SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
Commission File Number 0-9455
LITTLE PRINCE PRODUCTIONS, LTD.
(Name of small business issuer in its charter)
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New York 13-3045713
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
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38 South Audley Street
Mayfair, London, England W1Y 5DH
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (4471) 629-7617
40 Lowndes Street, Belgravia, London, England
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(Former name, former address and former fiscal year, if changed
since last report)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common stock, $.01 par value
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(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes X No
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Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
Issuer's revenues for the year ended December 31, 1995 $(20,799).
The aggregate market value of voting stock held by nonaffiliates of the
Registrant as of March 31, 1996 was -0-.
The number of shares of the Registrant's $.01 par value common stock
outstanding as of March 31, 1996 was 24,999,236.
DOCUMENTS INCORPORATED BY REFERENCE
None
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
Little Prince Productions, Ltd. (the "Company" or the "Registrant") was
originally formed to exploit certain ancillary and subsidiary rights to the
literary work entitled "The Little Prince." Subsequent to its organization the
Company has changed its business focus. The Company's current focus is on
acquiring service or manufacturing businesses, as well as developing, selling,
leasing and managing real estate in the United Kingdom, the United States and
other foreign countries. In 1995 the Company was inactive except for
administrative activities in connection with the preparation and filing of the
periodic reports required under Section 13 of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and in preparing the proxy statement for a
Special Meeting of Shareholders that was held on February 29, 1996 (the
"Meeting").
Developments Subsequent to December 31, 1995
At the Meeting the Company's shareholders by an affirmative vote of
approximately 76% of the total shares outstanding adopted the following
proposals: (i) change the Company's state of incorporation from New York to
Colorado by means of a merger (the "Merger") of the Company into Atlantic
Industries, Inc. ("Atlantic"), a Colorado corporation organized on January 31,
1996, which is wholly owned by the Company ("Proposal 1"); (ii) approve the
terms of the merger agreement which provided for, among other things, a 10 for 1
reverse stock split and an increase in the number of authorized shares of the
Company to 50,000,000 ("Proposal 2"); (iii) consented to and authorized the
Company's Board of Directors (the "Board"), at the Board's discretion, to (a)
sell the Company's interest in the common stock of its wholly owned subsidiary,
LPPL Corp., to an independent third-party ("Proposal 3") or (b) to vote to
dissolve LPPL Corp ("Proposal 4"). Proposals 1 through 4 are referred to herein
as the "Proposals."
The number of votes cast for, against or that abstained from each
Proposal is set forth below:
Description For Against Abstain
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Proposal 1 19,036,766 124,350 160
Proposal 2 19,036,766 124,350 160
Proposal 3 19,036,766 124,350 160
Proposal 4 19,036,666 124,450 160
To date, the Company has not consummated the Merger as it is presently
waiting for the consent of the New York Commissioner of Taxation and Finance,
which consent is required in order to file the Certificate of Merger with the
Secretary of State of the State of New York,.
By operation of law, at the effective date of the Merger, all assets,
property, rights, liabilities and obligations of the Company will be transferred
to and assumed by Atlantic. The principal effect of the Merger will be to (i)
change the law applicable to the Company's corporate affairs from the New York
Business Corporation Law to the Colorado Business Corporation Act, (ii) reduce
the number of shares of the Company's $.01 par value common stock (the "Shares"
or the "Common Stock") issued and outstanding, and (iii) increase the number of
Shares authorized for issuance.
Specifically, at the effective date of the Merger, the Company will be
authorized to issue 50,000,000 shares of capital stock ("Atlantic Capital Stock"
or "Atlantic Shares") of which 40,000,000 shares are reserved for issuance as
common stock ("Atlantic Common Stock") and 10,000,000 shares are reserved for
issuance as preferred stock ("Atlantic Preferred Stock").
The Board has entered into preliminary negotiations with an independent
third-party for the purchase of all of the outstanding shares of common stock of
LPPL Corp.
Organization and History of Operations
Original Theatrical Operations. Registrant was incorporated on April 3,
1980 pursuant to the laws of the State of New York for the purpose of exploiting
certain ancillary and subsidiary rights to the literary work entitled "The
Little Prince" by Antoine de Saint-Exupery (the "Work") and to engage in various
other aspects of the theatrical production business.
A. Joseph Tandet acquired the worldwide stage, television, radio,
recording, motion picture, commercial and merchandising rights to the Work on
July 9, 1965. All of the foregoing rights were assigned to the Company by Mr.
Tandet in 1980. The Company believes that it holds the exclusive right to
produce theatrical presentations based upon the Work in the U.S. and in Canada
in the English language as well as the non-exclusive right to produce theatrical
presentations in Canada in the French language. However, its claims to such
rights are presently being disputed by two independent theatrical producers,
John Scoullar and Rick Cummins and the Company has instituted litigation with
respect to such dispute. See "LEGAL PROCEEDINGS-Scoullar and Cummins Matter."
Past Events. On December 31, 1992, LPPL Corp. authorized Theatreworks
USA Corp. ("Theatreworks"), a New York stage production company which produces
plays for family audiences, to produce a new musical stage production based upon
the Work and geared specifically for a juvenile audience. LPPL Corp. was paid
$5,000 as an advance against two percent (2%) of all gross revenues derived by
Theatreworks from the production. To date, revenues generated therefrom have not
yet entitled LPPL Corp. to royalties in an amount equal to the $5,000 already
advanced.
On December 1, 1992, the Company also authorized two independent
theatrical producers, John Scoullar and Rick Cummins, to produce another new
musical stage production based upon the Work, in New York by December 31, 1993,
geared for an adult audience (the "Scoullar Cummins Production"). The
Scoullar/Cummins production opened on October 17, 1993 at the 28th Street
Theater in New York City and ran through December 1993. During the fiscal year
ended December 31, 1993, LPPL Corp. derived gross revenues from the this
production in the amount of $2,000 by way of an advance payment against
royalties. No further royalties have been paid to date. As a result of the
foregoing, Messrs. Scoullar and Cummins claim to have obtained LPPL Corp.'s
right to produce theatrical presentations of the Work in the United States and
Canada. LPPL Corp. has instituted litigation to reform the agreement upon which
Scoullar and Cummins base such claim. See "LEGAL PROCEEDINGS-Scoullar and
Cummins Matter."
Litigation with Gallimard and the Saint-Exupery Family. On February 6,
1992, the Company entered into an agreement with Gallimard and the Saint-Exupery
family in settlement of litigation brought by Gallimard and the Saint-Exupery
family against the Company in 1990. The settlement agreement provided, among
other things, for the preservation of certain television production rights to
the Work held by Pontaccio S.P.A. an Italian television production company
("Pontaccio"), payment to the Company of an aggregate amount of $200,000 (the
"Settlement Fee") in six payments, a royalty to the Company of three percent
(3%) of gross revenues derived from the proposed Pontaccio television
production, and the Company's relinquishment of all of its rights to the Work
except for the following:
(a) the exclusive right to produce theatrical presentations of
the Work in the United States of America and in Canada in the English
language; and
(b) the non-exclusive right to produce theatrical
representations of the Work in Canada in the French language subject to
the prior authorization of Gallimard.
Pontaccio paid the final portion of the $200,000 Settlement Fee in
1994. In addition, Pontaccio remains obligated to pay LPPL Corp. a 3% television
production royalty in the event that it mounts a television production of the
Work. Plans for such a production currently include a budget of approximately
$6,000,000. However, the Company is unable to state whether, if ever, such a
production will be mounted. To date, Pontaccio has not generated any revenues
from such proposed television production, and no royalty payments have been made
to LPPL Corp.
The Boys Next Door. In November 1987, in a joint venture with Duet
Productions Inc., the Company produced an off-Broadway stage production of "The
Boys Next Door" by Tom Griffen. The production was a clear critical, but not a
financial, success. The production did however run for more than 70 performances
in New York, as a result of which, the Company became entitled to certain
subsidiary rights to subsequent performances of the production. There is no
assurance that significant additional revenue, if any, will be earned by LPPL
Corp. in connection with this property.
The Company has entered into other licensing agreements with
third-parties for which it does not expect to derive any future revenue.
Reverse Acquisition-Tyne River Properties. On November 16, 1992 (the
"Acquisition Date"), Registrant acquired and became the successor to Tyne River
Properties, plc, an English company ("TRP") through a "Reverse Acquisition"
pursuant to which the shareholders of TRP acquired an aggregate of 11,899,236
shares of Common Stock (the "Acquisition Shares"), comprising, upon issuance,
approximately 85% of the issued and outstanding Common Stock, in exchange for
all of the issued and outstanding capital stock of TRP. As a part of the Reverse
Acquisition on November 16, 1992, Registrant's theatrical operations and assets
were transferred and assigned to its wholly owned subsidiary, LPPL Corp. to be
continued therein under the direction of A. Joseph Tandet. At this time (i) Mr.
Tandet resigned his position as President of the Company and was appointed
President of LPPL Corp., and (ii) Peter N. Chapman was appointed as an executive
officer and Director of LPPL Corp. As a further consequence of the Reverse
Acquisition, on February 4, 1993 Registrant changed its fiscal year end from
March 31 to December 31 to coincide with the fiscal year end of TRP.
