LEADING EDGE PACKAGING INC, S-1/A, 1996-10-10

LEADING EDGE PACKAGING INC
S-1/A, 1996-10-10
MISCELLANEOUS NONDURABLE GOODS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 10, 1996.

REGISTRATION NO. 333-12911

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

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

LEADING EDGE PACKAGING, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<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: / /

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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 OCTOBER 10, 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
Company has applied to include the Common Stock on the Nasdaq National Market
("Nasdaq") under the symbol "LEPI."
------------------------

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 "Underwriter") in the form of a non-accountable expense
allowance. In addition, see "Underwriting" for information concerning
indemnification and contribution arrangements with and other compensation
payable to the Underwriter.

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

(3) The Company has granted to the Underwriter 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 Underwriter, subject to prior sale,
when, as and if delivered to and accepted by the Underwriter, subject to
approval of certain legal matters by its counsel and subject to certain other
conditions. The Underwriter reserves 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 UNDERWRITER 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.
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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 UNDERWRITER'S OVER-ALLOTMENT
OPTION OR THE UNDERWRITER'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 substantially 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's source of supply
allows 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."

Proposed Nasdaq 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 three months ended June 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 three months ended June
30, 1995, have been prepared on a "carved-out" basis as if the N.A. Distribution
Business had been operating independently. The financial statements of the
Company for the three months ended June 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 three months ended June 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 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.

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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 three months ended June 30, 1995 and 1996, respectively, and
the pro forma statements of income of the N.A. Distribution Business, 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>
RICH CITY'S
N.A. DISTRIBUTION
RICH CITY'S N.A. DISTRIBUTION BUSINESS BUSINESS LEADING EDGE
---------------------------------------------- ------------------------ ------------

<CAPTION>
YEAR ENDED MARCH 31, THREE MONTHS ENDED JUNE 30,
---------------------------------------------- --------------------------------------
(CARVED OUT) (CARVED OUT) (ACTUAL)
---------------------------------------------- ------------------------ ------------
(PRO (PRO
FORMA)(2) FORMA)(2)
1994 1995 1996 1996 1995 1995 1996
--------- --------- --------- ------------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.............................. $ 13,725 $ 6,311 $ 10,987 $10,987 $ 2,239 $2,239 $2,505
Gross profit........................... 4,296 2,289 4,352 3,921 875 787 808
Operating income....................... 3,073 1,482 3,247 2,917 623 559 727
Income before income taxes............. 3,052 1,473 3,201 2,870 616 552 727
Income taxes........................... 33 -- -- 1,091 -- 210 276
Net income(3).......................... 3,019 1,473 3,201 1,779 616 342 451
Earnings per share..................... -- -- -- 0.95 -- 0.18 0.24
Weighted average number of shares
outstanding.......................... -- -- -- 1,875,000 -- 1,875,000 1,875,000
</TABLE>

<TABLE>
<CAPTION>
RICH CITY'S N.A. DISTRIBUTION
BUSINESS
(CARVED-OUT)
-------------------------------
MARCH 31,
RICH CITY'S N.A. LEADING EDGE
DISTRIBUTION BUSINESS ---------------
(CARVED-OUT)
---------------------
JUNE 30,
--------------------------------------
-------------------------------
1994 1995 1996 1995 1996
--------- --------- --------- --------------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital.................... $ (116) $ (220) $ (194) $ 400 $ 951
Total assets....................... 4,559 1,044 1,797 1,613 1,557
Total liabilities.................. 4,549 1,044 1,797 997 606
Division/company equity............ 10 -- -- 616 951

1996
AS ADJUSTED(4)
---------------
<S> <C>
BALANCE SHEET DATA:
Working capital.................... $6,830
Total assets....................... 7,436
Total liabilities.................. 606
Division/company equity............ 6,830
</TABLE>

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(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 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.

(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 $382,000
for the three months ended June 30, 1995.

(4) 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 a joint
venture ("Joint Venture") in the People's Republic of China ("PRC") between an
affiliate of Rich City and a PRC enterprise. 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 Rich City's assets are presently
located in Hong Kong and the PRC. The Distribution Agreement requires
arbitration in New York of all disputes arising thereunder. However, in the
event the Company obtained an

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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 for foreign
investment, the prospects of private sector enterprises (of which the Joint
Venture is an example) 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 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
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.

7
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ADMINISTRATIVE AND REGULATORY COMPLIANCE

The Joint Venture's activities in the PRC are subject, in some
circumstances, to administrative inspections, audits and approvals by various
national and local agencies of the PRC government. There can be no assurance
that such approvals, when necessary or advisable, will be forthcoming. Any
failure by the Joint Venture to obtain such approvals or to comply 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.

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

8
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produce Packaging Products for distribution by the Company. Such a disruption
would thus cause delays in and possibility 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 highly concentrated in a
small number of 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 gross sales. For the three months ended June 30, 1995 and 1996, sales to
Rocket accounted for approximately 42.9% and 25.2% 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 gross 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.

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."

9
<PAGE>
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, 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 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.

10
<PAGE>
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
approximately 12 months from the effective date of the Company's Registration
statement for this offering. 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 $1,979,000 or 34% 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.

MANAGEMENT'S POTENTIAL CONFLICT OF INTEREST

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.

11
<PAGE>
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 $3.81 per share or
approximately 64%. 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 Underwriter, all officers, directors and the
sole stockholder of the Company, and holders of securities convertible,
exchangeable or exercisable for Common Stock, shall agree 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 shall further agree 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 Underwriter 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 Underwriter, 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 except pursuant to options and warrants
issued on the date hereof.

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 sole stockholder of
the Company or the issuance of Common Stock upon the exercise of the
Underwriter'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 Underwriter certain registration rights
with respect to the Common Stock underlying the Underwriter'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 Underwriter'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."

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

12
<PAGE>
and the Underwriter 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 $5,879,000 at an initial public
offering price of $6.00 per share after deducting the estimated underwriting
discount and expenses (and $6,857,750 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 51.0%
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..................................................... 1,979,000 33.6%
------------ -----
Total........................................................... $ 5,879,000 100.0%
------------ -----
------------ -----
</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.

