 807,422 1,104,610
------------- ------------ -------------
Operating income..................................................... 3,072,627 1,481,549 3,247,542
Interest expense..................................................... (51,190) (65,057) (53,961)
Other income......................................................... 30,372 56,416 7,014
------------- ------------ -------------
Income before income taxes........................................... 3,051,809 1,472,908 3,200,595
Income taxes (Note 6)................................................ 33,043 -- --
------------- ------------ -------------
Net income........................................................... $ 3,018,766 $ 1,472,908 $ 3,200,595
------------- ------------ -------------
------------- ------------ -------------
</TABLE>

See accompanying notes to financial statements.

F-4
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

STATEMENTS OF DIVISION EQUITY

<TABLE>
<CAPTION>
DIVISION
EQUITY
--------------
<S> <C>
Balance as of April 1, 1993....................................................................... $ 1,221,802
Net income........................................................................................ 3,018,766
Distribution to Head Office (Note 1d)............................................................. (4,230,769)
--------------
Balance as of March 31, 1994...................................................................... 9,799
Net income........................................................................................ 1,472,908
Distribution to head office (Note 1d)............................................................. (1,482,707)
--------------
Balance as of March 31, 1995...................................................................... --
Net income........................................................................................ 3,200,595
Distribution to head office (Note 1d)............................................................. (3,200,595)
--------------
Balance as of March 31, 1996...................................................................... $ --
--------------
--------------
</TABLE>

See accompanying notes to financial statements.

F-5
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

-- NORTH AMERICAN DISTRIBUTION BUSINESS

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------
<S> <C> <C> <C>
1994 1995 1996
------------ ------------ ------------
Cash flows from operating activities:
Net income............................................................ $ 3,018,766 $ 1,472,908 $ 3,200,595
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation........................................................ 16,669 26,690 31,328
Loss on sale of property, plant and equipment....................... -- 16,937 --
Changes in operating assets and liabilities:
Accounts receivable............................................... (1,194,275) 3,450,600 (29,877)
Bills receivable.................................................. -- (354,748) 185,232
Prepaid expenses and other current assets......................... (12,511) 30,068 (38,109)
Accounts payable to a related party............................... 144,930 (768,623) 1,054,181
Accrued liabilities............................................... 30,885 4,193 60,738
Income taxes payable.............................................. 33,043 (33,043) --
------------ ------------ ------------
Net cash provided by operating activities............................... 2,037,507 3,844,982 4,464,088
------------ ------------ ------------
Cash flows from investing activities:
Purchase of property, plant and equipment............................. (104,691) (228,240) (4,401)
Proceeds from sale of property, plant and equipment................... -- 90,831 --
------------ ------------ ------------
Net cash used in investing activities................................... (104,691) (137,409) (4,401)
------------ ------------ ------------
Cash flows from financing activities:
Distribution to Head Office........................................... (4,230,769) (1,482,707) (3,200,595)
Net advances from Head Office......................................... 3,066,232 -- --
Net repayments to Head Office......................................... -- (2,707,824) (1,514,220)
------------ ------------ ------------
Net cash used in financing activities................................... (1,164,537) (4,190,531) (4,714,815)
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents.................... 768,279 (482,958) (255,128)
Cash and cash equivalents at beginning of year.......................... 4,809 773,088 290,130
------------ ------------ ------------
Cash and cash equivalents at end of year................................ $ 773,088 $ 290,130 $ 35,002
------------ ------------ ------------
------------ ------------ ------------
Supplemental disclosures of cash flow information:
Interest paid......................................................... $ 51,190 $ 65,057 $ 53,961
Income taxes paid..................................................... -- 33,043 --
</TABLE>

See accompanying notes to financial statements.

F-6
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

Rich City International Packaging Limited ("Rich City" or "Head Office") is
a wholly owned subsidiary of Chung Hwa Development Holdings Limited ("Chung
Hwa"), a Hong Kong listed company. Rich City is engaged in the sale and
distribution, design and warehousing of packaging products. Effective April 1,
1996, Rich City assigned all its North American sales and the exclusive rights
to carry on the North American distribution business of Rich City ("N.A.
Distribution Business") to Leading Edge Packaging, Inc. ("Leading Edge"), see
Note 12--Subsequent Events. Leading Edge was incorporated in Delaware on
December 15, 1995, and is a wholly owned subsidiary of Rich City.

During the three years ended March 31, 1996, it has been the policy of the
N.A. Distribution Business to transfer its cash earned to Rich City to finance
the operations and working capital requirements of the manufacturing and other
activities of Chung Hwa and its subsidiaries ("Chung Hwa Group").

The N.A. Distribution Business, which operates in a single industry segment,
is engaged in the sale and distribution of packaging products in North America.

The financial statements of the N.A. Distribution Business for each of the
three years in the period ended March 31, 1996, have been prepared on the
"Carved Out Basis" as if the N.A. Distribution Business had been in existence
and operating independently prior to the Assignment and Distribution agreement
referred to in Note 12 to the financial statements between Rich City and Leading
Edge, which became effective on April 1, 1996. The financial statements have
been prepared in accordance with generally accepted accounting principles in the
United States of America ("U.S. GAAP"), which do not differ significantly from
those used in the statutory accounts of Rich City.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

The Carved Out Basis is as follows:

(a) Assets:

Property, plant and equipment, accounts receivable, bills receivable,
prepaid expenses and other current assets specifically relating to the N.A.
Distribution Business have been identified and presented in the financial
statements.

Cash and cash equivalents presented in the financial statements
represent the balance of the cash not transferred to Rich City's account.

The N.A. Distribution Business did not maintain any inventory during the
three years ended March 31, 1996 as purchases were made against specific
customer orders and title passed to customers at the same time as the N.A.
Distribution Business acquired the product.

(b) Current liabilities:

Accounts payable to a related party represents the trade payable to
Breakspear Limited, a fellow subsidiary of Rich City and its sole supplier.
Breakspear Limited is part of the Chung Hwa Group. The trade payable balance
at each year end date represents outstanding invoices for the 60 days prior

F-7
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (CONTINUED)
to each year end in accordance with Rich City's payment term to Breakspear
Limited (as defined herein) of net 60 days.

Accrued liabilities specifically relating to the N.A. Distribution
Business have been identified and presented in the financial statements.

Sales and cost of sales for the N.A. Distribution Business have been
identified and presented in the financial statements. The financial effect
of the Assignment and Distribution agreement referred to in Note 12 has not
been included in the carved out results.

Selling, general and administrative, interest and taxation expenses
relating to the N.A. Distribution Business are accounted for either on an
actual basis or estimated with reference to the circumstances of the
business based on methods that management of Rich City believes to be
reasonable. Common expenses which amounted to $268,755, $148,282 and
$172,751 in the years ended March 31, 1994, 1995 and 1996, respectively,
were allocated with reference to the ratio of transactions made or the floor
area used as appropriate.