Overview. Following the Acquisition Date, Registrant's business
activities were intended to be conducted in three separate segments, with TRP's
proposed real estate acquisition and investment operations constituting
Registrant's principal business and the theatrical production operations of the
Company constituting a smaller, but continuing area of operations. Certain real
estate development projects and operations, owned and conducted by TRP at the
Acquisition Date were intended to constitute a third segment which was to be
phased out as promptly as practicable through the completion and/or disposition
of all such projects. Through and until March 29, 1994 Registrant conducted or
attempted to initiate operations in these three segments, in accordance with
such intentions by: (a) attempting to obtain financing, through public or
private sales of its equity securities, for its proposed real estate acquisition
and investment business; (b) endeavoring to complete and/or dispose of its real
estate development projects on favorable terms; and (c) continuing its
operations in the field of theatrical production through LPPL Corp. Ultimately,
however, Registrant was unable to raise any financing with which to commence its
proposed real estate investment business. In addition, Registrant was forced by
unforeseen circumstances to divest itself of all of its real estate development
projects, and to enter into certain transactions, referred to below as a "Second
Reorganization" which involved the issuance of a major block of stock to
Riparian Securities, Ltd. ("RSL") and a change in the management of the Company.
Discontinued Real Estate Development Projects-Sale of TRP. TRP was,
from its inception in 1987 through March 29, 1994, engaged in the acquisition
and development of property in the Newcastle-Upon-Tyne area in England. It
conducted its business directly and indirectly through its operating
subsidiaries, Exchange Buildings Limited ("EBL"), Pandon Developments Limited
("PDL"), and Selective Construction plc ("SCP"). Its development sites included
the Pandon and Exchange building sites in central Newcastle-Upon-Tyne and a
parcel of land adjacent to a car assembly plant approximately five miles south
of Newcastle-Upon-Tyne.
Towards the end of 1993, TRP began to encounter severe cash flow
problems which accelerated from that point in a swift and unanticipated manner
leaving TRP insolvent by early 1994. This was a result of a number of
circumstances including, but not limited to, one of the most severe economic
recessions experienced in the UK since World War II. Through most of 1993,
however, TRP's management continued to believe that economic conditions would
improve. This was not the case, and the property market generally continued to
be adversely affected.
During 1993, based upon management's belief that economic conditions
would improve, TRP continued to move forward on its real estate development
projects. One of such projects, the Exchange Building, is a listed (historical
landmark), 150 year-old, 5-story brick building, was a major piece of real
estate which TRP's management believed had enormous potential for development.
Substantial expenditures had been made on the Exchange Building project prior to
1993, but considerable additional expenditures would have been required to bring
this project to its full economic potential. Work on the Exchange Building had
began in 1990 and before the end of 1992, TRP had obtained all permits required
for the renovation of the property into 75,000 square feet of commercial office
space. By the end of 1993, TRP had completed the complex legal and commercial
negotiations which had been required to remove all of tenants from the building.
This project was funded for over four years by Barclays Bank, which
continued to extend credit to TRP until December of 1993. During 1993, however,
TRP had begun to encounter severe cash flow problems which made it increasingly
difficult to service the Barclays Bank debt. TRP's cash flow problems were
caused and exacerbated by a number of factors. First, the economic recession cut
badly into TRP's ability to reach projected sales goals for apartments which had
been completed in another development project, "Pandon Development." The
disappointing sales at the Pandon Development were the direct result of the
downturn in the real estate market which had resulted from the economic
recession noted above. Cash flow problems were further compounded by the drain
on TRP's limited cash resources caused by the necessity to pay substantial
settlement fees in order to get tenants to vacate the Exchange Building.
Further, work on the renovation of that property which, if completed, might have
enabled TRP to generate some income, was greatly curtailed, if not stopped
entirely, because of TRP's inability to pay the contractors and professionals
who would have been retained for such purposes. Moreover, because of poor
general economic conditions in the area, TRP was unable to prelet any space in
the planned renovation and was therefore further disabled from obtaining
financing for the project. In addition, TRP's income was severely diminished as
a result of the cessation of rental revenues which followed the removal of
tenants from the Exchange Building.
As a result of the foregoing cash flow problems, by early 1994 TRP
began actively pursuing the negotiation of a joint venture agreement with terms
that would have enabled it to meet its obligations in full.
At about the same time, Barclays Bank indicated that they would like
repayment of their loan, but that they would be reasonably flexible as to when
repayment had to be made, as long as TRP took steps to sell the Exchange
Building or make alternate plans to repay the Barclays Bank debt. Management
believed that with Barclays Bank remaining flexible as to the time of payment,
TRP would be able to realize a reasonable return on the Exchange Building. Plans
were made to seek one or more partners for a joint venture which would fund and
complete the renovations of the building, allowing TRP to at least share in the
revenues to be derived from the completed project.
Also at the same time, Vaux Breweries ("Vaux"), a former tenant in the
Exchange Building, demanded payment of a (pound)35,000 settlement fee from TRP.
This liability had arisen out of a settlement agreement which TRP had entered
into for the purpose of getting Vaux to agree to vacate its facilities in the
Exchange Building. Barclays Bank rejected TRP's request for a loan of
(pound)35,000 to pay this liability. Thereupon TRP's management engaged in
negotiations with Vaux aimed at getting Vaux to agree to delay payment until TRP
was able to liquidate the Exchange Building on favorable terms. Vaux refused to
agree to such delay and, instead, issued a petition to the Court to dissolve
Exchange Buildings, Limited ("EBL") (the wholly owned subsidiary of TRP which
held ownership of the Exchange Building) and liquidate its assets. This step was
roughly equivalent to Vaux's bringing a petition for involuntary bankruptcy
under Chapter VII of the U.S. Bankruptcy Code. As a direct result of the actions
taken by Vaux, Barclays Bank was constrained to demand immediate payment in full
of all moneys owned to it by EBL, which at that time equaled (pound)489,000, (or
approximately $724,000). Thus, the Vaux petition effectively made it impossible
for TRP to negotiate either a joint venture agreement for the renovation of the
Exchange Building or a sale of the Exchange Building under favorable, or even
reasonable, circumstances. It was clear that the combination of the foregoing
circumstances was inevitably going to result in a forced sale of the Exchange
Building at a price substantially lower than TRP's previous valuation of that
property.
As a direct result of the foregoing circumstances it was necessary to
reduce the value at which the Exchange Building was included in the accounts of
Registrant by $970,000 to reflect its much reduced value on the basis of the
requirement for a forced sale. This reduction in the asset value of the Exchange
Building attributed to TRP having a negative net worth of approximately
(pound)199,000 by early 1994.
TRP's financial condition was further worsened by a diminishment in the
value of its two other development projects, the property known as the Padon
Development and a parcel of twenty acres of undeveloped land with one two-story
brick farmhouse situated thereon, located near a major highway (the "A19
Property"). With respect to the Padon Development, as noted above, the general
downturn in the real estate market throughout the UK made it extremely difficult
to sell the apartments into which the Padon Development had been convened.
Moreover, because of TRP's overall poor financial condition, it was forced to
remit any net proceeds, from such sales as it was able to effect, to creditors.
The A19 Property was also revalued downward during fiscal 1993 in the amount of
$120,000. This was the direct result of the refusal of a planning permission for
a parcel of property adjacent to the A19 Property, owned by unrelated persons.
To the best knowledge of TRP's management, it was assured before 1994 that the
adjacent property was to be the site of a new football stadium. Unfortunately,
however, unexpected opposition to construction of such a facility at that site,
from an unrelated party, prevented the issuance of a permit for such purpose.
Appeals to the local planning commission were brought by the football club and
the final, adverse decision was not handed down until March of 1994. As a result
of the foregoing, by March 29, 1994, the value of the A19 Property had been
significantly diminished from TRP's original estimate thereof.
Commencing in January of 1994, the Riparian Group (as defined below)
had begun to explore the feasibility of acquiring a major stock position in, and
management control of, Registrant. They were interested in a publicly traded
corporation because they believed it would be an effective vehicle for the
effectuation of their proposed business plan. In the interest of such potential
affiliation with Registrant, the Riparian Group agreed with TRP, to use its best
efforts to protect the Company from the anticipated adverse effects of the
dissolution of TRP's subsidiaries, and the liquidation of properties held
thereby, under the unfavorable conditions then obtaining.
On March 29, 1994, Registrant sold all of the issued and outstanding
stock of TRP to Bravecorp Limited ("Bravecorp"), a U.K. company wholly owned by
Riparian Investments Limited ("RIL") and formed specifically for the purpose of
purchasing TRP for the nominal consideration of (pound)1. RIL is a company
affiliated with Riparian Securities Limited ("RSL") through common ownership and
management (RIL and RSL, as well as their controlling persons, will sometimes be
referred to herein, collectively, as the "Riparian Group").
The events which followed confirmed the expectations of all the
parties. Specifically, on April 15, 1994, Barclays Bank, foreclosed on EBL and
took legal possession of the Exchange Building. On April 18, 1994, Bravecorp
sold EBL to Lacebury Limited, a firm which specializes in dealing with insolvent
companies, for a price of (pound)2. On April 26, 1994, Bravecorp sold all of the
remaining assets of TRP, except for PDL (and the Pandon Development owned by
PDL) to Lacebury Limited for a price of (pound)2. At approximately the same
point in time, Bravecorp sold PDL for the same nominal sum to Gracelord Limited
("Gracelord"). Neither Lacebury nor Gracelord is affiliated with Registrant, the
Riparian Group, or any affiliate of Registrant or the Riparian Group. In
connection with their services in respect of the foregoing transactions and
dealing with outstanding creditors and the appointment of company receivers and
liquidators, Bravecorp incurred unreimbursed expenses of approximately
(pound)3,525 (approximately $5,000).
At the time of Bravecorp's purchase of TRP, the Riparian Group was not
affiliated with Registrant and all of the foregoing transactions were made at
arm's-length. In September of 1994, RSL acquired approximately 25% of issued and
outstanding Common Stock by way of new issuances and transfers of shares from
certain of Registrant's past and present officers and directors. In connection
therewith, certain members of Registrant's management, who were associated with
TRP, resigned and in their place, members of RSL's management were appointed as
officers and directors of Registrant. See the "RSL Agreement" below.
