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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g)
of the Securities Exchange Act of 1934
Premier Classic Art, Inc.
(Exact name of registrant as specified in its charter)
Delaware 22-3680581
(State or other jurisdiction(I.R.S. Employer Identification No.)
of incorporation or organization)
1158 Staffler Road,
Bridgewater, New Jersey 08807
(Address of registrant's principal executive offices) (Zip Code)
(908) 526-7388
(Registrant's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of each exchange
Title of each class to be so registered: on which each class is to be registered:
- - - ------------------------------------------ -----------------------------------------
<S> <C>
None None
</TABLE>
Securities to be registered under Section 12(g) of the Act:
Common Stock,
par value $.0001
Copies to: Gerald A. Adler, Esquire
Bondy & Schloss LLP
6 East 43rd Street
New York, New York 10017-4656
Telephone No. (212)-661-3535
Fax No. (212) 972-1677
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Index to Form 10-SB Registration Statement
<TABLE>
<CAPTION>
Item Number and Caption Page
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PART I
1. Description of Business ...............................................................
2. Management's Discussion and Analysis of Financial Condition and Results of Operations .
3. Description of Property ...............................................................
4. Security Ownership of Certain Beneficial Owners and Management ........................
5. Management ............................................................................
6. Executive Compensation ................................................................
7. Certain Relationships and Related Transactions ........................................
8. Description of Securities .............................................................
PART II
1. Market For Common Equity and Related Shareholder Matters ..............................
2. Legal Proceedings .....................................................................
3. Changes in and Disagreements with Accountants .........................................
4. Recent Sales of Unregistered Securities ...............................................
5. Indemnification of Officers and Directors .............................................
PART F/S
Financial Statements .....................................................................
PART III
1. Index to Exhibits .....................................................................
2. Description of Exhibits ...............................................................
Signatures ...............................................................................
</TABLE>
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PART I
DESCRIPTION OF BUSINESS
General Development of Business
Premier Classic Art, Inc. (the "Company") was incorporated as Pet-Con
Industries, Inc. in the State of Delaware on June 14, 1991. The Company
previously manufactured recyclable containers and bottles for sale to private
grocery product manufacturers and food packers. The Company discontinued these
operations in June 1995 and had no operating activities from then until
September 1999.
On September 2, 1999, the Company purchased all of the outstanding shares
of stock of Cool Classic Incorporated, a Nevada corporation, in exchange for
3,069,788 shares of the Company's common stock. Cool Classic Incorporated is
the owner of 400,000 original, hand-painted animation production cels, which
the Company now plans to market and sell.
Description of Business
Having acquired the outstanding stock of Cool Classic Incorporated with
its collection of 400,000 animation production cels, the Company intends to
market and sell these cels to the public through its website as well as through
art galleries, department type stores, other retail outlets and catalogues.
Pursuant to a Sub-Lease and Assembly Agreement, dated as of September
1999, by and between the Company and Royal Animated Art, Inc., a California
corporation ("Royal"), the Company stores its collection of cels in a warehouse
leased by Royal from a third party. In addition, Royal has agreed to provide
services such as cleaning, sorting, cataloguing, matching with backgrounds,
matting and framing (as requested by the Company) as well as generally
preparing the cels for market. The Company is to pay Royal $1,000 per month for
the warehouse space as well as out of pocket costs plus 15% for the services
rendered to the Company.
In addition to the marketing and sale of its own collection of cels, the
Company has entered into a Distribution Agreement, dated September 2, 1999,
with Royal. The agreement is for a three year term, subject to renewal As part
of the agreement, Royal grants the Company the non-exclusive right to purchase
and market reproductions of certain animation and comic strip images and
characters, including all animation art and comic strip lithographs, which
Royal has or acquires reproduction rights to. These rights are subject to any
restrictions or limitations contained in agreements under which Royal acquires
its rights and to the approval of Royal over whether and how many reproductions
of each particular piece of artwork should be sold to the Company. The Company
is to pay Royal a percentage of Royal's suggested retail price, depending on
whether the Company sells directly to the ultimate consumer (50%) or to
wholesalers, distributors, retailers and/or other middlemen (25%).
Animation Cels
The term "cel" is used to describe the basic component of most types of
animation art. In its strictest sense, a cel is a plastic sheet, either
cellulose nitrate or cellulose acetate, on which animated characters are
painted. In practice, the term cel has come to mean that plastic sheet in
combination with the outline and coloring of a character, object or special
effect. Outlines can be either hand-inked or Xerographically transferred to the
sheet of plastic. Those outlines are then filled with color, either by
hand-painting or a serigraphic process, to complete the cel.
The Company's cel collection includes a combination of 12 field cels
(approximately 12" x 10" in size) and pan cels (approximately 36" x 10"). The
cels are selected from and were used in the production of Real
Ghostbusters/Slimer, Ewoks (Star Wars), He-Man, Master of the Universe, She-Ra,
Princess of Power, Bravestar, Flash Gordon, Shelly Duvall's Bedtime Stories,
Beethoven, Back to the Future and others.
Original Production Cels
These cels are hand-painted and have actually been used in the making of
animated films. They can have either Xerographed or hand-inked outlines and are
hand-painted at the studio. Each animation film is made of
1
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thousands of individual hand-painted cels. They are filmed in sequence to
create the illusion of motion. Many original production cels have been either
lost or destroyed through the years, which enhances their value as collectible
art. In addition each cel is a one-of-a-kind piece of art, and this rarity also
enhances its value. Because they were created to make an actual cartoon, each
cel is a component part of a larger movement. Different cels from the same
scene may be more or less desirable depending on a variety of factors such as
size, profile, and expression of the character, any damage to inking or paint
and overall visual appearance.
The Making of a Production Cel
The process begins when a storyboard is created by a talented animator,
who with the film director, determines the extent of the background to be
shown, the size of the characters and props to be used in each scene. The
animator makes a sketch from what will become each of approximately 16 frames
per foot of film.