(d) Distribution to head office

Distributions made to Rich City for the years ended March 31, 1994, 1995
and 1996 were $4,230,769, $1,482,707 and $3,200,595, respectively, and
resulted in the distribution of the entire equity balance each year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS--Cash and cash equivalents include cash on hand,
demand deposits, interest bearing savings accounts, and time certificates of
deposit with an original maturity of three months or less.

FACTORED RECEIVABLES--Transfers of receivables with recourse are recognized
as sales when the future economic benefits embodied in the receivable are
surrendered because the N.A. Distribution Business' future obligation under the
recourse provisions can be reasonably estimated and there are no repurchase
terms except under the recourse provisions.

The difference between the receivable transferred and the cash received is
recognized as a loss in the period it occurs.

PROPERTY, PLANT AND EQUIPMENT--Property, plant and equipment is stated at
cost. Depreciation is provided to write off the cost of property, plant and
equipment over their estimated useful lives using the straight line method, at
the following rates per annum:

<TABLE>
<S> <C>
Furniture, fixtures and equipment............ 10-20%
Leasehold improvements....................... 10% or over the terms of the respective
leases whichever is shorter
</TABLE>

INVENTORIES--Inventories held for resale, are stated at the lower of cost,
determined by the first-in, first-out method, or market. Cost represents
supplier cost for delivery at the designated location.

F-8
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NET SALES--Net sales represent the invoiced value of products sold less
discounts and returns. The N.A. Distribution Business recognises sales when
products are shipped to customers or when title passes, if later.

FOREIGN CURRENCY TRANSLATION--The functional currency of the N.A.
Distribution Business is Hong Kong dollar. Transactions and assets and
liabilities denominated in Hong Kong dollars have been translated to the U.S.
dollar at HK$7.80 to $1.00, which approximates the market rate at all periods
presented.

All transactions in currencies other than the functional currency during the
periods are translated at the exchange rates prevailing on the transaction
dates. Related accounts payable or receivable existing at the balance sheet date
denominated in currencies other than the functional currencies are translated at
period end rates. Gains and losses, which are immaterial for all periods
presented, resulting from the translation of foreign currency transactions and
balances are included in the income statements.

EMPLOYEE BENEFITS--Contributions payable to the N.A. Distribution Business'
defined contribution retirement benefit scheme are expensed as incurred. The
N.A. Distribution Business does not provide any post retirement benefits and
post employment benefits, if any, are not material.

3. BILLS RECEIVABLE

Bills receivable represent accounts receivable in the form of bills of
exchange, whose acceptances and settlements are handled by banks.

During each of the years ended March 31, 1994, 1995 and 1996, the N.A.
Distribution Business had factored gross bills receivable of $1,109,358,
$3,811,936 and $3,250,463, respectively, with financial institutions with
recourse to the N.A. Distribution Business. The net proceeds after discounts
during each of these years amounted to $1,076,138, $3,748,403 and $3,197,771,
respectively. There were no repurchase terms except for the recourse under the
terms of the factoring agreement in the event of customer default.

The amounts of the factored bills receivable which remained outstanding at
March 31, 1994, 1995, and 1996 were $1,012,418, $683,497 and $1,074,008,
respectively. These receivables were all collected by the financial institutions
in the following year.

F-9
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

4. ADVANCES (FROM) TO HEAD OFFICE

<TABLE>
<CAPTION>
MONTHLY
AVERAGE
BALANCE
DURING THE
AMOUNT YEAR
------------- --------------
<S> <C> <C>
Advances (from) to Rich City:
Balance as of April 1, 1993................................... $ (3,976)
Advances from Head Office..................................... (4,549,907)
Repayments to Head Office..................................... 1,752,430
Common expense allocations.................................... (268,755)
Balance as of March 31, 1994.................................. (3,070,208) $ (471,002)
--------------
--------------
Advances from Head Office..................................... (1,067,921)
Repayments to Head Office..................................... 3,924,027
Common expense allocations.................................... (148,282)
-------------
Balance as of March 31, 1995.................................. (362,384) $ (430,412)
--------------
--------------
Advances from Head Office..................................... (1,735,761)
Repayments to Head Office..................................... 3,422,732
Common expense allocations.................................... (172,751)
-------------
Balance as of March 31, 1996.................................. $ 1,151,836 $ 1,542,610
------------- --------------
------------- --------------
</TABLE>

Advances from and to Rich City were made on an interest free basis.

5. PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
AS OF MARCH 31,
----------------------
<S> <C> <C>
1995 1996
---------- ----------
Property, plant and equipment consists of the following:
Furniture, fixtures and equipment..................................... $ 145,359 $ 147,988
Leasehold improvements................................................ 100,513 102,285
---------- ----------
Total................................................................. 245,872 250,273
Less: Accumulated depreciation........................................ (25,650) (56,978)
---------- ----------
Net book value........................................................ $ 220,222 $ 193,295
---------- ----------
---------- ----------
</TABLE>

6. INCOME TAXES

Rich City is subject to Hong Kong taxation on its activities conducted in
Hong Kong. During the three years ended March 31, 1996, Chung Hwa and Rich
City's manufacturing operations were outside Hong Kong and the majority of
income was not subject to tax in Hong Kong or in other jurisdictions.

F-10
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. INCOME TAXES (CONTINUED)
The provision for income taxes attributable to the N.A. Distribution
Business consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-------------------------------
<S> <C> <C> <C>
1994 1995 1996
--------- --------- ---------
Hong Kong
Current.................................................... $ 33,043 $ -- $ --
--------- --------- ---------
--------- --------- ---------
</TABLE>

A reconciliation between the provision for income taxes computed by applying
the Hong Kong statutory tax rate to income before taxes and the actual provision
for income taxes is as follows:

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-------------------------------
<S> <C> <C> <C>
1994 1995 1996
--------- --------- ---------
Statutory tax rate in Hong Kong................................. 17.5% 16.5% 16.5%
Income not subject to taxation.................................. (16.5) (16.5) (16.5)
--------- --------- ---------
Effective rate.................................................. 1.0% --% --%
--------- --------- ---------
--------- --------- ---------
</TABLE>

There were no significant temporary differences during the years ended March
31, 1994, 1995 or 1996 and at these dates.

The future operations of the N.A. Distribution Business will be subject to
income tax in the United States of America. United States Federal and State
income taxes payable, calculated at a rate of 38%, on the income for the years
ended March 31, 1994, 1995 and 1996, would have been $1,159,687, $559,705 and
$1,216,226, respectively. In computing the income tax liabilities, the asset and
liability method would have been used in providing for income taxes on all
transactions that have been recognised in the financial statements, which are in
accordance with Statement of Financial Accounting Standards No.109, "Accounting
for Income Taxes" ("SFAS 109"). SFAS 109 requires deferred taxes be adjusted to
reflect the tax rates at which future taxable amounts will be settled or
recognised. The effects of tax rate changes on future deferred tax liabilities
and deferred tax benefits, as well as other changes in income tax laws, are
recognised in net earnings in the period such changes are enacted.