Lack of Working Capital-Second Reorganization. As noted above, after
the Reverse Acquisition, Registrant was not able to raise any funds through
private or public sales of its securities, or otherwise, TRP was therefore
unable to institute its real estate investment business plan and the lack of
available working capital resulted in Registrant's overall inability to conduct
operations in any of its three proposed business segments during 1993 or
subsequently thereto, except on a minimal level. On August 22, 1994, in an
effort to improve Registrant's business prospects, Registrant and certain
members of its then current management entered into an agreement with RSL.
RSL Agreement. On August 22, 1994, Registrant entered into an agreement
(the "RSL Agreement") with RSL. RSL is a company incorporated and registered in
England (Company No. 2855251). Its registered office is located at 38 South
Audley Street, Mayfair, London, W1Y 5DH, England. RSL is engaged in the business
of real estate investment and management, principally in the area encompassing
London and the Southwest of England.
The RSL Agreement principally provided for:
(a) a loan by RSL to Registrant of GB(pound)25,000, to be used
to satisfy financial, tax and regulatory obligations of Registrant;
(b) the sale by Registrant to RSL of 3,250,000 newly issued
shares of Common Stock at a price of $.01 per share in conjunction with
the sale by Peter N. Chapman and William J. Peacock to RSL of an
additional 2,990,402 shares for the nominal price of $.0001 per share;
(c) the resignation of four of the five then present directors
of Registrant, pursuant to which Terence G. Galgey, William J. Peacock,
A. Joseph Tandet, and Carl Kuehner resigned as directors of Registrant,
which resignations became effective as of October 1, 1994;
(d) the replacement of the resigning directors by two
designees of RSL, Adrian P. Kirby and Christopher N.C. Jones, and the
reduction in the size of the board from five to three persons; and
(e) the resignations of Messrs. Galgey, Peacock, Tandet, and
Kuekner as officers of Registrant, which resignations became effective
as of October 1, 1994.
The closing of the RSL Agreement took place on September 9, 1994. The
newly constituted board of directors took office on October 1, 1994, ten days
after a Notice to Shareholders, prepared in accordance with Rule 14f-1 of the
Securities and Exchange Act of 1934, as amended (the "34 Act") was mailed to
Registrant's shareholders. Thereafter, Adrian P. Kirby was appointed as Chairman
and Chief Executive Officer of Registrant and Christopher N.C. Jones was
appointed as its Executive Vice President. Prior to their taking office, neither
Mr. Kirby nor Mr. Jones held any offices, employments, directorships or other
affiliations with Registrant. Peter N. Chapman continued to hold the positions
of Secretary, Treasurer and a Director of Registrant. On February 15, 1995, Mr.
Jones was removed for cause by the remaining members of the board and Robert D.
Evans was appointed to fill the vacancies created by Mr. Jones's removal.
Proposed Business Plan of RSL. RSL originally entered into the RSL
Agreement with the intention of arranging, within six months, for the Company to
acquire through the issuance of large blocks of common stock sufficient
investment properties and related business activities to enable the Company to
satisfy the minimum financial criteria for inclusion in the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ").
Circumstances Resulting in Delay. Upon consummation of the RSL
Agreement and related transactions, the Company lacked a sufficient amount of
authorized but unissued Shares to acquire suitable investment properties. In
order to increase the number of authorized Shares, the Company needed to amend
its Certificate of Incorporation, which in turn required holding a shareholders
meeting and distributing a proxy statement soliciting the approval of the
Company's shareholders owning a majority of the Shares outstanding. In order to
distribute the proxy statement, however, the Company first had to prepare and
file its past and currently due annual reports on Forms 10-K and quarterly
reports on Forms 10-Q with the Securities and Exchange Commission (the
"Commission"). During the past year the Company worked on achieving this goal
and on preparing the proxy statement for the Meeting held on February 29, 1996.
See "BUSINESS OF THE COMPANY-Developments Subsequent to December 31, 1995."
The Company's Business Plan
The Company has expanded its business plan to encompass the potential
acquisition of service or manufacturing businesses, as well as commercial real
estate properties for equity in the Company. After the sale or dissolution of
LPPL Corp., the Board does not intend to engage in any additional theatrical
productions.
Upon consummation of the merger, the Company's current acquisition
strategy involves the possibility of acquiring, in exchange for Atlantic Capital
Stock, existing businesses that management believes will offer the opportunity
of sound sustainable earnings with the potential for growth. Such acquisitions
may result in the merger of another corporation into the Company in return for
Atlantic Common Stock. See "PROPERTIES" for a description of the Company's
investment strategies.
Competition
Real Estate Business. Management believes that Registrant may face
competition for the most attractive real estate investment opportunities from
other investors who are aware of the opportunities available at this time to
purchase properties at significantly deflated prices. Other investors, some of
whom may have greater resources than Registrant, are in the market for real
estate investment and present intense competition perforce of their being
considerably better established and larger than Registrant in total assets and
resources. There cannot be any assurance that Registrant will, in fact, be able
to raise equity capital on terms favorable to it or at times necessary to enable
it to take advantage of attractive real estate investment opportunities against
potential competitors.
Theatrical Production Business. The entertainment industry in general,
and the production of stage productions on or off-Broadway or in Regional or
other theaters in particular, is extremely speculative. Only a small percentage
of theatrical productions ever make a profit. Revenues from the Company's
theatrical production business are dependent on a variety of factors over which
it has no control, including critical and consumer reaction, competition from
other productions and the advertising and publicity which the Company and
parties external to the Company, such as theatrical reviews, etc. provide for
the Company's productions. Audience appeal depends, among other things, upon
unpredictable critical reviews and changeable public tastes, factors which
cannot be reliably ascertained in advance and over which the Company has no
control. The Company's principal competitive disadvantage in this field has
been, and continues to be, its extremely limited capital resources. The
Company's shareholders have approved proposals granting the Board the authority
to either sell the common stock of LPPL Corp. to an independent third party or
vote to dissolve LPPL Corp. Upon the sale or dissolution of LPPL Corp., the
Board does not intend to engage in the theatrical production business.
Personnel
During the fiscal year ended December 31, 1995, Registrant had no
employees other than its officers and directors.
ITEM 2. PROPERTIES
The executive offices of Registrant have been maintained at the
headquarters of the Riparian Group at 38 South Audley Street, Mayfair, London,
W1Y 5DH, England. Registrant has no formal lease or agreement with respect to
its office facilities and pays no rent or other remuneration for their use.
LPPL Corp. maintains its headquarters at the office of its president,
Mr. A. Joseph Tandet, at 555 Fifth Avenue, New York, NY 10017. Mr. Tandet
receives no remuneration from LPPL Corp. or Registrant for the use of this
facility or for the clerical and other incidental services provided to LPPL
Corp. by Mr. Tandet.
Nature of Investments/Investment Strategy
Upon consummation of the Merger, the Company does not intend to seek
investments that involve a high degree of dependence on specialized skills or
market conditions or which will be at risk from rapid changes in market
conditions or from technological change. All potential acquisitions will be
analyzed in depth by the executive officers of the Company and approved by the
Board. Advice from independent advisors will be sought as deemed appropriate by
the executive officers.
In evaluating potential investments, the Company will consider, among
other factors: (a) the current anticipated cash flows and their ability to meet
operational needs and provide a competitive market return on the equity
invested; (b) the potential for capital appreciation; (c) the geographical area
and location of the business and/or property (which businesses or properties may
be located in the United Kingdom, the United States or elsewhere); (d) the
ability to increase cash flow through a capable management; (e) the capability
of existing management; (f) the market positions and relative strengths of the
business related to its competitors; (g) the general economic growth and tax and
regulatory environment of the communities in which the business operates; and
(h) the prospects for liquidity, through sale, financing or refinancing.
The Company further intends to keep debt to conservative levels
relative to equity with regard to both mature investments and new acquisitions.
The Company also may raise funds by selling Atlantic Common Stock in public or
private transactions. The Company's shareholders do not and will not have any
preemptive rights with respect to any such issues of Atlantic Common Stock.
Moreover, there can be no assurance that the Company will be able to raise any
funds through the sale of Atlantic Common Stock.
In accordance with their fiduciary duties to the Company and its
shareholders, the Board may determine that a change from the Company's current
investment strategies and policies is in the best interest of the Company and
its shareholders and shareholder approval will not be necessary for a change in
the Company's investment policies. Although the Company currently does not
anticipate such a change, should the Board deem it advisable, changes will be
made. Alternative methods of financing, which could be adopted by the Board in
the future, could include the issuance, in public or private transactions, of up
to 10,000,000 shares of Atlantic Preferred Stock in addition to short,
intermediate or long-term borrowings, on secured or unsecured basis. Such
borrowings could be in the form of bank borrowings, including unsecured
borrowings or borrowings secured on the Company's then existing assets and/or
assets being acquired with borrowed funds. Borrowings could also be made by the
Company by way of the issuance of senior or subordinated notes or debentures,
including notes or debentures convertible into shares of Atlantic Common Stock.
The Company may also combine any of the above financing methods.
ITEM 3. LEGAL PROCEEDINGS
Scoullar and Cummins Matter
On May 10, 1994, Little Prince Productions, Ltd. commenced an action in
the Supreme Court of the State of New York, New York County, entitled Little
Prince Productions, Ltd. vs. John Scoullar and Rick Cummins by serving a summons
and complaint which demanded reformation of an agreement (The "Scoullar/Cummins
Agreement), dated September 30, 1992 by and between Little Prince Productions,
Ltd. and two independent theatrical producers, John Scoullar ("Scoullar") and
Rick Cummins ("Cummins"). This agreement gave Scoullar and Cummins the right to
produce a new musical production based upon the Work. The Company filed the
summons and complaint in response to claims by Scoullar and Cummins that the
Scoullar/Cummins Agreement grants to them the unqualified right to produce
theatrical productions based upon the Work, throughout the United States and
Canada, utilizing materials from all sources, including those directly connected
to the Work. The Company claims that the rights of Scoullar and Cummins to mount
theatrical productions of the Work in the United States and Canada is limited to
productions based solely upon their own materials. Defendants filed an answer
containing a general denial and a counterclaim requesting declaratory judgment
in their favor.