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 Underwriter exercises 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 June 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>
JUNE 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 6,347,750

Retained earnings....................................................................... 451,090 451,090
---------- ------------

Total capitalization................................................................ $ 951,090 $ 6,830,090
---------- ------------
---------- ------------
</TABLE>

15
<PAGE>
DILUTION

The unaudited net tangible book value of the Company at June 30, 1996 was
approximately $951,090, or $0.51 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 June 30, 1996, would have been
approximately $6,830,090 or $2.19 per share. This represents an immediate
increase in pro forma net tangible book value of $1.68 per share to Rich City,
as the current stockholder, and an immediate dilution of $3.81 per share (or
63.5%) 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....... $ 0.51
Increase per share attributable to New Investors............................ $ 1.68
---------
Pro forma net tangible book value per share after the offering................ $ 2.19
---------
Dilution per share to New Investors........................................... $ 3.81
---------
---------
</TABLE>

If the Underwriter exercises its over-allotment option in full, the pro
forma net tangible book value will be $7,808,840 (or $2.36 per share), resulting
in an immediate dilution of $3.64 per share (or 61.1%) to New Investors.

The following table sets forth, at June 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 Underwriter exercises its 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 three months ended June 30,
1996. The financial statements of the N.A. Distribution Business for each of the
five years ended March 31, 1996 and for the three months ended June 30, 1995,
have been prepared on a "carved-out" basis as if the N.A. Distribution Business
had been operating independently. The financial statements of the Company for
the three months ended June 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 three
months ended June 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 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 three months ended June 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 three months ended June 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
RICH CITY'S N.A. DISTRIBUTION BUSINESS BUSINESS
(CARVED-OUT) (CARVED-OUT)
------------------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THREE MONTHS ENDED JUNE
YEAR ENDED MARCH 31, 30,
------------------------------------------------------------------- -----------------------
PRO FORMA(2) PRO FORMA(2)
1992 1993 1994 1995 1996 1996 1995 1995
--------- --------- --------- --------- --------- ------------ --------- ------------
INCOME STATEMENT DATA:
Net sales......................... $ 4,024 $ 8,768 $ 13,725 $ 6,311 $ 10,987 $10,987 $ 2,239 $2,239
Gross profit...................... 249 1,782 4,296 2,289 4,352 3,921 875 787
Operating income.................. 43 1,187 3,073 1,482 3,247 2,917 623 559
Income before income taxes........ 43 1,178 3,052 1,473 3,201 2,870 616 552
Income taxes(3)................... -- -- 33 -- -- 1,091 -- 210
Net income........................ 43 1,178 3,019 1,473 3,201 1,779 616 342
Earnings per share................ -- -- -- -- -- 0.95 -- 0.18
Weighted average number of shares
outstanding..................... -- -- -- -- -- 1,875,000 -- 1,875,000

LEADING
EDGE
(ACTUAL)
---------
<S> <C>

1996
---------
INCOME STATEMENT DATA:
Net sales......................... $2,505
Gross profit...................... 808
Operating income.................. 727
Income before income taxes........ 727
Income taxes(3)................... 276
Net income........................ 451
Earnings per share................ 0.24
Weighted average number of shares
outstanding..................... 1,875,000
</TABLE>

<TABLE>
<CAPTION>
RICH CITY'S N.A.
DISTRIBUTION
RICH CITY'S N.A. DISTRIBUTION BUSINESS BUSINESS
(CARVED-OUT) (CARVED-OUT)
----------------------------------------------------- -----------------
MARCH 31, JUNE 30,
----------------------------------------------------- -----------------
1992 1993 1994 1995 1996 1995
--------- --------- --------- --------- --------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital...................... $ 35 $ 1,183 $ (116) $ (220) $ (194) $ 400
Total assets......................... 810 2,496 4,559 1,044 1,797 1,613
Total liabilities.................... 767 1,274 4,549 1,044 1,797 997
Division/company equity.............. 43 1,222 10 -- -- 616

LEADING
EDGE
(ACTUAL)
-----------

JUNE 30,
-----------
1996
-----------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital...................... $ 951
Total assets......................... 1,557
Total liabilities.................... 606
Division/company equity.............. 951
</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 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.

(3) Effective April 1, 1996, the company is subject to United States income
taxes. Net income for th epriods gprior 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, $720,000, 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 $382,000 for the three months ended June 30, 1995.

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.

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 three months ended June 30, 1995 (the "1995
Period") as well as for the Company for the three months ended June 30, 1996
(the "1996 Period"); and (iv) Unaudited Pro Forma Statements of Income for the
N.A. Distribution Business for the three months ended June 30, 1995 (the "1995
Pro Forma Period") and for the year ended March 31, 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 1995 Period, 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 payable to Rich City for
inventory, the estimated salaries of the Company's employees and a 38% federal
income tax, all of which costs the Company will incur going forward. 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 1996 Period. The Statement of Income for the 1996 Period
excludes expenses for office and warehouse facilities, certain other
administrative costs and expenses absorbed by Rich City, including some staffing
and support, and advances for inventory. 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 leases for the office, warehouse and corporate apartment, estimated at
$208,000 on an annualized basis; 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
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,

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<PAGE>
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 1996 Period were $2,505,451 versus $2,238,916 for the 1995
Pro Forma Period. This increase of $266,535 or 11.9% 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, 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 1996 Period was
$1,697,329 versus $1,452,435 during the 1995 Pro Forma Period, an increase of
$244,894 or 16.8%. As a percentage of net sales, cost of sales from holding
company/related party increased to 67.7% from 64.9% during the respective
periods, primarily because of a variation of customer orders to 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

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<PAGE>
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 1996 Period, selling expenses were $36,548 versus $104,246 in the
1995 Pro Forma Period. As a percentage of net sales, selling expenses were 1.5%
during the 1996 Period versus 4.7% during the 1995 Pro Forma Period. Selling
expenses for the 1996 Period did not reflect certain items normally included, as
the Company had not established its office and warehouse operations and was only
incurring direct sales-related costs while benefiting from the absorption of
certain costs and expenses by Rich City. Selling expenses for the 1996 Period
were travel and related costs incurred by Lip-Boon Saw, the Company's Chairman
and Chief Executive Officer, in connection with the Company's sales in North
America. On the other hand, selling expenses for the 1995 Pro Forma Period
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. Commencing with the third quarter of fiscal
1997, selling expenses will include expense items as shown in the 1995 Pro Forma
Period. 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 form 3.2% to 4.1% from 1994
to 1995, primarily reflective of the extra expenses to expand sales after the
cessation of business with Jewelpak.