7. COMMITMENTS AND CONTINGENCIES

At March 31, 1996, the N.A. Distribution Business had factored with
financial institutions gross bills receivable of $1,074,008 at a discount of
$14,477 with recourse to the N.A. Distribution Business. The N.A. Distribution
Business had no other capital commitments.

The N.A. Distribution Business leases premises under various operating
leases which do not contain any renewal and escalation clauses. Rental expense
under operating leases was $97,957 in 1994, $52,688 in 1995 and $57,876 in 1996.

Minimum rental commitments at March 31, 1996 under operating leases include
$13,994 due in 1997.

F-11
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

8. RELATED PARTY TRANSACTIONS

(a) Breakspear Limited is a fellow subsidiary and the sole supplier of
packaging products for Rich City. The N.A. Distribution Business had
purchases of $9,429,109, $4,021,908 and $6,635,318 from Breakspear Limited
for the years ended March 31, 1994, 1995 and 1996, respectively.

Accounts payable to Breakspear Limited at March 31, 1995 and 1996 were
$601,127 and $1,655,308, respectively. The accounts payable are unsecured,
non-interest bearing and repayable on demand.

(b) During the year ended March 31, 1994, the N.A. Distribution Business
paid rental expense of $59,057 to Everwell Investment Limited for the lease
of office space. Mr. Chong Kim Fu and Ms. Ong Ai Gin, directors of Rich City
at that time, have beneficial interests in Everwell Investment Limited.

During the years ended March 31, 1995 and 1996, the N.A.
Distribution Business paid rental expense of $29,800 and $36,377 to Circle
Round Limited, a fellow subsidiary of Rich City.

(c) During the years ended March 31, 1994, 1995 and 1996, in situations
where quality claims arose from customers, Breakspear Limited was required
to take up and process these claims at no cost to the N.A. Distribution
Business. During the year ended March 31, 1994, Mr. Chong Kim Fu, being the
major shareholder of Chung Hwa at that time, made a payment to a customer in
the United States of $270,000 in respect of quality claims to the Chung Hwa
Group. He has also given an indemnity to the Chung Hwa Group in respect of
another claim made by the same customer for defective products, pursuant to
which he subsequently paid $4,331,072 in November 1994 to the Chung Hwa
Group in respect of the amount of the claim and professional costs
associated with these claims. The Chung Hwa Group made a counterclaim
against these claims for which Mr. Chong Kim Fu subsequently received
substantial repayment of the above mentioned amount from the customer.

9. CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

Customers accounting for 10% or more of total net sales for each of the
three years ended March 31, 1994, 1995 and 1996 are detailed as follows:

<TABLE>
<CAPTION>
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
Customer A................................................... 63.7% 19.2% --
Customer B................................................... 12.1% -- --
Customer C................................................... 5.4% 38.8% 26.6%
Customer D................................................... -- 4.4% 13.9%
Customer E................................................... -- 3.9% 12.1%
</TABLE>

Details of the accounts receivable from the five customers with the largest
receivable balances at March 31, 1994, 1995 and 1996 are as follows:

<TABLE>
<CAPTION>
PERCENTAGE OF ACCOUNTS
RECEIVABLE AS AT MARCH 31,
-------------------------------
<S> <C> <C> <C>
Five largest receivable balances............................. 95.5% 88.8% 93.8%
</TABLE>

Bad debt expense was $3,613, $1,407 and $924 for the years ended March 31,
1994, 1995 and 1996, respectively.

F-12
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of Statement of
Financial Accounting Standards No.107, "Disclosures about Fair Value of
Financial Instruments". The estimated fair value amounts have been determined by
Rich City, using available market information and appropriate valuation
methodologies. The estimates presented herein are not necessarily indicative of
amounts that Rich City could realize in a current market exchange. The carrying
amounts of cash, accounts receivable, bills receivable, advances to head office
and current liabilities are short term in nature and therefore reflect their
fair value. All the financial instruments are for trade purposes.

11. RETIREMENT PLAN

On April 1, 1993, Rich City established a defined contribution retirement
plan covering substantially all employees in Hong Kong. Under this plan,
eligible employees may contribute amounts through payroll deductions which are
equal to 5% of individual salary, supplemented by employer contributions at 5%
of individual salary, for investment in various funds established by the plan.
The expense, net of forfeited contributions, related to this plan applicable to
the carved out business was $10,708, $3,653 and $3,178 for the years ended March
31, 1994, 1995 and 1996, respectively.

12. SUBSEQUENT EVENT

On September 23, 1996, an Assignment and Distribution agreement
("Agreement") was signed between Rich City and Leading Edge. Under the
Agreement, Leading Edge is designated as an exclusive distributor for Rich City
to market, distribute, sell, warehouse and subassemble, where necessary, Rich
City's packaging products in North America. The term of the agreement is for 10
years from the date of agreement and is automatically renewed for successive
additional one year periods except upon early termination by both parties.
Leading Edge will purchase packaging products from Rich City at a 6% to 8% mark
up over the manufacturing costs, which comprise material costs, labor cost and
overheads.

Under the terms of the Agreement, for the year ending December 31, 1998, and
for such subsequent years thereafter the exclusive distribution basis will be
converted to a non-exclusive basis if Leading Edge's annual gross sales rate of
increase is less than the cost of living increase when compared to the Consumer
Price Index. In addition, Leading Edge is also obligated to pay to Rich City a
royalty of $2,000,000 in one or more installments. The amount of each
installment is calculated using a formula which relates to Leading Edge's net
sales and earnings before taxes, commencing the year ending March 31, 1999. No
installment will need to be paid if both Leading Edge's earnings before taxes is
lower than $3,000,000 and net sales for the fiscal year are less than
$25,000,000. In the event that Leading Edge fails to make the installment
payments in accordance with terms under the Agreement, the exclusive
distribution basis will also be converted to a non-exclusive basis. Effective
from April 1, 1996, Rich City has assigned all its North America sales to
Leading Edge.

F-13
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors

Leading Edge Packaging, Inc.

(Successor to Rich City International Packaging Limited's

North American distribution business)

We have audited the accompanying balance sheet of Leading Edge Packaging,
Inc. (the "Company", successor to Rich City International Packaging Limited's
North American distribution business) as of March 31, 1996. This financial
statement is the responsibility of the Company's management. Our responsibility
is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the balance
sheet is free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the balance sheet. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall balance sheet
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, such balance sheet presents fairly, in all material
respects, the financial position of the Company as of March 31, 1996 in
conformity with accounting principles generally accepted in the United States of
America.

DELOITTE TOUCHE TOHMATSU

Hong Kong

April 30, 1996, except for Notes 1 and 3,

as to which the date is September 23, 1996

F-14
<PAGE>
LEADING EDGE PACKAGING, INC.