Depositions are expected to be taken in April 1995 with a trial
expected to follow several months thereafter. The Company considers the claims
of Scoullar and Cummins to be spurious. The Company is unable to state at this
time, what the outcome of this litigation will be.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year ended December 31, 1995,
no matters were submitted to a vote of security holders. The Company, however,
did hold the Meeting on February 29, 1996. See "DESCRIPTION OF
BUSINESS-Developments Subsequent to December 31, 1995."
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Common Stock is traded in the over-the-counter market under the
symbol "LTLP." Because the Company did not meet the revised financial criteria
for continued inclusion in the National Association of Securities Dealers'
Automated Quotation System ("NASDAQ"), it was delisted therefrom, effective May
27, 1992. Since such date, Registrant's common stock has been quoted on the OTC
Bulletin Board, provided however that since April 1, 1994, there has been so
little trading activity in Registrant's stock that no bids are shown for the
quarters subsequent thereto.
The following table sets forth representative high and low closing bid
prices by calendar quarters as reported by the National Quotation Bureau and the
OTC Bulletin Board from December 31, 1993 through March 31, 1996(2). Bid
quotations represent prices between dealers, do not include retail mark-ups,
mark-downs or other fees or commissions, and do not necessarily represent actual
transactions.
Bid Prices
--------------------------
Calendar Quarter Ended High Bid Low Bid
---------------------- -------- -------
December 31, 1993 1/8 .01(1)
March 31, 1994 3/8 .10(1)
June 30, 1994 N/A(2) N/A(2)
September 30, 1994 N/A(2) N/A(2)
December 31, 1994 N/A(2) N/A(2)
March 31, 1995 N/A(2) N/A(2)
June 30, 1995 N/A(2) N/A(2)
September 30, 1995 N/A(2) N/A(2)
December 31, 1995 N/A(2) N/A(2)
March 31, 1996 N/A(2) N/A(2)
- ---------------
(1) As reported by the National Quotation Bureau
(2) Management has been advised by the National Association of Securities
Dealers, Inc. that no dealer submitted bid prices for registrant's stock from
April 1, 1994 through March 31, 1996.
As of March 31, 1996, there were 340 record holders of the Common
Stock. The Registrant has not declared or paid any form of dividends on the
Common Stock during the last two fiscal years and does not contemplate declaring
any and paying any dividends on the Common Stock in the near future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
Overview
On November 16, 1992 (the "Acquisition Date") the Company acquired all
of the issued and outstanding capital stock of Tyne River Properties plc, a
company incorporated in England ("TRP"), from the holders thereof in exchange
for eleven million, eight hundred ninety-nine thousand, two hundred thirty-six
(11,899,236) newly issued shares of the Common Stock. The scale of this
acquisition was such that the activities of TRP formed the major part of the
Company's activities until the sale on March 29, 1994. As required by U.S.
accounting standards, the financial statements for the years ended December 31,
1993 and December 31, 1994, have been prepared to treat TRP as the parent
company with balance sheet data and results of operations of Little Prince
Productions included only with effect from the Acquisition Date. All the
comparative financial information for periods prior to the Acquisition Date
through December 31, 1994 therefore relate solely to TRP and its subsidiaries.
The balance sheets also reflect the effects of accounting for the acquisition as
a merger (purchase type).
Balance sheet amounts originally denominated in United Kingdom sterling
have been translated into U.S. dollars using the veer-end rate of exchange.
Operational results originally denominated in United Kingdom sterling have been
translated into U.S. dollars using the average annual rate of exchange. All
business transactions effected by TRP are made in United Kingdom sterling.
Fluctuations in foreign exchange rates could have, and in the past have at
various times had, either negative or positive impacts on the Company's balance
sheet and results of operations. The Consolidated Statement of Shareholders'
Equity included in the financial statements, which form a part of this report,
shows the impact of changes in the dollar/sterling exchange rate on the value of
TRP's assets and results of operations over this and prior periods. Such
Statement for the years ended December 31, 1995 and December 31, 1994 show no
exchange gain or loss on translation.
Results of Operations
Generally, the decrease in the Company's net loss from discontinued
operations in 1994 resulted from the Company's decision to sell TRP, in part,
due to the additional decrease in the value of the A19 Property (a property
previously held by TRP). The sale of TRP resulted in a gain of $287,428.
Following discontinuance of the real estate development activities, the
Company's continuing business comprises its theatrical operations. The results
have been restated accordingly. All of this income derives from arrangements
whereby the Company receives revenue dependent on the successful staging of
theatrical productions. If the theatrical productions are not successful then
the Company's revenue is severely reduced. The timing of receipt of the income
is also dependent on the timing of staging the theatrical productions and can
therefore fluctuate year on year. Whereas income was received during the 2 years
ended December 31, 1995 there is no guarantee that income will continue to be
received into the future. Revenue is not sensitive to changes in prices nor the
effects of inflation.
During the fiscal year ended December 31, 1995, management's primary
task has been to deal with the preparation and completion of the various
financial and regulatory documentation which the Company has been required to
file, some of which had been overdue. All filings are now up to date. The
majority of the operating costs of $104,947 incurred during the year related
specifically to the audit, accounting, secretarial and legal costs associated
with the preparation of the aforementioned documentation.
Liquidity and Capital Resources
Throughout the 2 years ended December 31, 1995 and 1994, albeit without
success, the Company sought to raise additional liquidity through the issuance
of additional shares of its Common Stock in order to further the property
development segment of its business. This business was characterized by large
fluctuations in working capital requirements arising from the relatively long
duration of projects. In the initial stages, projects would absorb significant
cash as properties were under construction. The Company would receive a return
on its investment when the completed properties were sold. Given the lack of
success in raising funds through the issuance of Common Stock, the Company had
to substantially increase its borrowings.
On March 29, 1994, the Company disposed of its interest in the share
capital of TRP. The effect of this disposal is set out in detail in the Notes to
the Financial Statements.
On August 22, 1994, the Company reached agreement with its officers and
directors and a firm of professional advisors to issue shares of its Common
Stock in full and final settlement of any claims they may have had against the
Company. A total of 7,750,000 shares of common stock were issued in settlement
of liabilities totalling $462,656. On the same day, an additional 3,250,000
shares of common stock were issued for $32,500 to Riparian Securities Limited
who, in addition to acquiring the shares in the common stock, had indicated
their intention to give short term financial support to the Company throughout
the period of reorganization. The combined effect of both of these transactions
was to improve the liquidity of the Company by $495,146.
In order to reduce outstanding liabilities relating to legal, audit and
secretarial services and also to meet the excess of continuing operating costs
of the Company over income, including those costs associated with meeting the
regulatory requirements of the Company, $10,900 was realized from the sale of
investments at book value during 1995. During 1995, Patchouli advanced fund by
way of loans to the Company totalling $92,355.
The Company had no material commitments for capital expenditure at any
of the years ended December 31, 1995 and 1994.
Future Liquidity
Management does not believe that the Company has the ability to raise
adequate resources from its existing revenue operations. The Company is
therefore dependent in the short term from continued loans from Patchouli. Upon
consummation of the Merger the Company intends to acquire through the issuance
of additional shares of Atlantic Capital Stock a suitable business or businesses
and/or to obtain additional funds through the sale of Common Stock in public or
private transactions.
The future liquidity of the Company may also be adversely effected when
the Company either sells or dissolves LPPL Corp.-the only current source of
revenue for the Company.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the company required by Regulation S-B are
attached to this Report. Reference is made to Item 13 below for an index to the
financial statements.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Directors and Executive Officers
Directors and Executive Officers During the Year Ended December 31,
1995. The table below sets forth the persons who were the directors and
executive officers of Registrant during the year ended December 31, 1995
together with their respective ages, their respective dates of service, the year
in which each was first elected or appointed an officer or director, and any
other office in Registrant held by each such person. All persons who served as
officers of Registrant during this period also served as executive officers.
<TABLE>
<CAPTION>
Officer and Director
------------------------------
Name of Director Other Offices Held Age From To
---------------- ------------------ --- ---- --
<S> <C> <C> <C> <C>
Adrian P. Kirby(1) Chief Executive Office, Chairman, President 36 October 1, 1994 Present
Peter N. Chapman Treasurer, Secretary 39 November 16, 1992 Present
Robert D. Evans Executive Vice President 40 February 15, 1995 Present
A. Joseph Tandet President, Director LPPL Corp. 63 November 16, 1992 Present
</TABLE>
- ---------------
(1) Mr. Kirby took office on October 1, 1994 in connection with RSL's
acquisition of approximately 25% of Registrant's issued and outstanding common
stock.
Messrs. Kirby, Chapman, and Evans, Registrant's current officers and
directors, devote such of their time to Registrant's business and affairs as is
required for their executive duties and meetings of the board of directors. On
average, this requires an expenditure of 36 hours per week on the Registrant's
business.
Family Relationships
No family relationship exists between any director or executive officer
of Registrant or person contemplated to become such.
Business Experience
The following summarizes the present occupation and business experience
during the past five years for each person who is currently a director or
executive officer of Registrant. No other persons have been nominated or chosen
to become directors of Registrant.