Next, an outlined ink drawing is made of each of the sketches. This
outline is on a sheet of clear celluloid acetate. Each and every inked outline
is turned over to a painter and, by hand, the brilliant colors are applied with
special paints.
Once each cel is hand painted and the foregrounds and backgrounds are
complete, the artwork is ready for photography. Using a multiplane camera, the
foreground, animation plane and the background are meticulously arranged and
photographed.
Sericels
Sometimes called serigraph cels, seri-cels re-create the look and feel of
the original art by means of Serigraphy, a fine art process. The serigraphy
process involves silk-screening each individual color to the cel, one at a
time. Every distinct shade is a separate screen and a separate pass in the
procedure. As a result of this fine art process, each color is flawlessly
reproduced. Sericels are also created in limited quantities, typically 2,500 to
5,000 peices. Because of their larger edition size, sericels are the most
affordable type of animation art and, the Company believes, ideal for the
beginning collector.
Production of Sericels
To produce a serigraph cel, or sericel, a hand cut, master screen is
prepared for each individual color of the original artwork. To produce this
Serigraph Cel, or Seri-Cel, a hand cut, master screen is prepared for each
individual color of the original artwork. The serigrapher meticulously applies
each color separately one screen at a time in perfect registration. The result
is an original work of art. The images chosen for a sericel are carefully
selected from the studio archives. Each sericel is limited in production to
only a certain number of pieces. After each edition size is achieved, the
screens used to create the art are destroyed, thus insuring their limited
status.
Industry and Competition
The Company believes that the collection of animation production cels is a
rapidly expanding pastime with more and more people every day discovering the
enjoyment and appreciating the hand-craftsmanship of these timeless works of
art. The Company is aware of two major distributors of animation cels, The Walt
Disney Co. (through its Walt Disney Art Classics division) and Time Warner Inc.
(through its Warner Bros. division) in addition to several distributors of
lesser stature. These distributors have significantly greater resources than
the Company. In addition, many collectors and distributors of cels have
established a presence on the Internet.
Sales and Marketing
The Company has opened a website at www.premierclassicart.com through
which it offers for sale a selection of its animation cels. The website
receives an average of approximately 695 hits per week.
The Company will also market the cels through art galleries, department
stores, other retail outlets and catalogues.
2
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Seasonality
The Company's management believes that the demand for animation cels is
not subject to seasonal fluctuations.
Employees
The Company currently employs one executive and, if its revenue increases,
management expects that it will require one to three additional employees.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND PLAN OF OPERATION
Plan of Operation
The Company plans to continue marketing and selling its collection of cels
over the internet and through art galleries, department stores, other retail
outlets and catalogues. The Company anticipates that it will take more than
five years for it to liquidate the collection so as to maximize its value and
to take advantage of opportunities to sell pieces when possible. The Company
has received no revenues from cels to date. An artistic staff employed by the
Company is in the process of preparing additional cels for presentation to the
public. The Company has 3,000 cels ready for presentation and distribution and
expects an additional 25,000 cels to be ready for distribution by January 31,
2000.
The Company has had its cel collection independently appraised at between
$12 and $20 million by Appraisals by Ashby. However, the Company may not be
able to sell its animation cels at a prices commensurate with the appraised
value of the collection, and management cannot be certain what, if any,
revenues it will generate.
PROPERTY
On September 3, 1999, the Company entered into a Sublease and Assembly
Agreement with Royal Animated Art, Inc. of California. The agreement provides
for the Company to pay Royal Animated Art, Inc. $1,000 per month for the use of
space in a warehouse facility in order to store the Company's collection of
cels. The agreement also provides for services to be performed by Royal in
connection with the cels and payment by the Company of Royal's costs in
connection with such services plus 15% of it overhead costs.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the name and address of each officer and
director of the Company and each person who owns beneficially more than five
percent of the Common Stock of the Company, and the number of shares owned by
each such person and by all officers and directors as a group:
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner Amount and Nature of Ownership Approximate % of Class
- - - ------------------------------------------------ -------------------------------- -----------------------
<S> <C> <C>
Charles Trapp, Chairman, Chief Executive
Officer and President ......................... 1,158,845 15.2
Louis Pistilli, Secretary and Director ......... 125,000 1.6
James E. Cheatham, Director .................... 124,590 1.6
Joe Cool Collectibles, Inc. .................... 3,069,788 40.3
Giltner Stephens ...............................
Directors and Officers as a Group .............. 1,408,435 18.4
</TABLE>
3
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MANAGEMENT
Name Age Company Position
- - - ---------------------------- ----- ----------------------------------
Charles F. Trapp ........... 50 Chairman, Chief Executive Officer
and President
Louis A. Pistilli .......... 45 Director
James E. Cheatham .......... 63 Director
Charles F. Trapp is a certified public accountant and has served as the
Company's Chairman, Chief Executive Officer and President since September 1999.
Prior to that time, he was President of Somerset Kensington Capital Co. Inc., a
Company involved in financial restructuring and turnaround management. Mr.
Trapp was Vice President of Finance for A.W. Computer Systems, Inc. from
September 1996 to February 1999. A.W. filed Chapter 11 in May 1998 and
converted to Chapter 7 in February 1999.
Louis A. Pistilli is a certified public accountant and has been the
Secretary and a director of the Company since September 1999. He has been the
managing partner of the accounting firm of Pistilli & Romm LLC since January
1999. From January 1990 to December 1998, Mr. Pistilli served as managing
partner of the accounting firm of Pistilli & Company.
James E. Cheatham has been a director of the Company since September 1999.
Since September 1998, Mr. Cheatham has served as President of Giftrunner.com,
Inc., an Internet gift shopping website. From December 1995 to August 1998, he
served as President of Lionshare Group, a financial consulting company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Herman Rush, who owns an option to purchase 266,667 shares of the
Company's issued and outstanding common stock at $1.00 per share which expires
September 2002, is the President of Royal Animated Art, Inc. The Company has
entered into a Sub-Lease and Assembly Agreement, as well as a Distribution
Agreement, with Royal Animated Art, Inc.