(SUCCESSOR TO RICH CITY INTERNATIONAL PACKAGING LIMITED'S

NORTH AMERICAN DISTRIBUTION BUSINESS)

BALANCE SHEET AS OF MARCH 31, 1996

<TABLE>
<S> <C>
ASSET

Current and total asset:
Cash and cash equivalents......................................................... $ 1,500
---------
---------
SHAREHOLDER'S EQUITY

Commitments and contingencies (Note 2)
Shareholder's equity (Note 3):
Common stock no par value--1,500 shares authorized, issued and outstanding........ $ 1,500
---------
---------
</TABLE>

See accompanying notes to balance sheet

F-15
<PAGE>
LEADING EDGE PACKAGING, INC.

(Successor to Rich City International Packaging Limited's

North American distribution business)

NOTES TO BALANCE SHEET

1. ORGANIZATION

Leading Edge Packaging, Inc. (the "Company") was incorporated in Delaware on
December 15, 1995, and remained inactive during the period to March 31, 1996.
The Company is a wholly owned subsidiary of Rich City International Packaging
Limited ("Rich City") and became the successor to Rich City's North American
distribution business effective from April 1, 1996, under an Assignment and
Distribution agreement signed on September 23, 1996.

2. COMMITMENTS AND CONTINGENCIES

At March 31, 1996, the Company had no operating lease commitments, capital
commitments or contingent liabilities.

3. SUBSEQUENT EVENTS

The following transactions took place subsequent to March 31, 1996:

(a) On September 23, 1996, an Assignment and Distribution agreement
("Agreement") was signed between Rich City and the Company. Under the
Agreement, the Company is designated as an exclusive distributor for Rich
City to market, distribute, sell, warehouse and subassemble, where
necessary, Rich City's packaging products in North America. The term of the
agreement is for 10 years from the date of agreement and is automatically
renewed for successive additional one year periods except upon early
termination by both parties. The Company will purchase packaging products
from Rich City at a 6% to 8% mark up over the manufacturing costs, which
comprise material costs, labor cost and overheads.

Under the term of the Agreement, for the year ending December 31, 1998,
and for each subsequent year thereafter the exclusive distribution basis
will be converted to a non-exclusive basis if the Company's annual gross
sales rate of increase is less than the cost of living increase when
compared to the Consumer Price Index. In addition, the Company is also
obligated to pay to Rich City a royalty of $2,000,000 in one or more
installments. The amount of each installment is calculated using a formula
which relates to the Company's net sales and earnings before taxes,
commencing the year ending March 31, 1999. No installment will need to be
paid if both the Company's earnings before taxes is lower than $3,000,000
and net sales for the fiscal year are less than $25,000,000. In the event
that the Company fails to make the installment payments in accordance with
terms under the Agreement, the exclusive distribution basis will also be
converted to a non-exclusive basis. Effective from April 1, 1996, Rich City
has assigned all its North America sales to the Company.

(b) In the contemplated public offering of Common Stock by the Company,
on September 13, 1996, it was resolved by unanimous written consent that the
Company increase its authorized share capital from 1,500 common shares with
no par value to 5,000,000 common shares of $0.01 par value per share and
5,000,000 preferred shares of $0.01 par value per share. In addition, it was
also resolved that a stock split of each issued ordinary share of Common
Stock of no par value into 1,250 ordinary shares of Common Stock of $0.01
par value per share.

(c) The Company has leased an office commencing July, 1996 for a period
of 5 years, an apartment commencing September, 1996 for a period of 1 year
and a warehouse commencing

F-16
<PAGE>
LEADING EDGE PACKAGING, INC.

(SUCCESSOR TO RICH CITY INTERNATIONAL PACKAGING LIMITED'S

NORTH AMERICAN DISTRIBUTION BUSINESS)

NOTES TO BALANCE SHEET (CONTINUED)

3. SUBSEQUENT EVENTS (CONTINUED)
November, 1996 for a period of 5 years. The aggregate annual rental of these
properties amounts to approximately $208,032.

(d) The Company entered into employment agreements with its executive
officers and directors with an aggregate annual compensation for the first
year of approximately $372,000. The first year compensation will be used as
base compensation for the second and third years which may be determined by
the board of directors of the Company at their sole discretion. The
agreements also provide for bonuses which may be determined by the board of
directors of the Company at their sole discretion. The agreements may be
terminated by either the Company or the employees on six months' prior
notice.

(e) The Company has adopted an Incentive Stock Option Plan (the "Plan")
under which stock options may be granted to such officers, directors and/or,
employees of the Company as the Plan's administration committee selects.
312,500 shares of Common Stock are reserved for that purpose. Such stock
options entitle the holder to acquire shares of Common Stock during a fixed
period at an exercise price equal to the greater of (i) 110% of the fair
market value of the Common Stock at the time of grant, and (ii) the initial
public offering price per share. Payment by option holders upon exercise of
an option may be made only in cash.

F-17
<PAGE>
INTRODUCTION TO UNAUDITED INTERIM FINANCIAL INFORMATION

The unaudited financial information of Leading Edge Packaging, Inc.
("Leading Edge") for the six months ended September 30, 1996, was prepared on an
actual basis as Leading Edge was operating under the terms of the Assignment and
Distribution agreement (the "Agreement") between Rich City International
Packaging Limited ("Rich City") and Leading Edge. The Agreement was effective on
April 1, 1996, when all Rich City's North American sales were assigned to
Leading Edge. Under this agreement, Leading Edge purchases packaging products
from Rich City at the cost of production by Breakspear Limited, a fellow
subsidiary of Rich City, plus a mark up, which was charged at 6.5% during the
six months ended September 30, 1996, on the cost of production. The financial
statements of Leading Edge for the six months ended September 30, 1996 include
all costs incurred by Rich City for manufacturing and distribution.

The unaudited financial information of Rich City's North American
distribution business (the "N.A. Distribution Business") for the six months
ended September 30, 1995 (the "1995 Period"), was prepared on a "Carved Out
Basis", details of which are provided in Note 1 to the audited financial
statements of the N.A. Distribution Business on pages F-7 and F-8.

The unaudited financial information for the 1995 Period does not purport to
represent what the results of operations or the financial position of the N.A.
Distribution Business would actually have been had the events described above in
fact occurred on such date or at the beginning of the Period, or to project the
results of the operations of the N.A. Distribution Business for any future date
or period.

The unaudited financial information should be read in conjunction with the
audited financial statements of the N.A. Distribution Business and Leading Edge,
including the notes thereto, and other financial information included elsewhere
in this Prospectus.

Rich City and Leading Edge maintain their books and records in Hong Kong
dollars. The exchange rate has been fixed to the U.S. dollars at approximately
HK$ 7.80 to $1.00 since 1983. On a forward going basis, following the completion
of the public offering, the books and records of Leading Edge will be maintained
in U.S. dollars.