Adrian P. Kirby has been the President, Chief Executive Officer and
Chairman of the Board of Directors of Registrant since October 1, 1994. He was a
founder and is a major shareholder of Atlantic Properties, Ltd., and has served
as a Director and as Treasurer of such corporation since its inception on
February 15, 1995. In 1993, Mr. Kirby founded The Riparian Group, consisting of
Riparian Securities, Ltd., Riparian Investments, Ltd. ("RIL"), and Riparian
Properties, Ltd. Mr. Kirby is the Chief Executive Officer of all of the
constituent corporations of the Riparian Group. In 1984, Mr. Kirby incorporated
Guardacre Investments Limited, and subsequently, Guardacre Securities and
Guardacre Properties Limited. Collectively, these corporations were known as the
"Guardacre Group." From 1984 through November 1993, Mr. Kirby was the Chief
Executive Officer of the Guardacre Group.
Peter N. Chapman has served as Treasurer, Secretary, and a Director of
Registrant from November 16, 1992 through the present. He also served as a
Director and the Secretary of TRP from 1986 until March 29, 1994. On April 15,
1994, Barclays Bank foreclosed on Exchange Buildings, Ltd., a principal
subsidiary of TRP. Chapman has been employed as a chartered accountant since
1979. He has been self employed since 1990, first independently and subsequently
as a partner in Chapman & Chapman, a firm of chartered accountants. From 1988
through January 1990, Mr. Chapman worked for William A. Swales Limited where,
commencing in January 1989, he served as Finance Director. Effective November
16, 1992, Mr. Chapman was appointed as an officer and director of LPPL Corp., a
wholly owned subsidiary of Registrant. Mr. Chapman was admitted as a Fellow of
the Institute of Chartered Accountants in England and Wales in 1979.
Robert David Evans has been the Executive Vice President and a Director
of Registrant since February 15, 1995. He has also served as the President and a
Director of Atlantic Properties, Ltd. since its inception on February 15, 1995.
Since 1993, Mr. Evans has been self-employed as a business consultant, assisting
with acquisitions and disposals of various business entities and with financing
of various projects, principally involving gold, diamonds, and oil properties in
Russia. From 1988 through 1992, Mr. Evans was Chairman and Chief Executive
Officer and a major shareholder of Enterprise Computer Holdings, Plc ("ECH").
ECH is involved in the marketing of computer hardware and software.
A. Joseph Tandet served as President, Treasurer, and a Director of the
Company from its inception in April 1980 until November 16, 1992, when he
resigned from his positions as President and Treasurer and was appointed Vice
President of the Registrant. He served as Vice President and a Director of
Registrant until October 1, 1994 when he resigned his positions as required
under the terms of the RSL Agreement. Mr. Tandet has been President and a
Director of LPPL Corp. since its inception in 1992, and continues to serve as
such. For more than the past twenty years, Mr. Tandet has been an attorney
practicing in New York City. Mr. Tandet presently serves as Chairman Emeritus of
the Manhattan Theater Club, Inc.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 and the rules
thereunder require the Company's officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission and with the NASDAQ and to furnish the Company with copies.
Based on its review of the copies of the Section 16(a) forms received
by it, or written representations from certain reporting persons, the Company
believes that, during the last fiscal year, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten-percent
beneficial owners were complied with.
ITEM 10. EXECUTIVE COMPENSATION
Current Remuneration
Registrant has no stock option or stock appreciation rights, long term
or other incentive compensation plans, deferred compensation plans, stock bonus
plans, pension plans, or any other type of compensation plan in place for its
executive officers, directors, or other employees and none of its executive
officers or directors have ever received compensation of any such types from
Registrant pursuant to plans or otherwise.
The following table sets forth information concerning the annual
compensation received or accrued for services provided in all capacities to
Registrant for the years ended December 31, 1995 and 1994 by Registrant's chief
executive officer. None of Registrant's executive officers received or accrued
annual compensation in excess of $100,000 in any of such years. All of
Registrant's current executive officers have agreed to render services to
Registrant solely for the purpose of enhancing the value of their shareholdings
in Registrant, until such time as Registrant has the financial resources
available to compensate such persons for their services.
Summary Compensation Table
Annual All Other
Compensation Compensation
------------ ------------
Fiscal Year
Name Position December 31, Salary
---- -------- ------------ ------
Adrian P. Kirby(1) President and 1995 $ -0- $ -0-
CEO 1994 $ -0- $ -0-
- ---------------
(1) Mr. Kirby became president and chief executive officer of Registrant on
October 1, 1994. Mr. Kirby has agreed to render his services to Registrant
solely for the purpose of enhancing the value of his shareholdings in Registrant
until such time as Registrant has the financial resources available to
compensate him for his services.
Directors Remuneration
The directors of Registrant are not compensated for their services as
such.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth information with respect to the
beneficial share ownership, as of March 31, 1996 of Registrant's common stock,
$.01 par value, by each person who is known by Registrant to own beneficially
more than 5% of Registrant's common stock.
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership Percent of Class(3)
------------------- -------------------- -------------------
Patchouli Foundation(1) 6,240,402 25%
c/o Von Erlach & Partners
Strasse 7, Postfach 4088
8022 Zurich
Adrian P. Kirby(2) 6,240,402 25
40 Lowndes Street
Belgravia, London
SW1X9HX, England
Terence G. Galgey(3) 2,250,000 9
Little Lodge
Great Bardfield
Braintree, Essex CM7 4QB
England
John L. Milling(3) 1,250,000 5
115 River Road, Bldg. 12
Edgewater, NJ 07020
Frances Katz Levine(3) 1,250,000 5
115 River Road, Bldg. 12
Edgewater, NJ 07020
- ---------------
(1) Includes 3,250,000 shares issued to RSL pursuant to the RSL Agreement and an
aggregate of additional 2,990,402 shares, transferred to RSL by Messrs. Peacock
and Chapman, for the nominal consideration of $.0001 per share. All of such
shares were transferred by RSL to the Patchouli Foundation on January 17, 1995.
Both RSL and the Patchouli Foundation are under the control of Adrian P. Kirby
and such transfer was therefore deemed not to involve a change in beneficial
ownership.
(2) Includes 6,240,402 shares beneficially owned by the Patchouli Foundation;
Mr. Kirby may be deemed to be a beneficial owner of such shares through the
investment and voting powers which Mr. Kirby was over such shares through his
position as attorney-in-fact for the administrator of the Patchouli Foundation.
(3) Issued in September 1994 in partial satisfaction of unpaid fees for legal
services rendered and unreimbursed expenses incurred.
Security Ownership of Management
The following table sets forth information with respect to the share
ownership, as of March 31, 1996, of each person who served as an executive
officer and/or director of Registrant during the fiscal year ended December 31,
1994, individually and as a group.
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership Percent of Class(1)
------------------- -------------------- -------------------
Adrian P. Kirby 6,240,402 25.0
All directors and officers as a group 6,565,402 26.3
(3 persons)
- ---------------
(1) Based upon 24,999,236 shares of common stock, $.01 par value, issued and
outstanding as of March 31, 1996.
Changes in Control
On September 9, 1994, RSL acquired 25% of the issued and outstanding
stock of Registrant. On October 1, 1994, changes in the management of Registrant
made pursuant to such stock acquisition took effect. See the discussion thereof
contained in the subtopic "RSL Agreement" in Item 1 of this Report. Registrant
is not aware of any arrangements which may at a subsequent date result in a
change in control of Registrant.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions and Business Relationships with Management
Settlements with Officers and Directors. Registrant was unable in
varying degrees to meet its financial obligations under the service and
employment agreements. As a result, Registrant accrued contractual liabilities
arising from unpaid salaries and unreimbursed expenses. In connection with the
RSL Agreement, Registrant entered into separate settlement agreements with the
contracting parties under the respective service and employment agreements.
Specifically, Messrs. Galgey, Peacock, Chapman, Tandet and Kuekner entered into
separate settlement and release agreements with Registrant whereby they
accepted, in full and final settlement of any claims they may have had against
Registrant respecting accrued but unpaid compensation and reimbursable expenses,
shares of Registrant's common stock, valued at approximately $.06 per share, as
follows:
Amount of Number of
Name Liability Shares Issued
---- --------- -------------
Terence G. Galgey $83,352 1,250,000
William J. Peacock 98,103 1,575,000
Peter N. Chapman 100,648 1,625,000
Carl Kuehner 46,354 800,000
In addition, Registrant agreed to issue 500,000 shares to Mr. Tandet,
at such time as Registrant's certificate of incorporation is amended so as to
increase its authorized capital stock, in consideration of Mr. Tandet's agreeing
to render extensive legal services in connection with certain litigation matters
of Registrant and its subsidiary LPPL Corp.
Loan From Affiliate. During the year ended December 31, 1995 and the
period subsequent thereto, the Patchouli Foundation his made loans to Registrant
to cover costs and expenses incurred in connection with various corporate
activities, including without limitation, legal, accounting, and filing fees
incurred in connection with the preparation of Registrants annual reports on
Form's 10-K for the years ended December 31, 1993 and 1994 and the proxy
statement for the Special Meeting of Shareholders held on February 29, 1996. As
of December 31, 1995 such loans were $92,355.
Relationship Between the Company and Atlantic Properties, Ltd.