Joe Cool Collectibles owns 3,069,788 shares of the Company's common stock.
Mr. Giltner Stephens owns 350,000 shares of the Company's common stock, a
warrant to purchase 400,000 shares at $1.00 per share which expires in
September 2002 and a one year $775,000 convertible note due September 2, 2002
and convertible into 250,000 shares at $3.10 per share.
In September 1999, the Company issued to Mr. Louis Pistilli 125,000 shares
in the aggregate (75,000 at $.001 per share for services rendered and 50,000 at
$.10 per share) pursuant to a 504 offering.
In September 1999, the Company issued to Charles F. Trapp 1,158,845 shares
of common stock at $.001 per share in exchange for services rendered.
DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue 50,000,000 shares of common stock,
$.001 par value, of which 7,643,316 shares are issued and outstanding. The
holders of common stock have one vote per share. None of the shares have
preemptive or cumulative voting rights, have any rights of redemption or are
liable for assessments or further calls. None of the shares have any conversion
rights. The holders of common stock are entitled to dividends, when and as
declared by the Board of Directors from funds legally available therefor. Upon
liquidations of the Company the holders of common stock are entitled to share
pro rata in any distribution to shareholders.
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Preferred Stock
The Company is authorized to issue 10,000,000 shares of Series A
cumulative convertible preferred stock, $.002 par value of which there are
216,800 shares issued and outstanding. The Series A cumulative convertible note
preferred stock is convertible into 48,780 shares of common stock.
Colonial Stock Transfer, 455 East 400 So. #100, Salt Lake City, Utah 84111
is the transfer agent and registrar for the Company's common stock and
preferred stock.
Shares Eligible for Future Sale
The Company has 7,643,316 shares of common stock outstanding, but, of
these shares, only 1,657,109 shares are freely tradable. All of the remaining
shares of common stock are considered "restricted securities" and in the
future, may be sold only in compliance with rule 144 or in an exempt
transaction under the Securities Act of 1933 (the "Act") unless registered
under the Act (the "restricted shares").
In general, under Rule 144 as currently in effect, subject to the
satisfaction of certain conditions, a person, including an affiliate of the
Company (or persons whose shares are aggregated), who has owned restricted
shares of common stcok beneficially for at least one year is entitled to sell,
within any three month period, a number of shares that does not exceed the
greater of 1% of the total number of outstanding shares pf the same class or,
if the common stock is quoted on a national quotation system, the average
weekly trading volume during the four calendar weeks preceding the sale. A
person who has not been an affiliate of the Company for at least the three
months preceding the sale and who has beneficially owned shares of common stock
for at least two years is entitled to sell such shares under Rule 144 without
regard to any of the limitations described above.
Warrants
The Company has outstanding warrants to purchase 666,666 shares of its
common stock all at an exercise price of $1.00 per share. The warrants are for
a term of three years and are exercisable beginning on September 1999.
5
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PART II
MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
The Company's securities trade are traded on the OTC Bulletin Board and in
the over-the-counter market "pink sheets". The Company's trading symbol is
"PART". Over-the-counter market quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commissions and may not represent actual
transactions. The following sets forth the range of high and low bid
information for the quarterly periods as reported on America Online:
High Low
------ ------
1997: (No quotations available
for 1997.)
1998: 1st Quarter .......... 0 0
2nd Quarter .......... 0 0
3rd Quarter .......... .01 .01
4th Quarter .......... 0 0
1999: 1st Quarter .......... 0 0
2nd Quarter .......... 0 0
3rd Quarter .......... 61/2 0
Holders
As of December 30, 1999, the number of holders of record of common stock,
excluding the number of beneficial owners whose securities are held in street
name was approximately 370.
Dividend Policy
The Company does not anticipate paying any cash dividends on its common
stock in the foreseeable future because it intends to retain its earnings to
finance the expansion of its business. Thereafter, the declaration of dividends
will be determined by the Board of Directors in light of conditions then
existing, including, without limitation, the Company's financial condition,
capital requirements and business condition.
The Company is prohibited from paying cash dividends on the common stock
until the preferred stock is converted into common stock or all preferred
dividends in arrears are brought current.
LEGAL PROCEEDINGS
The Company is not party to any material pending legal proceedings and has
no knowledge that any such proceedings are threatened.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
RECENT SALES OF UNREGISTERED SECURITIES
The following paragraphs set forth certain information with respect to all
securities sold by the Company within the past three years without registration
under the Securities Act of 1933, as amended (the "Securities Act"). The
information includes the names of the purchasers, the date of issuance, the
title and number of secur-ities sold and the consideration received by the
company for the issuance of these shares.
In September 1999, the Company issued to Charles F. Trapp 1,158,845 shares
of common stock at $.001 per share in exchange for services rendered.
In September 1999, the Company issued to Mr. Louis Pistilli (75,000
shares), Mr Giltner Stevens (100,000 shares), Mr. Michael Salerno (306,980
shares), Mr. Charles McLaughlin (76,744 shares) and Royal Trading Ltd (376,049
shares) each at $.001 per share and for services rendered.
In September 1999, the Company issued 3,069,788 shares of common stock to
Joe Cool Collectibles, Inc. in exchange for all the outstanding stock of Cool
Classics, Inc.
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In September 1999 the company issued a warrant, exercisable 13 months
after issuance to Giltner B. Stevens to purchase 400,000 shares of the
Company's common stock at $1.50 per share.
The following individuals and/or entities purchsed the following number of
shares of common stock of the company at $.10 per share pursuant to Rule 504 of
Regulation D of the Securities Act of 1933, as amended which offering closed on
September 2, 1999.