F-18
<PAGE>
UNAUDITED INTERIM BALANCE SHEETS

<TABLE>
<CAPTION>
RICH CITY'S
N.A.
DISTRIBUTION LEADING EDGE
BUSINESS SEPTEMBER 30,
MARCH 31, 1996 1996
CARVED OUT ACTUAL
-------------- -------------
<S> <C> <C>
(AUDITED)* (UNAUDITED)
ASSETS

Current assets:
Cash and cash equivalents....................................................... $ 35,002 $ 34,655
Accounts receivable, net of allowance for doubtful accounts--March 31, 1996,
$5,944; September 30, 1996, $7,658............................................ 192,199 247,617
Bills receivable (Note 2)....................................................... 169,516 1,531,516
Inventories (Note 3)............................................................ -- 585,668
Advances to head office (Note 4)................................................ 1,151,836 --
Deposits paid to holding company (Note 5)....................................... -- 1,299,040
Prepaid expenses and other current assets....................................... 54,832 216,475
-------------- -------------
Total current assets.......................................................... 1,603,385 3,914,971
Property, plant and equipment, net of accumulated depreciation-- March 31, 1996,
$56,978; September 30, 1996, $365 (Note 6)....................................... 193,295 29,211
-------------- -------------
Total assets.................................................................. $ 1,796,680 $ 3,944,182
-------------- -------------
-------------- -------------
LIABILITIES AND DIVISION/SHAREHOLDER'S EQUITY

Current liabilities:
Accounts payable to a related party/holding company (Note 7).................... $ 1,655,308 $ 1,761,080
Accrued liabilities............................................................. 141,372 142,644
Income taxes payable (Note 9)................................................... -- 585,374
-------------- -------------
Total current liabilities..................................................... 1,796,680 2,489,098
-------------- -------------
Commitments and contingencies (Note 10)........................................... -- --
Division/shareholder's equity:
Common stock $0.01 par value--authorized 5,000,000 shares, issued and
outstanding 1,875,000 shares.................................................. -- 18,750
Additional paid-in capital...................................................... -- 481,250
Retained earnings............................................................... -- 955,084
-------------- -------------
Total division/shareholder's equity........................................... -- 1,455,084
-------------- -------------
Total liabilities and division/shareholder's equity........................... $ 1,796,680 $ 3,944,182
-------------- -------------
-------------- -------------
</TABLE>

See accompanying notes to unaudited interim financial information

* Assets and liabilities of the N.A. Distribution Business as at March 31,
1996 were not transferred to Leading Edge. The comparative balance sheet is
for information purposes only.

F-19
<PAGE>
UNAUDITED INTERIM STATEMENTS OF INCOME

Net sales........................................................................ $ 5,210,228 $ 5,551,581
Cost of sales from a related party/holding company (Note 7)...................... 3,131,142 3,736,403
---------------- -------------
Gross profit..................................................................... 2,079,086 1,815,178
---------------- -------------
Selling expenses................................................................. 222,812 162,923
General and administrative expenses.............................................. 318,680 111,797
---------------- -------------
Selling, general and administrative expenses (Note 8)............................ 541,492 274,720
---------------- -------------
Operating income................................................................. 1,537,594 1,540,458
Interest expense................................................................. (22,237) --
Other income..................................................................... 1,057 --
---------------- -------------
Income before income taxes....................................................... 1,516,414 1,540,458
Income taxes (Note 9)............................................................ -- 585,374
---------------- -------------
Net income....................................................................... $ 1,516,414 $ 955,084
---------------- -------------
---------------- -------------
</TABLE>

See accompanying notes to unaudited interim financial information

F-20
<PAGE>
UNAUDITED INTERIM STATEMENTS OF DIVISION/
SHAREHOLDER'S EQUITY

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK ADDITIONAL DIVISION/
--------------------- PAID-IN RETAINED SHAREHOLDER'S
SHARES AMOUNT CAPITAL EARNINGS EQUITY
---------- --------- ---------- ------------ -------------

<S> <C> <C> <C> <C> <C>
Rich City's N.A. Distribution Business (audited):
Balance as of April 1, 1995...................... -- $ -- $ -- $ -- $ --
Net income for the period........................ -- -- -- 3,200,595 3,200,595
Distribution to Head Office...................... (3,200,595) (3,200,595)
---------- --------- ---------- ------------ -------------
Balance as of March 31, 1996..................... -- $ -- $ -- $ -- $ --
---------- --------- ---------- ------------ -------------
---------- --------- ---------- ------------ -------------
Leading Edge (unaudited):
Balance as of April 1, 1996...................... 1,875,000 $ 18,750 $ -- $ -- $ 18,750
Net income for the period........................ -- -- -- 955,084 955,084
Contribution by Rich City of part of accounts
payable to Rich City........................... -- -- 481,250 -- 481,250
---------- --------- ---------- ------------ -------------
Balance as of September 30, 1996................. 1,875,000 $ 18,750 $ 481,250 $ 955,084 $ 1,455,084
---------- --------- ---------- ------------ -------------
---------- --------- ---------- ------------ -------------
</TABLE>

See accompanying notes to unaudited interim financial information

F-21
<PAGE>
UNAUDITED INTERIM STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
RICH CITY'S
N.A.
DISTRIBUTION LEADING EDGE
BUSINESS SIX MONTHS
SIX MONTHS ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1996
CARVED OUT ACTUAL
---------------- -------------
<S> <C> <C>
(UNAUDITED) (UNAUDITED)
Cash flows from operating activities:
Net income..................................................................... $ 1,516,414 $ 955,084
Adjustment to reconcile net income to net cash provided by operating
activities:
Depreciation................................................................. 13,335 365
Changes in operating assets and liabilities:
Accounts receivable........................................................ 104,625 (247,617)
Bills receivable........................................................... 87,788 (1,531,516)
Inventories................................................................ -- (585,668)
Deposits paid to holding company........................................... -- (1,299,040)
Prepaid expenses and other current assets.................................. 3,313 (216,475)
Accounts payable to a related party/holding company........................ 264,337 2,259,580
Accrued liabilities........................................................ 81,090 142,644
Income taxes payable....................................................... -- 585,374
---------------- -------------
Net cash provided by operating activities........................................ 2,070,902 62,731
---------------- -------------
Cash flows from investing activities:
Purchases of property, plant and equipment..................................... (1,772) (29,576)
---------------- -------------
Cash used in investing activities................................................ (1,772) (29,576)
---------------- -------------
Cash flows from financing activities:
Increase in advances to head office............................................ (2,300,248) --
---------------- -------------
Cash used in financing activities................................................ (2,300,248) --
---------------- -------------
Net (decrease) increase in cash and cash equivalents............................. (231,118) 33,155
Cash and cash equivalents at beginning of period................................. 290,130 1,500
---------------- -------------
Cash and cash equivalents at end of period....................................... $ 59,012 $ 34,655
---------------- -------------
---------------- -------------
Supplemental disclosures of cash flow information:
Interest paid.................................................................. $ 22,237 $ --
Income taxes paid.............................................................. -- --
</TABLE>

During the six months ended September 30, 1996, the holding company
contributed additional capital of $481,250 by reduction of the accounts payable
to holding company.