On February 15, 1995, the Company's current officers and directors,
founded Atlantic Properties, Ltd., a Delaware corporation, for the purpose of
engaging in business of acquiring, developing, re-developing, owning, selling,
leasing and managing residential leisure and other types of real estate
properties. In consideration of the services rendered and unreimbursed expenses
incurred in connection with its organization, Atlantic Properties, Ltd. issued
105,000 shares, constituting approximately 2.5% of its total issued and
outstanding common stock to the Company. On March 30, 1995, Atlantic Properties,
Ltd. filed a registration statement on Form S-11 with the Securities and
Exchange Commission (SEC File No. 33-90790), which was declared effective on
November 11, 1995. The 105,000 shares owned by the Company were included therein
to be registered under the Securities Act of 1933, as amended, for distribution,
on a pro rata basis, to the holders of Company's common stock of record, on a
date to be determined, at the rate of one share of common stock for every two
hundred thirty-eight (238) shares of the Company's Common Stock, without any
Consideration being paid by such shareholders. Notwithstanding the foregoing,
any person who holds Shares of the Company as of the initial record date in an
amount of less than two hundred thirty-eight (238) will receive one share of
Atlantic Properties, Ltd. common stock.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this Report.
Financial Statements. See Index to financial statements on page F-1 of
this Report.
Exhibits. Exhibits filed as part of this report are as follows (for
electronic filing purposes only, this report contains Exhibit 27,
Financial Data Schedule):
Exhibit No. Description
- ----------- -----------
2.1(1) Offer Document relating to the Recommended Offers by RAS
Securities Corp. on behalf of Little Prince Productions, Ltd. to
acquire the entire issued share capital of Tyne River Properties
plc and Notice of Extraordinary General Meeting of Tyne River
Properties plc
2.2(1) Announcement; dated November 16, 1992, by RAS Securities Corp.
respecting valid acceptances of the Exchange Offer (mailed to TRP
shareholders)
2.2(1) Agreement and Plan of Merger dated February 9, 1996, between
Registrant and Atlantic Industries, Inc.
3.1* Certificate of Incorporation, as amended
3.2* Bylaws
4.1* A description of the rights of the Registrant's shareholders is
contained in the Certificate of Incorporation, as amended, filed
as Exhibit 3.1 and is incorporated herein by reference.
10.1(1) Agreement, dated October 21, 1992, by and among Little Prince
Productions, Ltd., Tyne River Properties plc, Terence G. Galgey,
William J. Peacock, and Peter N. Chapman
10.2(1) Letter, dated November 16, 1992, from the directors of TRP to
Registrant consenting to Registrant's declaring the Exchange Offer
unconditional and delivering certificate from Barclays Registrars
respecting the receipt of acceptances of the Exchange Offer from
the holders of 90.38% of the TRP Ordinary shares, and 100% of the
TRP Founder and Deferred Shares
10.3(2) Agreement, dated August 22, 1994, between Little Prince
Productions, Ltd. and Riparian Securities Limited
- ---------------
*Filed herewith.
(1) Filed with the Securities and Exchange Commission as an exhibit, to
Registrant's Form 10-K, dated November 16, 1992, which exhibit is incorporated
herein by reference.
(2) Filed with the Securities and Exchange Commission as an exhibit, to
Registrant's Form 8-K, dated August 22, 1994, which exhibit is incorporated
herein by reference.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed by Registrant during the last
quarter of the period covered by this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
LITTLE PRINCE PRODUCTIONS, LTD.
May 3, 1996 By /s/ Adrian P. Kirby
-------------------
ADRIAN P. KIRBY, Chairman of the
Board, Chief Executive Officer and
President
In accordance with the Securities Exchange Act of 1934, this report has
been signed by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.
May 3, 1996 By /s/ Adrian P. Kirby
-------------------
ADRIAN P. KIRBY, Chairman of the
Board, Chief Executive Officer and
President
May 3, 1996 By /s/ Peter N. Chapman
--------------------
PETER N. CHAPMAN, Director,
Treasurer and Secretary
May 3, 1996 By /s/ Robert D. Evans
-------------------
ROBERT D. EVANS, Director and
Executive Vice President
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
December 31, 1995
-----------------------------------------------------
TABLE OF CONTENTS
-----------------------------------------------------
Independent Auditor's Report..............................................F-2
Financial Statements:
Consolidated Balance Sheets......................................F-3
Consolidated Statements of Operations............................F-4
Consolidated Statement of Shareholders Deficit.................. F-5
Consolidated Statements of Cash Flows............................F-6
Notes to Financial Statements....................................F-8
F-1
<PAGE>
Independent Auditor's Report
The Directors and Shareholders,
Little Prince Productions, Ltd.
We have audited the consolidated balance sheets of Little Prince Productions,
Ltd.. and subsidiaries at 31st December 1995 and 1994 and the related
consolidated statements of operations, shareholders' deficit and cash flows for
each of the three years ended 31st December 1995. 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 audits.
We conducted our audits 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 statements presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Little Prince
Productions, Ltd.. and subsidiaries as at 31st December 1995 and 1994, and the
consolidated results of their operations and cash flows for each of the three
years ended 31st December 1995, in conformity with generally accepted accounting
principles.
/s/ Moore Stephens, LLP
New York, New York
3rd May, 1996
F-2
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Consolidated Balance Sheets
31st December 31st December
1995 1994
---- ----
$ $
Assets
Current Assets
Cash and cash equivalents 946 5,241
Investment in US Government Bond Fund -0- 10,900
Prepaid expenses and taxes 612 612
Other debtors 6,629 23,700
----------- -----------
Total Current Assets 8,187 40,453
----------- -----------
Other Assets
Production rights 5,000 7,500
Investment in joint ventures 3,728 3,728
----------- -----------
Total Other Assets 8,728 11,228
----------- -----------
Total Assets 16,915 51,681
=========== ===========
Liabilities and Shareholders' Deficit
Current Liabilities
Accounts payable 159,145 159,145
Accrued professional fees 32,826 55,000
Due to shareholder 92,355 -0-
----------- -----------
Total Current Liabilities 284,326 214,145
----------- -----------
Shareholders' Deficit
Common stock $0.01 par value
Authorized - 25,000,000 shares
Issued and outstanding - 24,999,236 shares 249,992 249,992
Additional paid-in capital 3,006,891 3,006,891
Accumulated deficit (3,524,294) (3,419,347)
----------- -----------
Total Shareholders' Deficit (267,411) (162,464)
----------- -----------
Total Liabilities and Shareholders' Deficit 16,915 51,681
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Consolidated Statements of Operations
<TABLE>
<CAPTION>
Year ended 31st December
----------------------------------------------
1995 1994 1993
---- ---- ----
$ $ $
<S> <C> <C> <C>
Net Sales 20,779 7,029 12,726
Operating costs (125,726) (102,434) (189,594)
------- -------- --------
Loss from continuing operations (104,947) (95,405) (176,868)
Interest income -0- 663 698
-------- ------- --------
Loss from operations before (104,947) (94,742) (176,170)
provision for income taxes
Provision for income taxes -0- -0- -0-
------- ------- ---------
Loss from continuing operations after (104,947) (94,742) (176,170)
provision for income taxes
Discontinued Operations
Loss from discontinued operations -0- (324,878) (2,195,149)
Gain on disposal of subsidiary -0- 287,428 -0-
-------- -------- ---------
Net Loss (104,947) (132,192) (2,371,319)
======= ======= =========
Loss per share:
Continuing Operations (0.004) (0.01) (0.01)
Discontinued Operations 0.00 (0.02) (0.16)
Gain on disposal of subsidiary 0.00 0.02 0.00
---- ---- ----
Net Loss (0.004) (0.01) (0.17)
======= ====== ======
Average number of shares outstanding 24,999,236 16,711,564 13,999,236
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
Little Prince Productions, Ltd.
an Subsidiaries
Consolidated Statements of Shareholders' Deficit
<TABLE>
<CAPTION>
Common Stock
Foreign
Number Additional Currency
of Paid-in Translation Accumulated
Shares Amount Capital Adjustment Deficit Total
------ ------ ------- ---------- ------- -----
$ $ $ $ $
<S> <C> <C> <C> <C> <C> <C>
Balance - 31st December 1992 13,999,236 139,992 2,621,735 (246,168) (647,932) 1,867,627
Translation adjustment - - - (21,736) - (21,736)
Net loss for the year - - - - (2,371,319) (2,371,319)
----------- ------------ ------------- --------------- ----------- -----------
Balance - 31st December 1993 13,999,236 139,992 2,621,735 (267,904) (3,019,251) (525,428)
Issuance of ordinary shares
- 3rd October 1994 11,000,000 110,000 385,156 - - 495,156
Transfer through reserves on
disposal of subsidiary - - - 267,904 (267,904) -0-
Net loss for the year - - - - (132,192) (132,192)
----------- ------------ ------------- --------------- --------- ---------
Balance - 31st December 1994 24,999,236 249,992 3,006,891 -0- (3,419,347) (162,464)
Net loss for the year - - - - (104,947) (104,947)
----------- ------------ ------------- --------------- --------- ---------
Balance - 31st December 1995 24,999,236 249,992 3,006,891 -0- (3,524,294) (267,411)
========== ======= ========= ============= =========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Year ended 31st December
-----------------------------------
1995 1994 1993
---- ---- ----
$ $ $
<S> <C> <C> <C>
Operating Activities
Net loss (104,947) (132,192) (2,371,319)
Adjustments to reconcile net loss to
Net Cash Provided by Operating Activities:
Depreciation and amortization 2,500 3,048 36,090
Bad debt expense 18,930
Effect of foreign currency exchange rate
changes on cash and cash equivalents -0- -0- 25,019
Adjustment on disposal of fixed assets -0- -0- (148)
Minority interests -0- 12 (3,799)
Capitalization of interest as development
properties cost -0- -0- 207,678
Adjustment on disposal of subsidiary -0- (287,428) -0-
Change in Assets and Liabilities:
(Increase)/Decrease in Assets:
Accounts Receivable and other debtors (1,859) 94,413 1,951,428
Development properties -0- 406,163 2,522,337
Increase/(Decrease) in Liabilities:
Accounts payable and other current liabilities: (22,174) 151,640 (1,026,516)
Due to shareholder 92,355 -0- -0-
United Kingdom Corporation Tax refunds -0- -0- 13,579
------- ------- ---------
Net Cash Provided/(Used) -
Operating Activities (15,195) 235,656 1,354,349
------- ------- ---------
Investing Activities:
Proceeds on disposal of assets -0- -0- 148
Capital expenditure -0- -0- (703)
Purchase of US Government Bonds -0- -0- (20,000)
Proceeds on disposal of subsidiary -0- 1 -0-
Proceeds on disposal of US Government Bonds 10,900 9,100 -0-
Investment in joint venture -0- (3,000) -0-
Cash released on disposal of subsidiary -0- (2,290) -0-
-------- ----------- ---------
Net Cash Provided/(Used) -
Investing Activities 10,900 3,811 (20,555)
------ ----- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Consolidated Statements of Cash Flows
(Continued)
<TABLE>
<CAPTION>
Year ended 31st December
------------------------
1995 1994 1993
---- ---- ----
$ $ $
Financing Activities
<S> <C> <C> <C>
Issuance of common stock -0- 32,500 -0-
New short term loans -0- -0- -0-
Repayment of loans -0- (315,283) (1,360,235)
Bank overdrafts -0- 18,624 -0-
-------- --------- -----------
Net Cash Used - Financing Activities -0- (264,159) (1,360,235)
-------- --------- -----------
Net Decrease in Cash and Cash Equivalents (4,295) (24,692) (26,441)
Cash and Cash Equivalents -
Beginning of Years 5,241 29,933 56,374
-------- --------- ----------
Cash and Cash Equivalents - End of Years 946 5,241 29,933
======== ========= ==========
</TABLE>
Supplemental Disclosure
- -----------------------
During 1994, 7,750,000 common shares of $0.01 each were issued in respect of
cancellation of liabilities amounting to $462,657.