SHAREHOLDERS NUMBER OF SHARES
Gerald A. Adler 41,660
Juan M. Camprubi Sala 250,000
John Catterson 41,670
Dauns Management, Inc. 150,000
Anthony DiNota 250,000
Edward David 250,000
Betty Jane Figlia 50,000
Joel S. Forman 41,660
Roslyn A. Haber 41,670
Mark Harmon 41,670
John P. Kneafsey 10,000
M & L Financial, Inc. 34,000
Charles McLaughlin 80,000
Jose Maria Losa 250,000
Carolina Lugo 336,000
Louis A. Pistilli 50,000
Joseph Rosenthal 41,670
Giltner B. Stevens 250,000
John J. Villa 20,000
West Valley Financial Management, Inc. 20,000
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PREMIER CLASSIC ART, INC.
INDEX TO FINANCIAL STATEMENTS
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Page
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Independent Auditors' Report ............................................................. 1 - 2
Financial Statements:
Balance Sheets, November 30, 1999, May 31, 1999 and 1998 .............................. 3
Statement of Operations, Six Months Ended November 30, 1999 and 1998 and the Years
Ended May 31, 1999, 1998 and 1997 .................................................... 4
Statement of Stockholders' Equity (Deficiency) for the Six Months Ended November 30, 1999,
and 1998 and the Years Ended May 31, 1999, 1998 and 1997 ................................ 5
Statement of Cash Flows, for the Six Months Ended November 30, 1999 and 1998 and
the Years Ended May 31, 1999, 1998 and 1997 .......................................... 6
Notes to Financial Statements ............................................................ 7 - 14
</TABLE>
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[Wiener, Goodman & Company, P.C. Letterhead]
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Premier Classic Art, Inc.
We have audited the accompanying balance sheets of Premier Classic Art,
Inc.(the "Company") as of November 30, 1999, May 31, 1999 and May 31, 1998, and
the related statements of operations, stockholders' equity (deficiency), and
cash flows for the six months ended November 30, 1999 and 1998 and the years
ended May 31, 1999, 1998 and 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements referred to above present
fairly, in all material respects, the financial position of Premier Classic
Art, Inc. at November 30, 1999, May 31, 1999 and May 31, 1998 and the results
of their operations and their cash flows for the six months ended November 30,
1999 and 1998 and the years ended May 31, 1999, 1998 and 1997 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As more fully explained in Note 1 of
Notes to Financial Statements, the Company needs to obtain additional financing
and sell its inventory to liquidate its debts that are in default and support
the Company's overhead. These uncertainties raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.
/s/ Wiener, Goodman & Company, P.C.
- - - -----------------------------
WIENER, GOODMAN & COMPANY, P.C.
Certified Public Accountants
Eatontown, New Jersey
December 28, 1999
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PREMIER CLASSIC ART, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
November
30, 1999 May 31, 1999 May 31, 1998
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<S> <C> <C> <C>
ASSETS
Current Assets:
Cash .................................................. $ 217,758 $ -- $ --
Marketable Securities ................................. 45,938 -- --
Prepaid expenses ...................................... 459,920 -- --
Inventories ........................................... 5,372,640 -- --
------------ ------------ ------------
Total Current Assets ................................ 6,096,256 -- --
Goodwill-net .......................................... 126,276 -- --
Other assets .......................................... 5,000 -- --
------------ ------------ ------------
TOTAL ASSETS ........................................ $ 6,227,532 $ -- $ --
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities:
Short-term debt ........................................ $ 775,000 $ -- $ --
Current portion of long-term debt ...................... 43,725 217,370 217,370
Accounts payable ....................................... 6,330 46,263 46,263
Accrued expenses ....................................... 76,739 151,408 128,008
------------ ------------ ------------
Total Current Liabilities ........................... 901,794 415,041 391,641
------------ ------------ ------------
Long-term debt ........................................ -- -- 88,630
------------ ------------ ------------
Total Liabilities ................................... 901,794 415,041 480,271
------------ ------------ ------------
Commitments and Contingencies
Stockholders' Equity (Deficiency):
Series A cumulative convertible preferred stock - 8%
cumulative, $.002 par value, 10,000,000 shares autho-
rized; 152,800 issued and outstanding at November
30, 1999, 256,800 issued and outstanding at May 31,
1999 and 1998 ....................................... 306 514 514
Common stock - $.001 par value, 50,000,000 shares
authorized;7,640,166 issued and outstanding at
November 30, 1999, 75,410 issued and outstanding at
May 31, 1999 and 1998 ............................... 7,640 75 75
Additional paid-in capital ............................ 6,769,823 917,366 828,736
Cumulative other comprehensive (loss) ................. (869) -- --
Deficit ............................................... (1,451,162) (1,332,996) (1,309,596)
------------ ------------ ------------
Total Stockholders' Equity (Deficiency) ............. 5,325,738 (415,041) (480,271)
------------ ------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY) ................................ $ 6,227,532 $ -- $ --
============ ============ ============
</TABLE>
See notes to financial statements.
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PREMIER CLASSIC ART, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended Year Ended
November 30, May 31,
-------------------------------- ------------------------------------------------
1999 1998 1999 1998 1997
--------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Cost and Expenses:
Selling, general and
administrative ............ $ 390,301 $ -- $ -- $ -- $ --
----------- ---------- ---------- ---------- ----------
Loss from operations ......... 390,301 -- -- -- --
Other expense
Interest expense ............ 33,121 11,700 23,400 23,400 23,400
----------- ---------- ---------- ---------- ----------
Total other expense .......... 33,121 11,700 23,400 23,400 23,400
----------- ---------- ---------- ---------- ----------
Loss before income taxes and
extraordinary gain .......... (423,422) (11,700) (23,400) (23,400) (23,400)
Income tax provision ......... -- -- -- -- --
----------- ---------- ---------- ---------- ----------
Loss before extraordinary
gain ........................ (423,422) (11,700) (23,400) (23,400) (23,400)
Extraordinary gain on extin-
guishment of debt ........... 305,256 -- -- -- --
----------- ---------- ---------- ---------- ----------
Net (loss) ................... $ (118,166) $ (11,700) $ (23,400) $ (23,400) $ (23,400)
=========== ========== ========== ========== ==========
Net (loss) per common share-
basic and diluted ........... $ (0.13) $ (0.16) $ (0.31) $ (0.31) $ (0.31)
Extraordinary gain on extin-
guishment of debt ........... 0.09 -- -- -- --
----------- ---------- ---------- ---------- ----------
Net earnings (loss) per com-
mon share-basic and
diluted ..................... $ (0.04) $ (0.16) $ (0.31) $ (0.31) $ (0.31)
=========== ========== ========== ========== ==========
Weighted average of com-
mon shares outstanding --
basic and diluted ........... 3,437,212 75,410 75,410 75,410 75,410
=========== ========== ========== ========== ==========
</TABLE>
See notes to financial statements.