GENERAL AND ADMINISTRATIVE EXPENSES

During the 1996 Period, general and administrative expenses were $44,009
versus $123,261 in the 1995 Pro Forma Period. As a percentage of net sales,
general and administrative expenses were 1.8% for the 1996 Period and 5.5% for
the 1995 Pro Forma Period. General and administrative expenses for the 1996
Period do not reflect certain items normally included, as the Company had not
established its office and warehouse operations and was incurring only minimal
operating costs while benefiting from the absorption of certain costs and
expenses by Rich City. These expenses for the 1996 Period included $30,000
salary to Lip-Boon Saw, the Company's Chairman and Chief Executive Officer,
under his employment agreement with the Company and $14,000 in office and
warehouse start up expenses. On the other hand, general and administrative
expenses for the 1995 Pro Forma Period reflect the "carved-out" expenses of Rich
City attributable to the N.A. Distribution Business, including office rent,
supplies and salaries for non-sales personnel, 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 adjusted for in the 1995
Pro Forma Period plus warehouse and office expenses. 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 1996 period was $727,565 versus $558,974 in the
1995 Pro Forma Period, an increase of 30.2% or $168,591. As a percentage of net
sales, operating income increased from 25.0% to

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<PAGE>
29.0% during the respective periods. The increase was primarily due to the
increase in net sales, coupled with the selling and general and administrative
expenses 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 1996 Period, the Company had no interest expense. Interest
expense for the 1995 Pro Forma Period was $7,646. 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 $451,090 and
$342,479 for the 1996 Period and the 1995 Pro Forma Period, respectively. 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 1996 Period and for each of the three years ended March 31, 1996,
the Company experienced positive cash flows of $38,526, $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 1996 Period 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.

The 1996 Period reflects cash flows from operating activities of $38,526 as
compared with $803,497 for the 1995 Period. This is primarily due to U.S.
taxation, salaries and the 6-8% mark-up which are included in the 1996 Period
net income data but are not reflected in the data for the 1995 Period (although
they have been included in the 1995 Pro Forma Period). For the 1995 Period, no
inventory was maintained in the U.S. The 1996 Period reflects $415,545 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.

The Company expects to receive estimated net proceeds of $5,879,000 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.

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<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 substantially 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's source of supply
allows 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.

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<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 THREE MONTHS ENDED JUNE 30, 1996

<TABLE>
<CAPTION>
FISCAL YEAR MARCH 31, 3 MONTHS
------------------------------------------------------------------ ENDED
PRODUCT CATEGORY 1994 1995 1996 JUNE 30, 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%) $ 845,794 (33.8%)
Metal cases.......................... 4,733,484 (34.5) 1,295,868 (20.5) 3,203,000 (29.2) 835,292 (33.3)
Optical cases........................ 1,315,253 (9.6) 948,986 (15.0) 2,739,584 (24.9) 519,948 (20.8)
Pouches and bags..................... 1,184,797 (8.6) 536,767 (8.5) 437,623 (3.9) 193,801 (7.7)
Paper gift boxes, display items and
other products..................... 712,776 (5.2) 443,590 (7.0) 414,715 (3.8) 110,616 (4.4)
---------- --------- ---------- ---------
Total............................ $13,725,079 (100%) $6,310,879 (100%) $10,987,470 (100%) $2,505,451 (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

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<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 three months ended June
30, 1996. Metal cases accounted for approximately 33% 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 three months ended June 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 three months ended June 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 4% of the Company's total sales for the three months ended June
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.

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<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. 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-users in the industry prefer to deal with North
American distributors of Asian products, rather than deal

26
<PAGE>
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 gross sales. Sales to Rocket Jewelry Box Inc., Rich
City's largest North American customer during the period, accounted for
approximately 26.6% of gross 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 gross sales, respectively. Sales
to the ten largest customers represented approximately 83.1% of Rich City's
gross 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

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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 September 23, 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, 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.

28
<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 and 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 will serve as President and Chief Operating Officer of the
Company. 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 will serve as Vice President/Marketing and Sales of the
Company. 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.

29
<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. GEORGEN 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. Georgen has served as
President of Blyth Industries, Inc. since 1994. From 1990 to the present, Mr.
Georgen 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. Georgen 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 Underwriter has the right
to designate one member of the Company's Board of Directors. The Underwriter 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. Georgen 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.

30
<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 Peter Yu-Siu
Chu, 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. The agreement also
provides for bonuses as may be determined by the Board of Directors in its sole
discretion. The 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 $1000 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.

31
<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.
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.

32
<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. 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.

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

33
<PAGE>
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 $130,000 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.

During the three months ending September 30, 1996, Rich City advanced to the
Company $800,000 against inventory; this advance is to be repaid out of cash
flow from operations commencing in the three months ending December 31, 1996.

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 NUMBER SHARES NUMBER SHARES
- ----------------------------------------------------------- ---------- --------------- ---------- -----------------
Rich City International Packaging Limited.................. 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(1)............................................ -- -- -- --

Peter Yu-Siu Chu........................................... -- -- -- --

Peter L. Coker............................................. -- -- -- --

Robert B. Georgen.......................................... -- -- -- --

Dan Ben-Moshe.............................................. -- -- -- --

Casey K. Tjang............................................. -- -- -- --

Richard Fung-Gea Wong(1)................................... -- -- -- --

All officers and directors as a group...................... -- -- -- --
(7 persons)
</TABLE>

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

(1) 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.

34
<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

35
<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 Underwriter exercises its
over-allotment option in full) shares of Common Stock. Of these shares, the
1,250,000 (or 1,437,500 if the Underwriter exercises its 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 such shares will be eligible under Rule 144
for resale 24 months from the date of this Prospectus.

The Company 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 Common Stock of which they should become owners
(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.

36
<PAGE>
UNDERWRITING

Gilford Securities Incorporated (the "Underwriter") has 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 Underwriter on a firm commitment basis, all of the shares
of Common Stock offered hereby.