See accompanying notes to unaudited interim financial information

F-22
<PAGE>
NOTES TO UNAUDITED INTERIM FINANCIAL INFORMATION

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

During the six months ended September 30, 1995, the N.A. Distribution
Business adopted the same accounting policies as stated in Note 2 of its audited
financial statements on pages F-8 and F-9. During the six months ended September
30, 1996, Leading Edge has adopted the following additional accounting policy:

INCOME TAXES--The Company has adopted the liability method of accounting for
income taxes, as set forth in Statement of Financial Accounting Standards
No.109, "Accounting for Income Taxes" ("SFAS 109"). Under the liability method,
deferred taxes are determined based upon the difference between the financial
statement and tax bases of assets and liabilities at enacted tax rates in effect
in the years in which the differences are expected to reverse. Deferred tax
expense (benefit) represents the change in the deferred tax balances.

2. BILLS RECEIVABLE

Bills receivable represent accounts receivable in the form of bills of
exchange, whose acceptances and settlements are handled by banks. At September
30, 1996, bills receivable of $1,255,453 were provided as collateral for banking
facilities provided to Rich City. The Company has made no charge for providing
this collateral.

At September 30, 1996, the Company had not factored any bills receivable
with financial institutions with recourse.

3. INVENTORIES

Effective April 1, 1996, the Company maintains inventories for distribution
to customers in the United States and inventories represent finished goods held
for resale.

4. ADVANCES TO HEAD OFFICE

<TABLE>
<CAPTION>
RICH CITY'S
N.A.
DISTRIBUTION
BUSINESS
MARCH 31, 1996
CARVED OUT
--------------
<S> <C>
(AUDITED)

Advances to Rich City:
Balance as of April 1, 1995................................................... $ (362,384)
Net advances to head office................................................... 1,514,220
--------------
Balance as of March 31, 1996.................................................. $ 1,151,836
--------------
--------------
</TABLE>

The advances are unsecured, non-interest bearing and repayable on demand.

5. DEPOSITS PAID TO HOLDING COMPANY

The amount represents deposits paid to Rich City for purchase orders placed
by the Company as stipulated in the Agreement.

F-23
<PAGE>
NOTES TO UNAUDITED INTERIM FINANCIAL INFORMATION (CONTINUED)

6. PROPERTY PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
RICH CITY'S
N.A.
DISTRIBUTION LEADING EDGE
BUSINESS SEPTEMBER 30,
MARCH 31, 1996 1996
CARVED OUT ACTUAL
-------------- -------------
<S> <C> <C>
(AUDITED) (UNAUDITED)

Property, plant and equipment consists of the following:
Furniture, fixtures and equipment............................. $ 147,988 $ 29,576
Leasehold improvements........................................ 102,285 --
-------------- -------------
Total......................................................... 250,273 29,576
Less: Accumulated depreciation................................ (56,978) (365)
-------------- -------------
Net book value................................................ $ 193,295 $ 29,211
-------------- -------------
-------------- -------------
</TABLE>

7. ACCOUNTS PAYABLE TO AND PURCHASES FROM A RELATED PARTY

AND HOLDING COMPANY

Starting from April 1, 1996, Leading Edge purchases packaging products from
Breakspear Limited, a related party, through Rich City; previously Breakspear
Limited was the sole supplier for packaging products to Rich City.

Accounts payable to Breakspear Limited and Rich City at March 31, 1996 and
September 30, 1996 were $1,655,308 and $1,761,080, respectively. Total purchases
from Breakspear Limited and Rich City during the six months ended September 30,
1995 and 1996 were $3,131,142 and $4,322,071, respectively.

8. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Because Leading Edge was still establishing its operations independently of
Rich City at September 30, 1996, the level of selling, general and
administrative expenses were low.

If full-scale operations had been implemented, during the six months ended
September 30, 1996, the estimated additional expense for office and warehouse
rentals, including building management fees, employee compensation and property
depreciation would have been approximately $114,000, $90,000 and $31,000,
respectively.

Effective April 1, 1996, under the Distribution Agreement with Rich City the
inventory purchase price payable by the Company will equal Rich City's cost to
manufacture the Packaging Products plus a 6-8% mark-up depending upon the
product type. This 6-8% mark-up will also cover Rich City's costs to process
orders for the Company, including salaries, office space and the use of
equipment.

9. INCOME TAXES

No taxation has been provided for the six months ended September 30, 1995 as
the carved out business was not subject to taxation either in Hong Kong or the
United States. For the six months ended September 30, 1996, the Company is
subject to the income tax in the United States and an income tax expense has
been computed using a rate of 38% for U.S. Federal and State income taxes.

There were no significant temporary timing differences during the periods or
at the balance sheet dates.

F-24
<PAGE>
NOTES TO UNAUDITED INTERIM FINANCIAL INFORMATION (CONTINUED)

10. COMMITMENTS AND CONTINGENCIES

(a) At March 31, 1996, the N.A. Distribution Business had factored gross
bills receivable of $1,074,008 at a discount of $14,477 with banks with
recourse.

The N.A. Distribution Business leases premises under various operating
leases which do not contain any renewal and escalation clauses. Rental
expense under operating leases was $57,876 for the year ended March 31,
1996.

Minimum rental commitments at March 31, 1996 under operating leases
include $13,994 due in 1997. The N.A. Distribution Business had no other
capital commitments.

(b) At September 30, 1996, Leading Edge leases premises under various
operating leases which do not contain any renewal and escalation clauses.
Rental expense under operating leases included in the statement of income
was $1,300 for the six months ended September 30, 1996.

As at September 30, 1996, Leading Edge had no capital commitment but was
obligated under operating leases requiring minimum rentals as follows:

<TABLE>
<S> <C>
Year ending March 31,

1997.......................................................... 92,610
1998.......................................................... 243,721
1999.......................................................... 237,221
2000.......................................................... 237,221
2001.......................................................... 237,221
2002.......................................................... 127,855
---------
Total minimum lease payments.................................... $1,175,849
---------
---------
</TABLE>

F-25
<PAGE>
INTRODUCTION TO UNAUDITED PRO FORMA

STATEMENTS OF INCOME

The unaudited pro forma statements of income of Rich City's North American
distribution business (the "N.A. Distribution Business") for the six months
ended September 30, 1995, and for the year ended March 31, 1996 (the "Periods")
have been prepared on a "Carved-Out Basis" as discussed in Note 1 to the audited
financial statements of N.A. Distribution Business on pages F-7 and F-8, and
after making such pro forma adjustments as described in Note 1 (a) and (b) to
this unaudited pro forma statements of income on page F-28 which give effect to
the current operating structure of Leading Edge Packaging, Inc. ("Leading Edge")
as if the Assignment and Distribution Agreement ("Agreement") dated September
23, 1996 had been in place since April 1, 1995 and throughout the Periods.