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PREMIER CLASSIC ART, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
<TABLE>
<CAPTION>
Comprehensive
Total (loss) Deficit
-------------- --------------- -----------------
<S> <C> <C> <C>
Balance June 1, 1997 ................. $ (456,871) $ (1,286,196)
Retroactive effect of 1-for-50
reverse stock split effective
September 1, 1999 ..................
Net (loss) .......................... (23,400) (23,400)
----------- -------------
Balance, May 31, 1998 ................ (480,271) (1,309,596)
Capitalized debt .................... 88,630 --
Net (loss) .......................... (23,400) (23,400)
----------- -------------
Balance, May 31, 1999 ................ (415,041) (1,332,996)
Sale of common stock (at $.12
per share) ......................... 15,000
Issuance of stock to repay
accounts payable (valued at
$.10 per share) .................... 1
Issuance of stock to repay debt
and accrued interest (valued at
$.10 per share) .................... 2
Conversion of preferred stock to
common stock ....................... --
Capitalized debt .................... 38,319
Issuance of common stock for
services (valued at $.10 per
share) ............................. 209,362
Issuance of common stock in
connection with acquisition
(valued at $1.75 per share) ........ 5,372,130
Issuance of common stock for
services (valued at $.10 per
share) ............................. 1,400
Sale of common stock (at $.10
per share) ......................... 223,600
Conversion of preferred stock to
common stock .......................
Net unrealized loss on marketable
securities ......................... (869) $ (869)
Net income .......................... (118,166) (118,166) (118,166)
----------
$ (119,035)
----------
Balance, November 30, 1999 ........... $ 5,325,738 $ -- $ (1,451,162)
=========== ========== =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Series A
Preferred Stock Common Stock
Net unrealized ------------------------ ---------------------------
(loss) on market- Shares Par Shares Par
able securities Outstanding Value Outstanding Value
------------------- ------------- --------- --------------- ----------
<S> <C> <C> <C> <C> <C>
Balance June 1, 1997 ................. 256,800 $ 514 3,770,521 $ 3,770
Retroactive effect of 1-for-50
reverse stock split effective
September 1, 1999 .................. (3,695,111) (3,695)
Net (loss) ..........................
Balance, May 31, 1998 ................ 256,800 514 75,410 75
Capitalized debt .................... -- --
Net (loss) .......................... -- --
------- ----------
Balance, May 31, 1999 ................ 256,800 514 75,410 75
Sale of common stock (at $.12
per share) ......................... 124,590 125
Issuance of stock to repay
accounts payable (valued at
$.10 per share) .................... 925 1
Issuance of stock to repay debt
and accrued interest (valued at
$.10 per share) .................... 2,360 2
Conversion of preferred stock to
common stock ....................... (40,000) (80) 9,000 9
Capitalized debt ....................
Issuance of common stock for
services (valued at $.10 per
share) ............................. 2,093,618 2,094
Issuance of common stock in
connection with acquisition
(valued at $1.75 per share) ........ 3,069,788 3,070
Issuance of common stock for
services (valued at $.10 per
share) ............................. 14,000 14
Sale of common stock (at $.10
per share) ......................... 2,236,000 2,236
Conversion of preferred stock to
common stock ....................... (64,000) (128) 14,475 14
Net unrealized loss on marketable
securities ......................... (869)
Net income ..........................
Balance, November 30, 1999 ........... $ (869) 152,800 $ 306 7,640,166 $ 7,640
======= ======= ====== ========== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Additional
Paid-In
Capital
--------------
<S> <C>
Balance June 1, 1997 ................. $ 825,041
Retroactive effect of 1-for-50
reverse stock split effective
September 1, 1999 .................. 3,695
Net (loss) ..........................
Balance, May 31, 1998 ................ 828,736
Capitalized debt .................... 88,630
Net (loss) .......................... --
-----------
Balance, May 31, 1999 ................ 917,366
Sale of common stock (at $.12
per share) ......................... 14,875
Issuance of stock to repay
accounts payable (valued at
$.10 per share) ....................
Issuance of stock to repay debt
and accrued interest (valued at
$.10 per share) ....................
Conversion of preferred stock to
common stock ....................... 71
Capitalized debt .................... 38,319
Issuance of common stock for
services (valued at $.10 per
share) ............................. 207,268
Issuance of common stock in
connection with acquisition
(valued at $1.75 per share) ........ 5,369,060
Issuance of common stock for
services (valued at $.10 per
share) ............................. 1,386
Sale of common stock (at $.10
per share) ......................... 221,364
Conversion of preferred stock to
common stock ....................... 114
Net unrealized loss on marketable
securities .........................
Net income ..........................
Balance, November 30, 1999 ........... $ 6,769,823
===========
</TABLE>
See notes to the financial statements.