The Company has been advised by the Underwriter 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 Underwriter has informed the Company that it does not expect sales
to discretionary accounts by the Underwriter to exceed five percent of the
securities offered by the Company hereby.

The Company has granted to the Underwriter 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 Underwriter against certain
liabilities, including liabilities under the Securities Act. The Company has
agreed to pay to the Underwriter 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 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 Underwriter and (ii)
that, for 24 months following the effective date of the Registration Statement,
any sales of the Company's securities shall be made through the Underwriter 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 Underwriter and/or its designees, at the closing of the proposed
underwriting, for nominal consideration, five year Underwriter's Warrants (the
"Underwriter's Warrants") to purchase 125,000 shares of Common Stock. The
Underwriter's Warrants are exercisable at any time during a period of four years
commencing at the beginning of the second year after their issuance and sale at
a price of $ [120% of the initial public offering price per share of
Common Stock] per share of Common Stock. The Underwriter's Warrants contain
anti-dilution provisions providing for adjustment of the number of shares of
Common Stock and exercise price under certain circumstances. The Underwriter's
Warrants grant to the holders thereof and to the holders of the underlying
securities certain rights of registration of the securities underlying the
Underwriter's Warrants.

The Underwriting Agreement provides that the Underwriter has a right of
first refusal for a period of three years from the date of this Prospectus with
respect to any sale of securities made by the Company, its affiliates or
subsidiaries. The Company has also agreed to retain the Underwriter as the
Company's financial consultant for a period of 24 months from the date of this
Prospectus and to pay the Underwriter $2,000 per month in connection therewith,
the total amount of which ($48,000) is due upon consummation of the offering.

37
<PAGE>
The Company has agreed that for five years from the effective date of the
Registration Statement, the Underwriter may designate one person for election to
the Company's Board of Directors (the "Designation Right"). In the event that
the Underwriter 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
Underwriter'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 Underwriter. 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 Underwriter 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.

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.

38
<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-13
Balance sheet as of March 31, 1996......................................................................... F-14
Notes to balance sheet..................................................................................... F-15

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-17
Unaudited interim balance sheets at June 30, 1995 and 1996................................................. F-18
Unaudited interim statements of income for the three months ended June 30, 1995 and 1996................... F-19
Unaudited interim statements of division / shareholder's equity for the three months ended June 30, 1996... F-20
Unaudited interim statements of cash flows for the three months ended June 30, 1995 and 1996............... F-21
Notes to unaudited interim financial information........................................................... F-22

UNAUDITED PRO FORMA STATEMENTS OF INCOME FOR RICH CITY INTERNATIONAL PACKAGING LIMITED--NORTH AMERICAN
DISTRIBUTION BUSINESS
Introduction to unaudited pro forma statements of income................................................... F-24
Unaudited pro forma statements of income for the three months ended June 30, 1995 and the year ended March
31, 1996................................................................................................. F-25
Notes to unaudited pro forma statements of income.......................................................... F-26
</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 represents allocations made from head
office items applicable to the 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 the directors of Rich City consider
that all sales were made on an as needed basis.

(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 at each
year end date has been determined using the total purchases made in each

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)
year with reference to the average creditor turnover of Chung Hwa Group. The
average creditor turnover period based on Chung Hwa Group's payment practice
is 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.

(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.

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>

NET SALES--Net sales represent the invoiced value of products sold less
discounts and returns. The Company 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 resulting from the translation of foreign
currency transactions and balances are included in income.

F-8
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EMPLOYEE BENEFITS--Contributions payable to the Company's defined
contribution retirement benefit scheme are expensed as incurred. The Company
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.

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)
Net advances from Head Office................................. (3,066,232)
-------------
Balance as of March 31, 1994.................................. (3,070,208) $ (471,002)
--------------
--------------
Net repayments to Head Office................................. 2,707,824
-------------
Balance as of March 31, 1995.................................. (362,384) $ (430,412)
--------------
--------------
Net repayments to Head Office................................. 1,514,220
-------------
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-9
<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 bills
receivable with recourse amounting to $1,074,008. 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 includes
$13,994 due in 1997.

F-10
<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 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 of
$270,000 in respect of quality claims. As of March 31, 1994, he waived his
entitlement to reimbursement. He has also given an indemnity to Rich City 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 Rich
City to settle the trade receivables from that customer and professional
costs associated with these amounts. Mr. Chong Kim Fu subsequently received
settlement of the majority of these amounts from the customer and under the
terms of the indemnity, Mr. Chong Kim Fu has no claim against Rich City for
any reimbursement.

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-11
<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-12
<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-13
<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>
ASSETS

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-14
<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 an unanimous written consent that
the Company increased 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-15
<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-16
<PAGE>
INTRODUCTION TO UNAUDITED INTERIM FINANCIAL INFORMATION

The unaudited financial information of Leading Edge Packaging, Inc.
("Leading Edge") for the three months ended June 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.

The unaudited financial information of Rich City's North American
distribution business (the "N.A. Distribution Business") for the three months
ended June 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 1995 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 going forward basis, following the completion
of the public offering, the books and records of Leading Edge will be maintained
in U.S. dollars.

F-17
<PAGE>
UNAUDITED INTERIM BALANCE SHEETS

<TABLE>
<CAPTION>
RICH CITY'S
N.A.
DISTRIBUTION
BUSINESS LEADING EDGE
JUNE 30, 1995 JUNE 30, 1996
CARVED OUT ACTUAL
------------- -------------
<S> <C> <C>
(UNAUDITED) (UNAUDITED)
ASSETS

Current assets:
Cash and cash equivalents......................................................... $ 24,359 $ 39,526
Accounts receivable, net of allowance for doubtful accounts--1995, $3,230; 1996,
$27,771......................................................................... 104,438 897,935
Bills receivable (Note 2)......................................................... 541,636 145,095
Inventories (Note 3).............................................................. -- 415,545
Advances to head office (Note 4).................................................. 706,884 --
Prepaid expenses and other current assets......................................... 19,605 59,142
------------- -------------
Total current assets............................................................ 1,396,922 1,557,243
Property, plant and equipment, net of accumulated depreciation--1995, $30,075; 1996,
Nil (Note 5)....................................................................... 215,797 --
------------- -------------
Total assets.................................................................... $ 1,612,719 $ 1,557,243
------------- -------------
------------- -------------
LIABILITIES AND DIVISION/SHAREHOLDER'S EQUITY