The unaudited pro forma statement of income of Leading Edge for the six
months ended September 30, 1996 has been adjusted after making the pro forma
adjustment as described in Note 1 (c) to this unaudited pro forma statements of
income on page F-28.

The unaudited pro forma statements of income for the Periods do not purport
to represent what the results of operations of the N.A. Distribution Business or
Leading Edge would actually have been had the events described above in fact
occurred on such date or at the beginning of the Periods, or to project the
results of the operations of the N.A. Distribution Business or Leading Edge for
any future date or period.

The unaudited pro forma statements of income should be read in conjunction
with the audited financial statements of the N.A. Distribution Business and
Leading Edge, including the notes thereto, and other financial information
included elsewhere in this Prospectus.

F-26
<PAGE>
UNAUDITED PRO FORMA STATEMENTS OF INCOME

N.A. DISTRIBUTION BUSINESS

<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, YEAR ENDED YEAR ENDED
1995 PRO FORMA 1995 MARCH 31, 1996 PRO FORMA MARCH 31, 1996
CARVED OUT ADJUSTMENTS PRO FORMA CARVED OUT ADJUSTMENTS PRO FORMA
------------- ----------- ------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net sales...................... $ 5,210,228 $ 5,210,228 $ 10,987,470 $ 10,987,470
Cost of sales from a related 3,131,142 Not 6,635,318 Not
party/head office............. 1a) 203,524 3,334,666 1a) 431,296 7,066,614
------------- ------------- -------------- --------------
Gross profit................... 2,079,086 1,875,562 4,352,152 3,920,856
------------- ------------- -------------- --------------
Selling expenses............... 222,812 222,812 451,327 451,327
General and administrative
expenses...................... 318,680 318,680 653,283 653,283
------------- ------------- -------------- --------------
Selling, general and
administrative expenses....... 541,492 541,492 1,104,610 1,104,610
------------- ------------- -------------- --------------
Operating income............... 1,537,594 1,334,070 3,247,542 2,816,246
Interest expense............... (22,237) (22,237) (53,961) (53,961)
Other income................... 1,057 1,057 7,014 7,014
------------- ------------- -------------- --------------
Income before income taxes..... 1,516,414 1,312,890 3,200,595 2,769,299
-- Not -- Not
Income taxes................... 1b) 498,898 498,898 1b) 1,052,334 1,052,334
------------- ------------- -------------- --------------
Net income..................... $ 1,516,414 $ 813,992 $ 3,200,595 $ 1,716,965
------------- ------------- -------------- --------------
------------- ------------- -------------- --------------
</TABLE>

LEADING EDGE

<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 PRO FORMA 1996
ACTUAL ADJUSTMENTS PRO FORMA
------------- ----------- -------------
<S> <C> <C> <C>
Net sales.................................................................. $ 5,551,581 $ 5,551,581
Cost of sales from holding company......................................... 3,736,403 3,736,403
------------- ----------- -------------
Gross profit............................................................... 1,815,178 1,815,178
------------- ----------- -------------
Selling expenses........................................................... 162,923 162,923
111,797 Not
General and administrative expenses........................................ 1c) 21,048 132,845
------------- ----------- -------------
Selling, general and administrative expenses............................... 274,720 295,768
------------- ----------- -------------
Income before income taxes................................................. 1,540,458 1,519,410
585,374 Not
Income taxes............................................................... 1c) (7,998) 577,376
------------- ----------- -------------
Net income................................................................. $ 955,084 $ 942,034
------------- -------------
------------- -------------
</TABLE>

See accompanying notes to unaudited pro forma statements of income

F-27
<PAGE>
NOTES TO UNAUDITED PRO FORMA STATEMENTS OF INCOME

1. ASSUMPTIONS AND DESCRIPTION OF PRO FORMA ADJUSTMENTS

The pro forma adjustments were made under the following assumptions:

(i) The N.A. Distribution Business purchases goods from Rich City on an
"as needed" basis, therefore, no inventories were kept by the N.A.
Distribution Business during the Periods and the N.A. Distribution Business
did not lease any warehouse.

(ii) Effective April 1, 1996, Leading Edge operated under the terms of
the Agreement. In November 1996, Leading Edge leased a warehouse facility to
maintain inventory in the United States, in order to reduce the delivery
period of its products. Management believes this strategy will immediately
increase sales and market share. The costs of maintaining such a facility
along with the projected resulting revenues have not been presented in the
Pro Forma statements of operations for the six months ended September 30,
1996.

A description of the pro forma adjustments is as follows:

(a) To adjust for the increase in cost of sales for goods purchased from
Rich City during the Periods in accordance with the pricing policy as
stipulated in the Agreement. This represented an average 6.5% mark-up on the
total purchases from the related party.

(b) To provide income taxes calculated using an estimated average
effective tax rate in the United States of America of 38% for U.S. Federal
and State income taxes.

F-28
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO UNDERWRITER, DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 6
The Company.................................... 14
Use of Proceeds................................ 14
Capitalization................................. 15
Dilution....................................... 16
Dividend Policy................................ 17
Selected Historical and Pro Forma Financial
Data......................................... 17
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................... 19
Business....................................... 24
Management..................................... 30
Certain Transactions........................... 34
Principal Stockholders......................... 35
Description of Securities...................... 36
Shares Eligible for Future Sale................ 37
Underwriting................................... 38
Legal Matters.................................. 39
Experts........................................ 39
Additional Information......................... 40
Index to Financial Statements.................. F-1
</TABLE>

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

UNTIL , 1996, ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN ADDITION TO
THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

[LOGO]

1,250,000 SHARES OF

COMMON STOCK

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

PROSPECTUS

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

GILFORD SECURITIES INCORPORATED

----------------- , 1996

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the various expenses incurred in connection
with the issuance and distribution of the securities being registered hereby,
other than the underwriting discount and non-accountable expense allowance,
expected to be incurred by the Company:

<TABLE>
<S> <C>
SEC registration fee........................................... $ 2,974.14
NASD fee....................................................... $ 1,362.50
State securities law fees and expenses......................... $45,600.00
Nasdaq membership listing fee.................................. $20,625.00
Printing and engraving expenses................................ $100,000.00
Legal fees and expenses........................................ $180,000.00
Accounting fees and expenses................................... $320,000.00
Transfer Agent fee............................................. $ 5,000.00
Miscellaneous.................................................. $ 4,438.36
----------
TOTAL.................................................... $680,000.00
----------
----------
</TABLE>

All amounts in the above table are estimated except the SEC registration
fee, the NASD fee and the Nasdaq membership listing fee.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a corporation may indemnify directors and officers as well
as other employees and individuals against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation, a
"derivative action"), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, if they had
no reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses (including attorneys' fees) incurred in connection with the
defense or settlement of such actions, and the statute requires court approval
before there can be any indemnification where the person seeking indemnification
has been found liable to the corporation. The statute provides that it is not
exclusive of other indemnification that may be granted by a corporation's
bylaws, disinterested director vote, stockholder vote, agreement or otherwise.