<PAGE>
PREMIER CLASSIC ART, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended Year Ended
November 30, May 31,
------------------------------ ----------------------------------------------
1999 1998 1999 1998 1997
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) ............................ $ (118,166) $ (11,700) $ (23,400) $ (23,400) $ (23,400)
Adjustments to reconcile net income to
cash provided by operating activities:
Common stock issued for services ........ 3,494
Depreciation and amortization ........... 43,924
Extraordinary gain on extinguish-
ment of debt ........................... (305,256)
Non-cash compensation expense ........... 207,268
Changes in operating assets and liabili-
ties:
(Increase) in marketable securities ..... (46,807)
(Increase) in security deposits ......... (5,000)
(Increase) in prepaid expenses .......... (459,920)
Increase in accounts payable ............ 6,330
Increase in accrued expenses ............ 46,604 11,700 23,400 23,400 23,400
----------- ---------- ---------- ---------- ----------
Net Cash Used in Operating Activi-
ties ................................... (627,529) -- -- -- --
----------- ---------- ---------- ---------- ----------
Cash flows from investing activities:
Payment for acquisition ...................... (166,813) -- -- -- --
----------- ---------- ---------- ---------- ----------
Cash flows from financing activities:
Proceeds from sale of common stock ........... 238,600 -- -- -- --
Proceeds from short term borrowings .......... 775,000 -- -- -- --
Payments of short term borrowings ............ (1,500) -- -- -- --
----------- ---------- ---------- ---------- ----------
Net Cash Provided by Financing
Activities ............................. 1,012,100 -- -- -- --
----------- ---------- ---------- ---------- ----------
Net increase in cash .......................... 217,758 -- -- -- --
Cash -- beginning of year ..................... -- -- -- -- --
----------- ---------- ---------- ---------- ----------
Cash -- end of year ........................... $ 217,758 $ -- $ -- $ -- $ --
=========== ========== ========== ========== ==========
Supplemental disclosure of non-cash financing
activities:
Capital contribution to forgive debt ....... $ 38,319 $ -- $ 88,630 $ -- $ --
=========== ========== ========== ========== ==========
Non-cash investing activities:
Unrealized (loss) on marketable securities $ (869)
===========
Supplementary information:
Details of acquisition:
Fair value of assets acquired .............. $ 5,538,943
Common stock issued ........................ 5,372,130
-----------
Net cash paid for acquisition .............. $ 166,813
===========
</TABLE>
See notes to financial statements.
13
<PAGE>
PREMIER CLASSIC ART, INC.
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Organization
Premier Classic Art, Inc. (the "Company") formerly Pet-Con Industries,
Inc. previously manufactured recyclable containers and bottles for sale to
private label grocery product manufacturers and private label food packers. The
Company discontinued operations in June 1995. On September 1, 1999 the Company
changed its name and is currently engaged in the marketing of original,
hand-painted production animation cels through a variety of outlets throughout
the United States.
Basis of Presentation
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business.
The Company is currently in default on its long-term debt from prior
operating activities and operating activities have just commenced under new
management.
The Company's ability to continue as a going concern is dependant upon its
ability to obtain needed working capital through additional equity and/or debt
financing and its ability to market its inventory. Management is actively
seeking additional capital to liquidate its current obligations. There is no
assurance that additional capital will be obtained or the Company will be able
to sell its current inventory. These uncertainties raise substantial doubt
about the ability of the Company to continue as a going concern.
The financial statements do not include any adjustments relative to the
recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessary should the Company be unable to continue
as a going concern.
Use of Estimates
The preparation of the 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
disclosure 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.
Marketable Securities
The Company classifies its investment in equity securities as "available
for sale", and accordingly, reflects unrealized losses, net of deferred taxes,
as a separate component of stockholders' equity (deficiency).
The fair values of marketable securities are estimated based on quoted
market prices. Realized gains or losses from the sales of marketable securities
are based on the specific identification method.
Concentration of Credit Risk
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of temporary cash
investments. The Company places its temporary cash investments with quality
financial institutions and, by policy, limits the amount of credit exposure
with any on financial institution.
Reverse Stock Split
Effective September 1, 1999 the Board of Directors approved a
one-for-fifty reverse stock split of its common stock. All references in the
accompanying financial statements to the number of shares and per share amounts
have been retroactively restated to reflect this transaction.
14
<PAGE>
PREMIER CLASSIC ART, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES -- (Continued)
Prepaid Expenses
Prepaid expenses consist primarily of a three year consulting agreement in
the amount of $500,000 which was paid in cash by the Company in September 1999.
Consulting expense charged to operations for the six months ended November 30,
1999 and 1998 was $41,667 and -0-, respectively. For the years ending May 31,
1999, 1998 and 1997, there was no consulting expense.
Inventories
Inventories, consisting of finished animated cels, were acquired as part
of the acquisition and are stated using the discounted market value of the
common stock issued in exchange for the inventory.
Amortization of Intangibles
Goodwill represents related costs over the value assigned to the net
tangible assets acquired. Goodwill is amortized on a straight line basis over
12 months. Amortization for the six months ended November 30, 1999 and 1998 was
$40,329 and -0-, respectively. For the years ending May 31, 1999, 1998 and 1997
there was no amortization expense.
Stock-Based Compensation
Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS
No. 123). The standard encourages, but does not require, companies to recognize
compensation expense for grants of stock, stock options and other equity
instruments to employees based on fair value accounting rules. The Company has
adopted the disclosure-only provisions of SFAS No. 123.
Earnings Per Common Share
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share", which requires companies to present basic earnings per share ("EPS")
and diluted earnings per share instead of the primary and fully diluted EPS
that was required. The new standard requires additional information disclosures
and also makes certain modifications to the currently applicable EPS
calculations defined in Accounting Principles Board No. 15.
Basic and diluted loss per common share is computed by dividing net loss
by the weighted average number of common shares outstanding during the year.
Diluted earnings per common share are computed by dividing net earnings by the
weighted average number of common and potential common shares during the year.
Potential common shares are excluded from the loss per share calculation.
because the effect would be antidilutive. Potential common shares relate to the
preferred stock that is convertible into common stock, convertible debt and
outstanding warrants. The number of potential common shares outstanding were
701,810, 59,064 and 59,064 as of November 30, 1999, May 31, 1999 and May 31,
1998, respectively.
Fair Value of Financial Instruments
At November 30, 1999, the fair values of cash, other current assets,
accounts payable, accrued interest and other accrued liabilities approximated
their carrying values because of the short-term nature of these instruments.