1995 1994 1993
---- ---- ----
$ $ $
Cash paid during the year for:
Interest (net of amount capitalized) -0- 34 876
- ---------
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
1. Summary of Significant Accounting Policies
The Company/Business Combination
The Company's principal business is real estate, including acquiring,
developing, selling, leasing and managing, mainly in the United
Kingdom. In 1995 the Company was inactive except for administration
activities in connection with its required filings. LPPL Corp., its
wholly-owned subsidiary, is involved in the presentation of theatrical
performances. All of the revenue earned in 1995 was from royalties in
connection with these productions.
The accompanying consolidated financial statements give effect to the
business combination of Little Prince Productions, Ltd. and Tyne River
Properties plc as a reverse acquisition on 16th November 1992 under the
purchase method of accounting. Tyne River Properties plc was as at 31st
December 1993 a subsidiary of Little Prince Productions, Ltd.. On 29th
March 1994, Tyne River Properties plc and all other United Kingdom
subsidiaries were sold for (pound)1 (see note 5). The financial results
in respect of each of the two years ended 31st December 1994 have been
restated so as to show the financial results of Tyne River Properties
Plc as a discontinued operation. The financial results included in
respect of Tyne River Properties Plc are for the year ended 31st
December 1993, and for the period up to 29th March 1994.
On 16th November 1992 Little Prince Productions, Ltd. acquired 100% of
the issued share capital of Tyne River Properties plc, a company
incorporated in the United Kingdom, in exchange for 11,899,236 shares
of Little Prince Productions, Ltd. common stock, comprising upon their
issuance, approximately 85% of the common stock of the Company, issued
and outstanding. Due to the relative size of the companies, Tyne River
Properties plc was deemed the purchaser. For accounting purposes, the
acquisition was treated as a recapitalization of Tyne River Properties
plc with Tyne River Properties plc the acquirer (reverse acquisition).
As at 31st December 1993 Tyne River Properties plc owned all of the
issued and outstanding capital stock of the following companies, all of
which are incorporated in England, and whose principal activity was
property development, unless otherwise indicated:
Exchange Buildings Limited
Pandon Developments Limited
Selective Construction Projects plc (88.8% interest)
Period and Country Estates Limited (Dormant)
The accompanying consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries. Intercompany
transactions and balances have been eliminated on consolidation.
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
(Continued)
1. Summary of Significant Accounting Policies (con't)
Management Estimates
The preparation of these financial statements in accordance with
generally accepted accounting principles requires the use of management
estimates.
Depreciation
Fixtures and fittings are depreciated over four years on the straight
line basis.
Development Properties
Development properties are included in the balance sheet date at the
lower of cost (including attributable interest and overheads) and net
realizable value.
Production Rights
Production rights are amortized by systematic charges to income over
the estimated remaining life of such rights pursuant to APB17 and the
provisions of FAS63. Usually capitalized rights are amortized based on
the estimated number of future showings, however, the rights provide
for unlimited showings over the period of the agreement and in
management's opinion, the estimated number of future showings are not
determinable. Where applicable, an additional charge is made in order
to write down the value of the rights to their perceived value.
Foreign Currency Translation
Balance sheet amounts denominated in United Kingdom sterling have been
translated into U.S. dollars using the year end rate of exchange.
Operational results denominated in United Kingdom sterling have been
translated into U.S. Dollars using the average annual rate of exchange.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents.
The accompanying notes are an integral part of these
financial statements.
F-9
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
(Continued)
2. Net Sales
Net sales comprised: 1995 1994 1993
---- ---- ----
$ $ $
Royalty income 20,779 7,029 12,726
====== ===== ======
Virtually all royalty income is derived from one payer. The income
arises from the Company's interest in various theatrical productions.
3. Interest Income
1995 1994 1993
---- ---- ----
$ $ $
Bank interest -0- 663 698
=== === ===
4. Provision for Income Taxes
No liability to income taxes arises due to the losses of the Company
and its subsidiary.
As of January 1, 1993 the Company adopted Statement of Accounting
Standards No. 109 ("FAS 109"), Accounting for Income Taxes. In prior
years the Company followed the provisions of Accounting Principles
Board Opinion 11. Prior year financial statements have not been
restated to reflect the provisions of FAS 109.
No cumulative effect of the change in accounting principle to FAS 109
is recorded in the statement of operations as the gross deferred asset
resulting from the change has been offset by a valuation allowance of
the same amount. The gross asset of $1,202,000 in 1995 ($1,160,000 in
1994) arises from net operating loss carryovers; however, management
believes that there will not be enough taxable income in the future to
utilize the losses and therefore a valuation allowance has been
established for the full amount of the asset.
The accompanying notes are an integral part of these financial statements.
F-10
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
(Continued)
4. Provision for Income Taxes (con't)
The Company has approximately $3,015,400 of net operating losses which
can be used to offset future federal taxable income. The losses expire
as follows:
$
1996 671,000
1997 50,000
1998 14,200
1999 12,600
2003 236,400
Thereafter 2,031,200
---------
3,015,400
=========
5. (Loss)/Income from Discontinued Operations
(Loss)/income from discontinued operations relates to the financial
results of Tyne River Properties Plc., which company was sold on 29th
March 1994. The results comprised:
1994 1993
---- ----
$ $
Net sales:
Sale of properties 524,175 3,062,958
Rental income 1,222 28,307
------- ---------
524,297 3,091,265
Operating costs:
Provision of foreseeable losses on
development contracts (509,190)
Write down of land and buildings held for
development to net realizable value (152,494)
Other operating costs (849,365) (4,744,123)
------- ---------
(849,365) (5,405,807)
------- ---------
The accompanying notes are an integral part of these financial statements.
F-11
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
(Continued)
5. (Loss)/Income from Discontinued Operations (con't)
1994 1993
---- ----
$ $
(Loss)/Income from operations (325,068) (2,314,542)
Interest income 212 3,370
Interest expense (34) (876)
-------- ---------
(Loss)/Income before provision for income taxes (324,890) (2,312,048)
Provision for income taxes -0- 113,056
-------- ---------
(Loss)/income after provisions for income taxes (324,890) (2,198,992)
Minority interests 12 3,843
-------- ---------
Net (loss)/income (324,878) (2,195,149)
========= =========
Interest Costs: 1994 1993
---- ----
$ $
On bank loans and overdrafts 74,042 404,459
On other loans 34 876
-------- --------
74,076 405,335
Transfer to development properties (note 7) (74,042) (404,459)
--------- --------
Interest expense 34 876
========= =======
Provision for Income Taxes: 1994 1993
---- ----
$ $
United Kingdom corporation tax on profits for the
year at 33% -0- -0-
United Kingdom corporation tax recoverable -0- 113,056
--------- --------
-0- $113,056
========= ========
The accompanying notes are an integral part of these financial statements.
F-12
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
(Continued)
6. Investment in US Government Bond Fund
The investment in the US Government Bond Fund relates to an
investment in a mutual fund comprised of short term debt securities
issued by the US Treasury and other US Government agencies. As a mutual
fund, the investment has no stated maturity date.
On 1st January 1994, the Company adopted Statement of
Accounting Standards No. 115 (FAS 115), Accounting for Certain
Investments in Debt and Equity Securities; the cumulative effect of the
change in accounting principle was immaterial. The investment is
classified as available for sale securities. The entire investment was
sold in 1995 with no resulting gain or loss. At 31st December 1994 cost
approximates market. During 1994 there were no material gross
unrealized gains.
7. Development Properties
1994 1993
---- ----
$ $
Development properties -0- 3,229,950
Land held for development -0- 318,200
--- ---------
-0- 3,548,150
=== =========
Cumulative interest included in
development properties -0- 894,941
On 29th March 1994 Tyne River Properties plc and all other
United Kingdom subsidiaries were sold.