Current liabilities:
Accounts payable to a related party/holding company (Note 6)...................... $ 868,440 $ 272,741
Accrued liabilities............................................................... 128,056 56,937
Income taxes payable (Note 8)..................................................... -- 276,475
------------- -------------
Total current liabilities....................................................... 996,496 606,153
------------- -------------
Commitments and contingencies (Note 9).............................................. -- --
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................................................................. 616,223 451,090
------------- -------------
Total division/shareholder's equity............................................. 616,223 951,090
------------- -------------
Total liabilities and division/shareholder's equity............................. $ 1,612,719 $ 1,557,243
------------- -------------
------------- -------------
</TABLE>

See accompanying notes to unaudited interim financial information

F-18
<PAGE>
UNAUDITED INTERIM STATEMENTS OF INCOME

Net sales........................................................................... $ 2,238,916 $ 2,505,451
Cost of sales from a related party/holding company (Note 6)......................... 1,363,789 1,697,329
------------- -------------
Gross profit........................................................................ 875,127 808,122
------------- -------------
Selling expenses.................................................................... 104,246 36,548
General and administrative expenses................................................. 148,069 44,009
------------- -------------
Selling, general and administrative expenses (Note 7)............................... 252,315 80,557
------------- -------------
Operating income.................................................................... 622,812 727,565
Interest expense.................................................................... (7,646) --
Other income........................................................................ 1,057 --
------------- -------------
Income before income taxes.......................................................... 616,223 727,565
Income taxes (Note 8)............................................................... -- 276,475
------------- -------------
Net income.......................................................................... $ 616,223 $ 451,090
------------- -------------
------------- -------------
</TABLE>

See accompanying notes to unaudited interim financial information

F-19
<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 (unaudited):
Balance as of April 1, 1995........................ -- $ -- $ -- $ -- $ --
Net income for the period.......................... -- -- -- 616,223 616,223
---------- --------- ---------- ---------- -------------
Balance as of June 30, 1995........................ -- $ -- $ -- $ 616,223 $ 616,223
---------- --------- ---------- ---------- -------------
---------- --------- ---------- ---------- -------------
Leading Edge (unaudited):
Balance as of April 1, 1996........................ 1,875,000 $ 18,750 $ -- $ -- $ 18,750
Net income for the period.......................... -- -- -- 451,090 451,090
Contribution by Rich City of part of accounts
payable to Rich City............................. -- -- 481,250 -- 481,250
---------- --------- ---------- ---------- -------------
Balance as of June 30, 1996........................ 1,875,000 $ 18,750 $ 481,250 $ 451,090 $ 951,090
---------- --------- ---------- ---------- -------------
---------- --------- ---------- ---------- -------------
</TABLE>

See accompanying notes to unaudited interim financial information

F-20
<PAGE>
UNAUDITED INTERIM STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
RICH CITY'S
N.A.
DISTRIBUTION
BUSINESS LEADING EDGE
THREE MONTHS THREE MONTHS
ENDED ENDED
JUNE 30, 1995 JUNE 30, 1996
CARVED OUT ACTUAL
------------- -------------
<S> <C> <C>
(UNAUDITED) (UNAUDITED)
Cash flows from operating activities:
Net income........................................................................ $ 616,223 $ 451,090
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation.................................................................... 4,425 --
Changes in operating assets and liabilities:
Accounts receivable........................................................... 57,884 (897,935)
Bills receivable.............................................................. (186,888) (145,095)
Inventories................................................................... -- (415,545)
Prepaid expenses and other current assets..................................... (2,882) (59,142)
Accounts payable to a related party/holding company........................... 267,313 771,741
Accrued liabilities........................................................... 47,422 56,937
Income taxes payable.......................................................... -- 276,475
------------- -------------
Net cash provided by operating activities........................................... 803,497 38,526
------------- -------------
Cash flows from financing activities:
Increase in advances to head office............................................... (1,069,268) --
------------- -------------
Cash used in financing activities................................................... (1,069,268) --
------------- -------------
Net (decrease) increase in cash and cash equivalents................................ (265,771) 38,526
Cash and cash equivalents at beginning of period.................................... 290,130 1,000
------------- -------------
Cash and cash equivalents at end of period.......................................... $ 24,359 $ 39,526
------------- -------------
------------- -------------
Supplemental disclosures of cash flow information:
Interest paid..................................................................... $ 7,646 $ --
Income taxes paid................................................................. -- --
</TABLE>

During the three months ended June 30, 1996, the holding company contributed
additional capital of $499,000 by reduction of the accounts payable to holding
company.

See accompanying notes to unaudited interim financial information

F-21
<PAGE>
NOTES TO UNAUDITED INTERIM FINANCIAL INFORMATION

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

During the three months ended June 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-9 and F-10. During the three months ended June
30, 1996, Leading Edge has adopted the following additional accounting policies:

INVENTORIES--Inventories comprise finished goods held for resale and are
stated at the lower of cost determined on the first-in, first-out method, and
market value.

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.

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
JUNE 30, 1995
CARVED OUT
-------------
<S> <C>
(UNAUDITED)

Advances to Rich City:
Balance as of April 1.......................................................... $ (362,384)
Net advances to head office.................................................... 1,069,268
-------------
Balance as of June 30.......................................................... $ 706,884
-------------
-------------
</TABLE>

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

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

5. PROPERTY PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
RICH CITY'S
N.A.
DISTRIBUTION
BUSINESS LEADING EDGE
JUNE 30, 1995 JUNE 30, 1996
CARVED OUT ACTUAL
------------- -------------
<S> <C> <C>
(UNAUDITED) (UNAUDITED)

Property, plant and equipment consists of the following:
Furniture, fixtures and equipment............................... $ 145,359 $ --
Leasehold improvements.......................................... 100,513 --
------------- -------------
Total........................................................... 245,872 --
Less: Accumulated depreciation.................................. (30,075) --
------------- -------------
Net book value.................................................. $ 215,797 $ --
------------- -------------
------------- -------------
</TABLE>

6. 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 June 30, 1995 and
1996 were $868,440 and $272,741, respectively. Total purchases from Breakspear
Limited and Rich City during the three months ended June 30, 1995 and 1996 were
$1,363,789 and $1,697,329, respectively.

7. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

As the operations of Leading Edge were still in a start up stage at June 30,
1996, Leading Edge had not acquired any property, plant and equipment or entered
into any operating leases for warehouse and office premises. Leading Edge has
relied on Rich City during the period to provide administrative support.

The directors estimate that on a normal operating basis, additional expense
for office and warehouse rentals, including building management fees, employee
compensation and property depreciation for the three months ended June 30, 1996,
would be approximately $57,000, $45,000 and $15,500, respectively.

8. INCOME TAXES

No taxation has been provided for the three months ended June 30, 1995 as
the carved out business was not subject to taxation either in Hong Kong or the
United States. For the three months ended June 30, 1996, the Company is subject
to the income tax in the United States and a 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.

9. COMMITMENTS AND CONTINGENCIES

At June 30, 1995 and 1996, the N.A. Distribution Business and Leading Edge
had no operating lease commitments or capital commitments. Both entities,
however, at June 30, 1995 and 1996, had factored bills receivable with recourse
amounting to $1,654,417 and $542,128, respectively.

F-23
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

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 three months
ended June 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-8 and F-9 and
after making such pro forma adjustments as described in Note 1 to this unaudited
pro forma statements of income on page F-30 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 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-24
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED
--NORTH AMERICAN DISTRIBUTION BUSINESS

UNAUDITED PRO FORMA STATEMENTS OF INCOME

<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED YEAR ENDED YEAR ENDED
JUNE 30, 1995 PRO FORMA JUNE 30, 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...................... $ 2,238,916 $ 2,238,916 $ 10,987,470 $ 10,987,470
Cost of sales from a related 1,363,789 Not 6,635,318 Not
party/head office............. 1a) 88,646 1,452,435 1a) 431,296 7,066,614
------------- ------------- -------------- --------------
Gross profit................... 875,127 786,481 4,352,152 3,920,856
------------- ------------- -------------- --------------
Selling expenses............... 104,246 104,246 451,237 451,237
General and administrative 148,069 Not 653,283 Not
expenses...................... 1b) (24,808) 123,261 1b) (100,661) 552,622
------------- ------------- -------------- --------------
Selling, general and
administrative expenses....... 252,315 227,507 1,104,610 1,003,949
------------- ------------- -------------- --------------
Operating income............... 622,812 558,974 3,247,542 2,916,907
Interest expense............... (7,646) (7,646) (53,961) (53,961)
Other income................... 1,057 1,057 7,014 7,014
------------- ------------- -------------- --------------
Income before income taxes..... 616,223 552,385 3,200,595 2,869,960
-- Not -- Not
Income taxes................... 1c) 209,906 209,906 1c) 1,090,585 1,090,585
------------- ------------- -------------- --------------
Net income..................... $ 616,223 $ 342,479 $ 3,200,595 $ 1,779,375
------------- ------------- -------------- --------------
------------- ------------- -------------- --------------
</TABLE>

See accompanying notes to unaudited pro forma statements of income

F-25
<PAGE>
RICH CITY INTERNATIONAL PACKAGING LIMITED

--NORTH AMERICAN DISTRIBUTION BUSINESS

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 on April 1, 1995, the N.A. Distribution Business operated
under the terms of the Agreement.

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 adjust for the difference in salaries and allowances based on
directors' estimation of the employee requirements of Leading Edge.

The directors of Leading Edge estimate that Leading Edge requires two
directors and 9 employees, comprising two executives, a sales manager, 2
sales persons and 4 other accounting and administrative staff. The estimated
salaries of the directors and employees range from $24,000 to $120,000 per
annum per individual.

(c) 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-26
<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....................................... 23
Management..................................... 29
Certain Transactions........................... 33
Principal Stockholders......................... 34
Description of Securities...................... 35
Shares Eligible for Future Sale................ 36
Underwriting................................... 37
Legal Matters.................................. 38
Experts........................................ 38
Additional Information......................... 38
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......................... $30,000.00
Nasdaq membership listing fee.................................. $ 6,250.00
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.................................................. $ 413.36
----------
TOTAL.................................................... $646,000.00
----------
----------
</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. 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 Underwriter's Warrant Agreement*
4.3 Form of Underwriter'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>

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

* To be filed by amendment

** 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. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Hong Kong, on October 9, 1996.

LEADING EDGE PACKAGING, INC.

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

POWERS OF ATTORNEY

KNOW TO ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Lip-Boon Saw and Casey K. Tjang and each of them,
as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and any registration statement
related thereto pursuant to Rule 462(b) of the Securities Act of 1933, and to
file the same with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities indicated on October 9, 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

/s/ ROBERT B. GEORGEN Director
- ------------------------------
Robert B. Georgen

<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 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 Underwriter's Warrant Agreement*
4.3 Form of Underwriter'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*
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>

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

* To be filed by amendment

** Previously filed.

<PAGE>

EXHIBIT 4.4

LEADING EDGE PACKAGING, INC.

1996 INCENTIVE STOCK OPTION PLAN

1. PURPOSE. Leading Edge Packaging, Inc. (the "Company")
hereby establishes the Leading Edge Packaging, Inc. 1996 Incentive Stock
Option Plan (the "Plan"). The purpose of the Plan is to advance the
interests of the Company and its stockholders by providing a means by which
the Company shall be able to attract and retain competent key employees
(including officers and directors who are also key employees) and
provide such personnel with an opportunity to participate in the
increased value of the Company which their effort, initiative, and skill
have helped produce. The stock options granted under this Plan are
intended to qualify as incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").