The estimated fair values of the convertible debt subject to fair value
disclosures was determined by multiplying the number of common shares the debt
is convertible into by the quoted market price of the Company's Common Stock at
November 30, 1999.
15
<PAGE>
PREMIER CLASSIC ART, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES -- (Continued)
Carrying Fair
Value Value
------------ --------------
Convertible debt ......... $ 775,000 $ 1,500,000
Reclassifications
Certain reclassifications have been made to prior year balances in order
to conform with the current year's presentation.
2. MARKETABLE SECURITIES
<TABLE>
<CAPTION>
Estimated Gross Gross
Fair Unrealized Unrealized
Cost Value Gains Losses
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
November 30, 1999:
Marketable securities - current:
Common stock ................... $ 46,807 $ 45,938 $ -- $ 869
======== ======== ==== =====
</TABLE>
There were no realized gains or losses for the six months ended November
30, 1999 and 1998 or the years ended May 31, 1999, 1998 and 1997.
3. ACQUISITION
On September 8, 1999, the Company acquired the assets, consisting of
inventory of original, hand-painted production animation cels, of Cool Classic,
Inc., a subsidiary of Joe Cool Collectibles, Inc. for 3,069,788 shares of the
Company's common stock, which represents approximately 40% of the total
outstanding shares of the Company.
The acquisition has been accounted for under the purchase method of
accounting and includes the operations of the acquired entity from September 8,
1999 through September 30, 1999. The assets were recorded at fair value based
on a fairness opinion obtained by the Company from Davsam Consultants, Inc.
since the fair value of stock of the Company was not readily determinable. The
fair value of the stock was determined by using a discounted market value. The
asset of inventory was recorded at $5,372,130. Goodwill of approximately
$167,000 reflects related costs over the value assigned to the net tangible
assets acquired. The Company has not included any proforma unaudited results of
operations as the acquired entity had no operations prior to acquisition.
4. DEBT
Short-term debt consisted of the following: On September 3, 1999, the
Company issued a $775,000 principle 101/2% convertible note due September 3,
2000. Interest is payable monthly, commencing in December 1999 and payable in
arrears from September 1999. The note is convertible into 250,000 shares of the
Company's common stock, at the option of the holder, at a conversion price of
$3.10 per share. The convertible note contains a provision for an automatic
conversion if the closing bid of the common stock is greater than or equal to
$5.50 per share for twenty consecutive trading days. In connection with the
execution of this note, the Company sold the holder 100,000 shares of the
Company's restricted common stock for $.001 per share (which was below fair
market value) and a warrant to purchase 400,000 shares of the Company's common
stock at an exercise price of $1.00 per share. This transaction resulted in
additional interest expense of $9,900.
The holder of this note received a first priority security in the
Company's inventory and an insurance policy in the amount of $1.5 million,
naming the holder as an additional insurer.
16
<PAGE>
PREMIER CLASSIC ART, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
4. DEBT -- (Continued)
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
November 30, May 31, May 31,
1999 1999 1998
-------------- ---------- ----------
<S> <C> <C> <C>
10% notes payable to stockholders, obli-
gation in default at July 1997 (a) ......... $ 3,000 $ 83,000 $ 83,000
12% note payable, obligation in default
at May 31, 1994 (b) ........................ -- 35,000 35,000
8% notes payable to stockholders, less
discount of $6,957, obligation in
default at October 1998 (c) ................ 23,043 33,043 33,043
10% note payable, obligation in default
at April 1994 (d) .......................... -- 25,000 25,000
18% notes payable, obligation in default
at December 1995 (e) ....................... -- 23,645 23,645
12% note payable, obligation in default
at June 1994 ............................... 10,000 10,000 10,000
8% note payable to stockholder, less dis-
count of $2,318, obligation in default
at September 1998 .......................... 7,682 7,682 7,682
------- -------- --------
Total ....................................... 43,725 217,370 217,370
Less current maturities ..................... 43,725 217,370 217,370
------- -------- --------
$ -- $ -- $ --
======= ======== ========
</TABLE>
- - - ------------
(a) On August 13, 1999, the Company paid $1,500 in cash for payment in full of
a $30,000 note with accrued interest of $21,645. On August 23, 1999, the
Company issued 1,000 shares of common stock for payment of the principal
of $50,000 and accrued interest of $36,075.
(b) On August 23, 1999, the Company issued 700 shares of common stock for
payment of the principal of $35,000 and accrued interest of $28,495.
(c) On August 23, 1999, the Company issued 200 shares of common stock for
payment of principal of $10,000 and accrued interest of $4,644.
(d) On August 17, 1999 the president personally took responsibility for the
principal of $25,000 and the accrued interest of $13,319.
(e) On August 23, 1999, the Company issued 460 shares of common stock for
payment of the principal of $23,645 and accrued interest of $21,318.
The above transactions, (a through e), resulted in the Company issuing
2,360 shares of the Company's common stock and a extraodinary gain on
extinguishment of debt of $305,256 included in the statement of operations.
5. STOCK OPTIONS AND WARRANTS
The Company has adopted the disclosure only provisions of Statement of
Financial Accounting Standards No. 123 "Accounting for Stock-Based
Compensation". In September 1999, the Company issued three-year warrants to
purchase 666,666 shares of Common Stock at an exercise price of $1.00 per
share. In connection with the short-term debt, the Company issued a warrant for
400,000 shares of common stock and in connection with the consulting ageement,
the Company issued a warrant to purchase 266,666 shares of common stock.