The Certificate of Incorporation of the Company, as amended, (the
"Certificate") provides that each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such person, or a person of whom such person is the legal
representative, is or was a director or officer of the Company or is or was
serving at the request of the Company as a director or officer of the Company or
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action in an official capacity
as a director, officer, employee or agent or in any other capacity while serving
as a director, officer, employee or agent, will be indemnified and held harmless
by the Company to the fullest extent authorized by the DGCL, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said

II-1
<PAGE>
law permitted the Company to provide prior to such amendment), against all
expense, liability and loss reasonably incurred or suffered by such person in
connection therewith. Such right to indemnification includes the right to have
the Company pay the expenses incurred in defending any such proceeding in
advance of its final disposition, subject to the provisions of the DGCL. Such
rights are not exclusive of any other right which any person may have or
acquire.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On March 31, 1996, the Company issued 1,500 shares of the Common Stock to
Rich City International Packaging Limited, a Hong Kong Company with limited
liability ("Rich City"). As consideration for such shares, Rich City paid
$500,000 in cash and reduction of accounts payable by the Company to Rich City.
On September 23, 1996, the Company effected a stock split allowing for the
conversion of each share of Common Stock into 1,250 shares of Common Stock.

The Company believes that issuance of the foregoing securities was exempt
from registration pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act"), because the securities were offered and sold in
transactions not involving a public offering.

ITEM 16. EXHIBITS AND FINANCIAL SCHEDULES.

(A) EXHIBITS.

<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement**
3.1 Certificate of Incorporation, as amended**
3.2 Amended and Restated By-laws**
4.1 Specimen Certificate for Shares of Common Stock**
4.2 Form of Representative's Warrant Agreement**
4.3 Form of Representative's Warrant Certificate**
4.4 1996 Incentive Stock Option Plan**
5.1 Opinion and Consent of Bondy & Schloss LLP**
8.1 Opinion of Erving Brettell, Solicitors**
10.1 Assignment and Distribution between the Company and Rich City International Packaging
Limited, dated September 23, 1996**
10.2 Employment Agreement between the Company and Lip-Boon Saw, effective as of April 1,
1996**
10.3 Employment Agreement between the Company and Peter Yu-Siu Chu, dated September 23,
1996**
10.4 Employment Agreement between the Company and Dan Ben-Moshe, dated September 24, 1996**
10.5 Employment Agreement between the Company and Casey K. Tjang, dated September 23,
1996**
10.6 Lease between the Company and Empire State Building Company, dated April 3, 1996**
10.7 Lease between the Company and Center Realty, L.P., dated August 1996**
10.8 Form of Financial Advisory and Consulting Agreement**
23.1 Consent of Deloitte Touche Tohmatsu
23.3 Consent of Erving Brettell, Solicitors (included in item 8.1 above)**
23.5 Consent of Bondy & Schloss LLP (included in item 5.1 above)**
24 Powers of Attorney (included on Company signature page)**
</TABLE>

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

** Previously filed.

II-2
<PAGE>
(B) FINANCIAL STATEMENT SCHEDULES.

All supplemental schedules are omitted because they are not required or
because the information is shown in the financial statements or notes thereto.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1) For purpose of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To provide to the underwriters at the closing specified in the
underwriting agreement certificates in such denominations and registered in such
names as required by the underwriters to permit prompt delivery to each
purchaser.

II-3
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing of Form S-1 and has duly caused this Amendment No. 3 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Hong Kong, on November 27, 1996.

LEADING EDGE PACKAGING, INC.

By: /S/ LIP-BOON SAW
-----------------------------------------
Lip-Boon Saw, CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 to the Registration Statement has been signed by the following persons in
the capacities indicated on November 27, 1996.

SIGNATURE TITLE
- ------------------------------ ---------------------------

/s/ LIP-BOON SAW Chairman of the Board and
- ------------------------------ Chief Executive Officer
Lip-Boon Saw

* President and Chief
- ------------------------------ Operations Officer
Peter Yu-Siu Chu

/s/ CASEY K. TJANG Director, Chief Financial
- ------------------------------ Officer and Secretary
Casey K. Tjang

* Vice President/Marketing
- ------------------------------ and Sales
Dan Ben-Moshe

* Director
- ------------------------------
Richard Fung-Gea Wong

* Director
- ------------------------------
Peter L. Coker

* Director
- ------------------------------
Robert B. Goergen

<TABLE>
<S> <C> <C>
*By: /s/ CASEY K. TJANG
---------------------------------------
Casey K. Tjang
ATTORNEY-IN-FACT
</TABLE>

II-4
<PAGE>
EXHIBIT INDEX

<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement**
3.1 Certificate of Incorporation, as amended**
3.2 Amended and Restated By-laws**
4.1 Specimen Certificate for Shares of Common Stock**
4.2 Form of Representative's Warrant Agreement**
4.3 Form of Representative's Warrant Certificate**
4.4 1996 Incentive Stock Option Plan**
5.1 Opinion and Consent of Bondy & Schloss LLP**
8.1 Opinion of Erving Brettell, Solicitors**
10.1 Assignment and Distribution between the Company and Rich City International Packaging
Limited, dated September 23, 1996**
10.2 Employment Agreement between the Company and Lip-Boon Saw, effective as of April 1,
1996**
10.3 Employment Agreement between the Company and Peter Yu-Siu Chu, dated
September 23, 1996**
10.4 Employment Agreement between the Company and Dan Ben-Moshe, dated September 24, 1996**
10.5 Employment Agreement between the Company and Casey K. Tjang, dated September 23,
1996**
10.6 Lease between the Company and Empire State Building Company, dated April 3, 1996**
10.7 Lease between the Company and Center Realty, L.P., dated August 1996**
10.8 Form of Financial Advisory and Consulting Agreement**
23.1 Consent of Deloitte Touche Tohmatsu
23.3 Consent of Erving Brettell, Solicitors (included in item 8.1 above)**
23.5 Consent of Bondy & Schloss LLP (included in item 5.1 above)**
24 Powers of Attorney (included on Company signature page)**
</TABLE>

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

** Previously filed.

<PAGE>
EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 3 to the Registration Statement No.
333-12911 of Leading Edge Packaging, Inc. on Form S-1 of our reports on Rich
City International Packaging Limited's North American Distribution Business and
Leading Edge Packaging, Inc., both dated April 30, 1996, appearing in the
Prospectus, which are a part of this Registration Statement. We also consent to
the reference to us under the heading "Experts" in such Prospectus.

/s/ DELOITTE TOUCHE TOHMATSU
Deloitte Touche Tohmatsu
Hong Kong
November 27, 1996