2. ADMINISTRATION.

(a) The Plan will be administered by a Plan committee
(the "Committee"), designated by the Board of Directors of the Company (the
"Board"), which shall include one or more members of

<PAGE>

the Board; provided, however, that at any time that the Company becomes
subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the Board may appoint members to the
Committee, and the Committee must act, only in accordance with the
requirements of Rule 16b-3 promulgated pursuant to Section 16(b) of the
Exchange Act ("Rule 16b-3"). The Committee may make such rules and
regulations and establish such procedures as it deems appropriate for the
administration of this Plan. The Committee may interpret this Plan,
prescribe, amend or rescind any rules and regulations necessary or
appropriate for the administration of this Plan, and make such other
determinations and take such other action as it deems necessary or advisable.
Without limiting the generality of the foregoing, the Committee may, in its
sole discretion, treat all or any portion of any period during which a
optionee is on military leave or on an approved leave of absence from the
Company or a Subsidiary (as hereinafter defined) as a period of employment of
such optionee by the Company or such Subsidiary, as the case may be, for the
purpose of accrual of his option rights. Any interpretation, determination
or other action made or taken by the Committee shall be final, binding and
conclusive, and the decision of the Committee shall be final and binding upon
all parties in interest, including the Company and its

<PAGE>

stockholders. Any decision or determination reduced to writing and signed by
all members of the Committee shall be fully as effective as if made by
unanimous vote at a meeting duly called and held.

(b) The Committee may employ such legal counsel, consultants
and agents as it may deem desirable for the administration of this Plan and
may rely upon any opinion received from any such counsel or
consultant and any computation received from any such consultant or agent.

(c) No member or former member of the Committee shall be liable
for any action or determination made in good faith with respect to this Plan
or any option awarded under it. To the maximum extent permitted by
applicable law, each member or former member of the Committee shall be
indemnified and held harmless by the Company against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement
of a claim) arising out of any action or omission to act in connection
with this Plan, unless arising out of such member's or former member's own
fraud or bad faith. Such indemnification shall be in addition to any
rights of indemnification the member or former member may have as director
or under the By-laws of the Company.

<PAGE>

(d) The Committee shall have complete authority in its
sole discretion to determine which participants under this Plan shall
be granted options and the number of shares of the Company's stock to be
subject to each option.

(e) The Committee shall report to the Board annually the names
of those key employees granted options during the preceding year, the
number of shares covered by each option and the applicable option prices.

3. ELIGIBILITY. The individuals who shall be eligible to participate
in this Plan and to receive options shall be such key employees (including
officers and directors who are also key employees) of the Company or any
subsidiary (the "Subsidiary"), within the definition of subsidiary
corporation in Section 424(f) of the Code, or any similar provision
hereinafter enacted, as the Committee shall from time to time determine.

4. STOCK SUBJECT TO PLAN.

(a) Options may be granted permitting the purchase in the aggregate
of not more than 312,500 shares of the Company's common

<PAGE>

stock, par value, $0.01 per share ("Common Stock"). These shares may consist
either in whole or in part of shares of the Company's authorized but unissued
Common Stock or shares of the Company's authorized and issued Common Stock
reacquired by the Company and held in its treasury. If an option granted
under this Plan is surrendered or for any other reason ceases to be
exercisable in whole or in part, the shares which were subject to any such
option but as to which the option ceases to be exercisable shall again be
available for options to be granted under this Plan.

(b) The total number of shares of the Common Stock as to which
an option or options may be granted under this Plan to any one employee
shall not exceed 100,000 shares.

(c) No person to whom an option is granted under this Plan
shall receive options, exercisable for the first time by any individual
during any calendar year (under all plans of the Company and its
Subsidiaries), for shares, the fair market value of which (determined at the
time of grant of the options) exceeds $100,000.

5. STOCK OPTIONS.

<PAGE>

(a) OPTION PRICE. The price at which options may be granted under
the Plan and the effective date of such grant shall be determined as follows:

(1) The per share option price of the Common Stock subject
to each option shall be at least equal to the greater of (x) one hundred ten
(110%) percent of the fair market value of a share of Common Stock on the
date that the option is granted and (y) the initial public offering price
per share sold pursuant to the Registration Statement and Prospectus
filed in connection therewith.

For purposes of this Plan, fair market value of a share of
Common Stock shall be determined by reference to the last third party
sale within a one-month period prior to the date of grant, or if no such
third party sales, the last reported closing price of a share on any
national securities exchange upon which the shares of Common Stock are
listed (or the average of the closing bid and asked price or other applicable
published share quotation if the shares are not then traded on a national
securities exchange) on the trading day next preceding the date of the grant
or exercise of the option, as the case may be, or the last price at which
shares

<PAGE>

of Common Stock were sold or redeemed by the Company if no public
market or pink sheet share quotations then exist for the shares, whichever
is applicable.

(2) The Committee shall, after it approves the granting of
an option to an employee, cause the employee to be notified of such action.
The date on which the Committee approves the granting of an option
shall be considered the date on which such option is granted irrespective
of the date on which the employee is notified.

(b) EXERCISE OF OPTION. The right to purchase shares covered by any
option or options under this Plan shall be exercisable only in accordance
with the terms and conditions of the grant to such optionee as evidenced by a
stock option agreement in such form, not inconsistent with this Plan, as the
Committee shall approve from time to time. Options granted under the Plan
shall be exercised in the following manner:

(1) The right to purchase shares covered by any option
or options granted under this Plan shall not be exercisable until the
expiration of twelve months from the date such option is

<PAGE>

granted except in the event of the death or permanent and total disability
(within the meaning of Section 22(e)(3) of the Code) of the optionee within
such period, in which event such option or options shall be deemed
exercisable for purposes of Section 5(c)(2) hereof without regard to such
twelve-month period.

(2) The Committee may, in its discretion, provide that
such option or options may be exercised in whole or in part in
installments, cumulative or otherwise, for any period or periods of time
specified by the Committee of not less than twelve months nor more than
ten years from the date of the grant of the option. Subject to the
provisions of subdivision (b)(3) of this Section 5, that portion of an option
which is exercisable on an installment basis may not be exercised prior to
the expiration of the applicable installment period.

(3) If the optionee shall continue in the employ of the
Company during the whole of any period for which an installment of shares
shall have been allotted by the terms of any option granted such optionee
under this Plan, the option thereupon shall be exercisable with respect
to such shares in accordance with the terms and conditions of the grant
of such option to such optionee.

<PAGE>

(1) Each option and all rights and obligations thereunder shall,
subject to the provisions of subdivision (c)(2) of this Section 5, expire
on a date to be determined by the Committee, such date, however, in no
event to be later than ten years from the date on which the option is
granted.