17
<PAGE>
PREMIER CLASSIC ART, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
5. STOCK OPTIONS AND WARRANTS -- (Continued)
Information regarding the Company's warrants for the six months ended
November 30, 1999 is as follows:
<TABLE>
<CAPTION>
Weighted Average
Shares Exercise Price
------------ -----------------
<S> <C> <C>
Warrants outstanding beginning of period ................................ -- $ --
Warrants exercised ...................................................... -- $ --
Warrants granted ........................................................ 666,666 $ 1.00
Warrants cancelled ...................................................... -- $ --
-------
Warrants outstanding, end of period ..................................... 666,666 $ 1.00
=======
Warrants price range end of period ...................................... $ 1.00
Weighted-average fair value of warrants granted during the year ......... $ .56
</TABLE>
The following table summarizes information about fixed-price stock options
outstanding at November 30, 1999:
<TABLE>
<CAPTION>
Weighted Average Weighted Number Weighted
Range of Number Outstanding Remaining Contractual Average Exercise Exercisable at Average Exercise
Exercise Prices at November 30, 1999 Life Price November 30, 1999 Price
- - - ----------------- ---------------------- ----------------------- ------------------ ------------------- -----------------
<S> <C> <C> <C> <C> <C>
$ 1.00 666,666 3 years $ 1.00 666,666 $ 0.56
</TABLE>
6. INCOME TAXES
The Company has a net operating loss ("NOL") carryforward of approximately
$900,000 expiring in various years through 2014. The Company has not reflected
any benefit of such NOL carryforward in the accompanying financial statements
in accordance with Financial Accounting Standards Board Statement No. 109
"Accounting for Income Taxes" (SFAS 109) as the realization of this deferred
tax benefit is not more than likely.
The Tax Reform Act of 1986 provided for a limitation on the life of NOL
carryforwards, following certain ownership changes. As a result of transactions
in the Company's common stock during the six months ended November 30, 1999, a
change in ownership of greater than 50%, as defined, has occurred. Under such
circumstances, the potential benefits from utilization of tax carryforwards may
be substantially limited or reduced on an annual basis.
There is no provision for income taxes for the six months ended November
30, 1999 and for the years ended May 31, 1999, as the Company had net losses.
The tax effect of the net operating loss carryforward on deferred income
taxes at November 30, 1999 and May 31, 1999 was as follows:
Temporary
Difference Tax Effect
------------ -------------
Net operating loss .......... $ 900,000 $ 360,000
Valuation allowance ......... (900,000) (360,000)
---------- ----------
$ -- $ --
========== ==========
7. EXTRAORDINARY GAINS
In August 1999, the Company issued common shares to extinguish long-term
debt and accrued interest. In connection with these transactions the Company
recorded extraordinary gains of approximately $305,000 ($.23 per share) for the
six months ended November 30, 1999.
18
<PAGE>
PREMIER CLASSIC ART, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
8. COMMITMENTS AND CONTINGENCIES
Leases
On September 3, 1999, the Company signed a sublease agreement for a
warehouse facility. The lease requires the Company to pay certain utility and
related charges.
Future minimum lease payments are as follows:
Years Ending
November 30, Amount
- - - ---------------- ----------
2000 ......... $12,000
2001 ......... 5,000
2002 ......... --
2003 ......... --
2004 ......... --
-------
$17,000
=======
Rent expense for the six months ended November 30, 1999 and 1998 was
$3,000 and -0-, respectively. For the years ended May 31, 1999, 1998 and 1997,
there was no rent expense.
9. SUBSEQUENT EVENT
In December 1999, the Company issued 4,000 shares of common stock for
payment of $30,725 of debt and $19,573 of accrued interest. This transaction
will result in a gain on extinguishment of debt of $49,898 in the subsequent
period. In December 1999, the Company also negotiated payment of $13,000 of
principal and 12,914 of accrued interest for the remaining long term debt.
19
<PAGE>
PART III
Index and Description of Exhibits
INDEMNIFICATION OF DIRECTORS AND OFFICERS
CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable
1. Index to Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
- - - ------------- -----------------------------------------------------------------------------------------
<S> <C>
3.1 Certificate of Incorporation, together with all amendments
3.2 By-Laws
10.1 Marketing Agreement, dated as of September 14, 1999, by and between the Company and
Giltner B. Stevens
10.2 Loan Agreement, dated September 2, 1999, by and between the Company and Giltner Stephens
10.3 Sub-Lease and Assembly Agreement, dated as of September 3, 1999, by and between the
Company and Royal Animated Art, Inc.
10.4 Plan and Agreement of Reorganization, dated as of September 2, 1999, by and among the
Company, Cool Classic Incorporated and Joe Cool Collectibles, Inc.
10.5 Employment Agreement, dated as of September 1, 1999, by and between the Company and
Charles F. Trapp
10.6 Distribution Agreement, dated as of September 1999, by and between the Company and Royal
Animated Art, Inc.
</TABLE>
20
<PAGE>
SIGNATURE
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf the
undersigned thereto duly authorized.
Dated: December 30, 1999
Premier Classic Art, Inc.
/s/ Charles Trapp
By:---------------------------------------
Name: Charles Trapp
Title: President and CEO
21
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Financial Statements of Premier Classic Art, Inc. and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001095606
<NAME> Premier Classic Art, Inc.
<CURRENCY> U.S.DOLLARS
<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> MAY-31-2000 MAY-31-2000
<PERIOD-START> JUN-01-1998 JUN-01-1999
<PERIOD-END> MAY-31-1999 NOV-30-1999
<EXCHANGE-RATE> 1 1
<CASH> 0 217,758
<SECURITIES> 0 45,938
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 5,372,640
<CURRENT-ASSETS> 0 6,096,256
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 6,227,532
<CURRENT-LIABILITIES> 415,041 901,764
<BONDS> 0 0
75 7,640
0 0
<COMMON> 514 306
<OTHER-SE> (415,630) 5,317,792
<TOTAL-LIABILITY-AND-EQUITY> (415,041) 5,325,738
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 390,301
<OTHER-EXPENSES> 23,400 33,121
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 23,400 33,121
<INCOME-PRETAX> (23,400) (423,422)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (23,400) (423,422)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 305,256
<CHANGES> 0 0
<NET-INCOME> (23,400) (118,166)
<EPS-BASIC> (0.31) (0.04)
<EPS-DILUTED> (0.31) (0.04)
</TABLE>
