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SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[ ] Definitive Proxy Statement RULE 14A-6 (E) (2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11 (c) or (S)240.14a-12
LEADING EDGE PACKAGING, INC.
___________________________________________________
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
______________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
______________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________________________________
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(4) Proposed maximum aggregate value of transaction:
_______________________________________________________________________
(5) Total fee paid:
________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
of the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
Notes:
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PRELIMINARY INFORMATION STATEMENT
[Logo]
350 Fifth Avenue
Suite 3922
New York, New York 10118
PRELIMINARY INFORMATION STATEMENT
This information statement is being mailed to the stockholders of
Leading Edge Packaging, Inc. (the "Company") commencing on or about March 16,
1998, to all stockholders of record on February 27, 1998, in connection with
the prior approval on March 6, 1998, by the board of directors of the Company
of the corporate action referred to below and its subsequent adoption, also
on March 6, 1998, by the majority stockholder of the Company, Chung Hwa
Development Holdings Limited (the "Majority Stockholder"). Accordingly, all
necessary corporate approvals in connection with the matters referred to
herein have been obtained, and this Information Statement is furnished solely
for the purpose of informing stockholders, in the manner required under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), of these
transactions before they take effect. The total number of shares of the
Common Stock outstanding on February 27, 1998 is 3,312,500.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
The Company, as authorized by the necessary approvals of the board of
directors and the Company's Majority Stockholder, has approved the adoption
of an amendment (the "Amendment") to the Company's Certificate of
Incorporation (the "Certificate") to increase the Company's authorized Common
Stock, par value $.01 per share ("Common Stock"), from 5,000,000 shares to
8,000,000 shares. Specifically, the first sentence of the FOURTH Article of
the Certificate will be amended to read as follows: The total number of
shares of common stock which this corporation is authorized to issue is eight
million (8,000,000) shares, par value $.01 per share. The Amendment is
scheduled to take place, on or about April 6, 1998, but no earlier than 20
days from the date this information statement is first sent to the Company's
stockholders.
PURPOSE OF THE AMENDMENT
The Amendment was adopted to facilitate the issuance of 2,250,000 shares
of Common Stock to the Majority Stockholder in exchange for the transfer to
the Company by the Majority Stockholder of all of the outstanding share
capital of Justrite Investments Limited ("Justrite"), pursuant to a certain
Share Exchange Agreement dated January 23, 1998 (the "Agreement"), by and
between the Company and the Majority Stockholder. Prior to the Exchange, as
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contemplated in the Agreement, Justrite is a wholly-owned subsidiary of the
Majority Stockholder.
Justrite is the parent corporation of Rich City International Packaging
Limited ("Rich City"), the Company's supplier of packaging products, which
the Company distributes in North America. Rich City distributes its
packaging products in other parts of the world, including Europe and Asia.
Justrite also owns 100% of Breakspear Limited, a British Virgin Islands
company, which in turn holds a 60% interest in a joint venture in the
People's Republic of China. Rich City also has interests in two joint
ventures in China. The Company believes that the acquisition will
enable it to consolidate the manufacture and distribution of its packaging
products and to expand its sales into additional territories.
The Company believes that the Exchange will provide it with direct
control over the management team and production facilities in China and
access to a greater market share for its packaging products in Europe and
Asia, formerly territories of Rich City. There can be no assurance, however,
that the Exchange will produce the anticipated results for the Company. In
addition, under a certain Assignment and Distribution Agreement, dated
September 23, 1997, by and between the Company and Rich City, the Company
would have been required to pay to Rich City a royalty in the amount of
$2,000,000 by September 23, 1999. Consummation of the Exchange will
eliminate the royalty requirement specified in the Assignment and
Distribution Agreement.
BACKGROUND
Prior to November 3, 1997, Rich City owned 1,875,000 shares of the
Company's common stock, constituting approximately 57% of the issued and
outstanding shares of common stock. On November 3, 1997, Rich City
transferred all of its shares in the Company to the Majority Stockholder,
making it the Company's direct, rather than indirect, parent corporation. As
a result of the Exchange, the Company will become the majority owner of
Justrite and the Subsidiaries, including Rich City, its former parent.
THE SHARE EXCHANGE AGREEMENT
The Agreement provides that the Company is to acquire all of the
outstanding capital stock of Justrite in exchange for the issuance to the
Majority Stockholder of 2,250,000 shares of the Common Stock, par value $.01
per share. Under the Agreement, the closing of the Exchange is to take
place on March 13, 1998. The Amendment and the issuance of the Common Stock
to the Majority Stockholder, however, will take place on or about April 6,
1998, or 20 days from the date of mailing of this Information Statement to
the Company's stockholders.
Under the Agreement, the Exchange is contingent upon the approval by The
Stock Exchange of Hong Kong, approval by the shareholders of the Majority
Stockholder at an
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extraordinary general meeting, approval by the boards of directors of both
the Majority Stockholder and the Company, completion of financial due
diligence by the Company with respect to Justrite and the Subsidiaries based
upon a review of the financial statements of Justrite and the Subsidiaries by
the Company's independent auditors.
The Agreement contains certain warranties by the Majority Stockholder
with respect to Justrite and the Subsidiaries. The Agreement also limits the
liability of the Majority Stockholder arising under the Agreement to no more
than US$13,500,000. The Agreement also provides for the assumption by the
Company of any guarantees and letters of undertaking by the Majority
Stockholder for the benefit of Justrite or the Subsidiaries.
The 2,250,000 shares of Common Stock issuable to the Majority
Stockholder under the Agreement have been valued by the Company and the
Majority Stockholder at $6.00 per share, as specified in the Agreement, or
US$13,500,000 in the aggregate. The Majority Stockholder undertakes,
pursuant to the Agreement, that in the event the audited net asset value of
Justrite for the year ending March 31, 1998 as reflected in its audited
report and financial statements is less than US$4,500,000, the Majority
Stockholder with pay to the Company, on a US-dollar for US-dollar basis, the
amount of any shortfall.
The foregoing discussion contains forward-looking statements which are
inherently subject to risks and uncertainties.
MATERIAL INCORPORATED BY REFERENCE
The audited balance sheets of the Company as of March 31, 1997 and 1996
and the related statements of income, shareholders' equity and cash flows for
the three years ended March 31, 1997, are incorporated herein by reference to
the Company's Annual Report on Form 10-K for the fiscal year ended March 31,
1997 (the "Annual Report"). The Company's unaudited balance sheets as of
June 30, September 30 and December 31, 1997 and the related statements of
income, stockholders' equity and cash flows for each of the three month
periods ended June 30, September 30 and December 31, 1997, are incorporated
herein by reference to the Company's Quarterly Reports on Form 10-Q for the
those respective periods.
Information required pursuant to Item 13(a) of Schedule 14A and
specified in Items 302 and 303 of Regulation S-K is hereby incorporated by
reference to the Annual Report and each of the Quarterly Reports listed above.
March 6, 1998
By Order of the Board of Directors
CASEY K. TJANG, Secretary