(2)(i) In the event an optionee's employment with
the Company shall terminate as the result of any reason whatsoever other
than "for cause", then an option granted to such optionee shall, to the
extent then exercisable, be exercisable within three months after such
optionee ceases to be an employee of the Company. Following the
expiration of such three-month period, any option granted to such optionee
shall terminate and may no longer be exercised.

(ii) If the optionee dies or becomes permanently
and totally disabled (within the meaning of Section 22(e)(3) of the Code)
while in the employ of the Company, such option (without regard to any
installment limitations provided in Section 5(b)(2)) hereof may, within one
year after such optionee ceases to be an

<PAGE>

employee of the Company (or within such shorter period as may be specified in
the option by the Committee), be exercised by such optionee or the person or
persons to whom the optionee's rights under the option shall pass by will or
by the applicable laws of descent and distribution; provided, however, that
an option may not be exercised to any extent by any person after the
expiration of the option according to its terms.

(iii) In the event an optionee's employment with
the Company shall terminate as the result of any circumstance other
than those referred to above in subdivision (c)(2)(i) or (ii) of this
Section 5, then all options granted to such optionee under this Plan shall
terminate and no longer be exercisable as of the date such optionee ceases
to be an employee of the Company.

(iv) An optionee who is absent from work with the Company because
of such optionee's disability (other than as provided in subdivision
(c)(2)(ii) of this Section 5), or who is on leave of absence for the
purpose of serving in a military capacity the government of the country
in which the principal place of business of the optionee's employer is
located, or for such other purpose or reason as the Committee may
specifically approve, shall

<PAGE>

not during the period of any such absence be deemed, by virtue of such
absence alone, to have terminated such optionee's employment with the Company
except as the Committee may otherwise expressly provide. All rights which
such optionee would have had to exercise options granted hereunder will be
suspended during the period of such leave of absence and may be exercised
cumulatively by such optionee upon his return to the Company provided such
options are exercised within ten years after the grant thereof.

6. CAPITAL ADJUSTMENTS. The aggregate number of shares
of the Company's Common Stock subject to this Plan, the maximum number of
shares as to which options may be granted to any one optionee hereunder, and
the number of shares and the price per share subject to outstanding
options shall be appropriately adjusted for any increase or decrease in
the number of shares of Common Stock which the Company has issued resulting
from any stock split, stock dividend, combination of shares or any other
change, or any exchange for other securities or any reclassification,
reorganization, redesignation, recapitalization, or otherwise.

7. NONTRANSFERABILITY. An option granted under the Plan
may not be transferred except by will or the laws of descent and

<PAGE>

distribution and, during the lifetime of the employee to whom granted, may
be exercised only by such employee.

8. SECURITIES ACT OF 1933. Upon issuance of shares of the Company's
Common Stock hereunder, the recipient of such stock shall represent that the
shares are taken for investment and not resale and make such other
representations as may be necessary to qualify the issuance of the shares as
exempt from the Securities Act of 1933 and shall further represent that he or
she will not dispose of such shares in violation of the Securities Act of
1933. The Company reserves the right to place a legend on any stock
certificate issued pursuant to the Plan to assure compliance with this
Section 8. In the event that the Company shall nevertheless deem it necessary
to register under the Securities Act of 1933 or other applicable statutes any
shares with respect to which an option shall have been exercised, then the
Company shall take such action at its own expense before delivery of such
shares. In the event the shares of the Company shall be listed on any
national stock exchange at the time of the exercise of an option under this
Plan, then, whenever required, the Company shall register the shares with
respect to which such option is exercised under the

<PAGE>

Securities Exchange Act of 1934, and, whenever required, shall make prompt
application for the listing on such stock exchange.

9. NON-ALIENATION OF BENEFITS. No right or benefit under this Plan
shall be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber, or charge the same shall be void. No right or benefit
hereunder shall in any manner be liable for or subject to the debts,
contracts, liabilities, or torts of the person entitled to such benefits. If
any optionee should become bankrupt or attempt to anticipate, alienate, sell,
assign, pledge, encumber, or charge any right or benefit hereunder, then such
right or benefit shall, in the discretion of the Committee, cease and
terminate.

10. AMENDMENT, SUSPENSION, OR TERMINATION OF PLAN. The Board may at any
time suspend or terminate the Plan and may amend it from time to time in such
respects as the Board may deem advisable in order that options granted
thereunder shall conform to any change in the law, or in any other respect
which the Board may deem to be in the best interests of the Company;
provided, however, that (a) the Board shall not amend this Plan in any manner
which

<PAGE>

would have the effect of preventing options issued under this Plan from
being "incentive stock options" as defined in Section 422 of the Code and
(b) without the consent of a majority of the stockholders of the Company, no
such amendment shall, except as specified in Section 6 hereof, increase the
maximum number of shares for which options may be granted under this Plan. No
option may be granted during any suspension of, or after termination of the
Plan. No amendment, suspension of, or termination of this Plan shall, without
the optionee's consent, alter or impair any of the rights or obligations
under any option theretofore granted to her or him under this Plan.

11. CONTINUATION OF EMPLOYMENT. Neither this Plan nor any option granted
hereunder shall confer upon any employee any right to continue in the employ
of the Company or any Subsidiary, or limit in any respect the right of the
Company or any Subsidiary to terminate the employment of any employee at any
time.

12. EFFECTIVE DATE. The effective date ("Effective Date")
of this Plan shall be the date of consummation of the initial public
offering of the Common Stock of the Company, provided that if this Plan is
not approved by the holders of a majority of the

<PAGE>

outstanding shares of Common Stock of the Company within twelve months of the
Effective Date, then the Plan shall terminate and any options granted
hereunder shall be void and of no further force or effect.

13. TERMINATION DATE. Unless this Plan shall have been previously
terminated by the Board, this Plan shall terminate ten years from the
Effective Date, except as to options theretofore granted and outstanding
under the Plan at that date, and no option shall be granted after that date.

<PAGE>
EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Leading Edge Packaging,
Inc. on Form S-1 of our report dated April 30, 1996, appearing in the
Prospectus, which is 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
October 9, 1996