8. Production Rights
On 4th April 1980, the then President of the Company assigned
to the Company all of the Rights relating to theatrical productions
which he had received, in connection with an agreement with TLP
Productions, Ltd., Editions Gallimard and Solifilm S.A. Such Rights and
the related value of the shares then issued were recorded in the
Company's books at $80,000 plus additional costs of $6,500 for an
extension of the Rights and legal fees totalling $86,500. These Rights
were subsequently transferred to LPPL Corp. As at 31st December 1995,
the unamortized portion of the Rights was $5,000. (1994: $7,500 after a
write down of $28,925 in 1993).
The accompanying notes are an integral part of these financial statements.
F-13
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
(Continued)
9. Mortgage and Bank Loans
The mortgage loan was a revolving facility and was secured on
a development property. No repayment date was set for this facility.
Interest was charged at the prevailing United Kingdom base mortgage
rate as charged to owner occupiers plus 2 per cent.
The bank loan was secured on a development property. No fixed
maturity date existed, but the loan was repayable on demand. Interest
was charged at the prevailing United Kingdom bank base rate plus 2 1/2
per cent.
1994 1993
---- ----
Mortgage Loan
Maximum amount outstanding ((pound)) 1,700,398 2,806,857
Weighted average interest rate (%) 10.3 10.6
Weighted average loan balance ((pound)) 1,566,310 1,768,265
Weighted average interest by value (%) 10.3 10.6
Bank Loan
Maximum amount outstanding ((pound)) 488,733 488,733
Weighted average loan balance ((pound)) 488,733 488,733
Due to the nature of the bank loan whereby interest is charged
directly to the bank account, no details of the weighted average
interest rate and weighted average interest rate by value have been
calculated.
On 29th March 1994, Tyne River Properties plc was sold and
consequently the mortgage no longer remains within the group.
The accompanying notes are an integral part of these financial statements.
F-14
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
(Continued)
10. Related Parties
1995 1994 1993
---- ---- ----
$ $ $
Transactions with related parties comprised:
Emoluments $18,500 $43,229 $56,250
Consideration to third parties for
making available the services of
directors 14,500 171,355 264,375
Other payments -0- -0- 35,766
------ ------- -------
$33,000 $214,584 $356,391
====== ======= =======
The accompanying notes are an integral part of these financial statements.
F-15
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
(Continued)
10. Related Parties (con't)
Transactions with related parties are as follows:
1995 1994 1993
---- ---- ----
$ $ $
Mr. A.P. Kirby -0- -0- -0-
Mr. C.N.C. Jones -0- -0- -0-
Mr. T. Galgey -0- 61,979 95,625
Mr. W.J. Peacock -0- 54,688 120,141
Mr. P.N. Chapman 14,500 54,688 84,375
Mr. J. Tandet 18,500 25,000 28,125
Mr. C. Kuehner -0- 18,229 28,125
-------- -------- --------
$33,000 $214,584 $356,391
====== ======= =======
Mr. W.J. Peacock was a director of the Company until his
resignation in August 1994. Oform Associates Limited, a company
incorporated in England, of which Mr. W.J. Peacock is a minority
shareholder and non-executive director, provided project management,
engineering, design and costing services in respect of the development
projects carried out by Pandon Developments Limited (a subsidiary of
the Company) and was entitled to receive 5.5 per cent of the
construction costs of the project (capped at (pound)6,000,000;
$8,880,000 at 1993 year end exchange rates). During the year ended 31st
December 1993, $35,766 was paid in respect of these services. From this
sum, disbursements were made to the Consulting Engineers and Quantity
Surveyors employed by Oform Associates Limited for the provision of
their services as follows: the Consulting Engineers were entitled to
receive 0.67 per cent of the construction costs of the project and
Quantity Surveyors were entitled to receive 1.0035 per cent of the
construction costs (capped at (pound)6,000,000; $8,880,000 at 1993 year
end exchange rates) from the fee paid to Oform Associates Limited.
Fees payable in respect of consultancy services provided by
Mr. W.J. Peacock in 1994 amounted to $54,688 (1993: $84,375) (see note
17).
Mr. T. Galgey was a director of the Company until his
resignation in August 1994. Galgey Financial Services Limited, of which
Mr. T. Galgey is a director and shareholder, provided consultancy
services to the Group. Fees payable in respect of such services in 1994
amounted to $61,979 (1993: $95,625) (see note 17).
Mr. P.N. Chapman is a director of the Company. Chapman &
Chapman, a firm of Chartered Accountants in which Mr. P.N. Chapman is a
partner, provided consultancy and accounting services to the Group.
Fees payable in respect of such services in the year amounted to
$14,500 (1994: $54,688; 1993: 84,375) (see note 17).
The accompanying notes are an integral part of these financial statements.
F-16
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
(Continued)
10. Related Parties (con't)
LPPL Corp. maintains its office at 555 Fifth Avenue, New York,
N.Y., the office of Mr. J. Tandet, who was the President of the Company
until his resignation in August 1994. Mr. Tandet receives no
remuneration for this facility from the Company or from LPPL Corp. Fees
payable in respect of his services as a director in the year and for
managing the affairs of the Company's operating subsidiary, LPPL Corp,
amounted to $18,500 (1994: $25,000; 1993: $28,125) (see note 18). In
addition, a noninterest bearing advance of $6,629 (1994: $2,000) has
been made to Mr. Tandet. This amount is included with Other debtors on
the balance sheet.
Mr. C. Kuehner was a director of the Company until his
resignation in August 1994. Fees payable in respect of such services in
1994 amounted to $18,229 (1993: $28,125) (see note 17).
A 25% shareholder has paid $92,355 to creditors on behalf of
the Company.
11. Litigation Settlement Agreements
On 18th December 1990, an action against Little Prince
Productions, Ltd. commenced before the Tribunal de Grande Instance of
Paris, France. The Plaintiff was seeking a judicial declaration of the
termination of an agreement, along with reimbursement of all sums
received and damages and legal fees of approximately $200,000. In
February 1992, an agreement was reached to settle the above matter
whereby Little Prince Productions, Ltd. was to receive $200,000 in
return for giving up certain foreign rights to the "Rights" as follows:
$50,000 receivable upon full performance of the Settlement Agreement
and four receipts of $25,000 each every three months thereafter with a
final receipt of $50,000 by November 1993. This settlement was fully
satisfied in 1995.
The Settlement also stipulated that the Company must abandon
the corporate name "Little Prince Productions, Ltd." within 18 months
from 6th February 1992. As at the date of the signing of these
financial statements, the name of the Company has not been changed nor
has any action been commenced by the plaintiff. The Company's former
Counsel for a rescinded business combination instituted a lawsuit for
legal fees of $81,000 in connection therewith. The Company filed a
counterclaim against the plaintiff. In December 1992, all parties
entered into a settlement agreement and in March 1993, the Group paid
$25,000 in full settlement of this matter.
In connection with the Group's 41% investment in the
production of the musical play "Hearts Desire", the Cleveland Playhouse
brought an action in the United States District Court for the Northern
District of Ohio for the total sum of $75,000. The litigation was
settled for $73,000 in April 1993, with $29,930 applicable to the Group
and paid in 1993.
The accompanying notes are an integral part of these financial statements.
F-17
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
(Continued)
12. Royalty Agreements
On 31st December 1992, LPPL Corp. authorized Theatreworks USA
Corp, a New York stage production company which produces plays for
family audiences, to produce a new musical stage production based upon
the literary work entitled 'The Little Prince' ('the Work') and geared
specifically for a juvenile audience. LPPL Corp. was paid $5,000 in
January 1993 as an advance against two per cent (2%) of all gross
revenues derived by Theatreworks from the production.
No production has yet been mounted.
On 1st December 1992 LPPL Corp. authorized two independent
theatrical producers to produce another new musical stage production
based upon the Work, in New York by 31st December 1993, geared for an
adult audience. LPPL Corp. received a $2,000 advance in May 1993
against royalties of 1 1/2 per cent of gross weekly box office receipts
increasing to 2% upon recoupment of production costs derived from the
production. A production was mounted for one week in October 1993. The
show was subsequently closed in order to move to a more suitable
location and was reopened on 13th November 1993.
Pursuant to the terms of their respective agreements with LPPL
Corp, the two productions will not be staged at the same time or in the
same location.
13. Other Debtors
The following components of Other Debtors comprised at least
5% of total current assets:
1995 1994
---- ----
$ $
Due from A. J. Tandet 6,629 2,000
Due from Riparian Securities Limited -0- 2,770
Due from former joint venture partner -0- 18,930
----- ------
6,629 23,700
===== ======
14. Post Balance Sheet Events
A proxy statement was filed with the Securities and Exchange
Commission in February 1996 detailing, among other things, a special
meeting of shareholders to be held on February 29, 1996. At this
meeting, the following resolutions were passed: to change the Company's
state of incorporation from New York to Colorado by means of a merger
of the Company into Atlantic; to authorize a ten for one reverse stock
split and an increase in a number of authorized shares of the Company
from 25,000,000 to 50,000,000; to sell the Company's interest in the
common stock and its wholly owned subsidiary, LPPL Corp., to an
independent third party; to authorize the Board of Directors of the
Company to vote to dissolve LPPL Corp.
The accompanying notes are an integral part of these financial statements.
F-18
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
(Continued)
15. Additional Information on Cash Flows
1994
----
$
Disposal of subsidiary
Cash and cash equivalents (2,290)
Development properties (3,141,987)
Accounts receivable and other debtors (33,263)
Property and equipment (1,415)
Accounts payable and accrued income 437,804
Loans 2,924,631
Bank overdraft 18,626
Minority shareholders' interest 85,321
---------
287,427
Proceeds of disposal 1
---------
Gain on disposal 287,428
=========
16. Currency Translation Adjustment
Changes in the currency translation adjustment included in the
Shareholders' deficit section of the Consolidated Balance Sheet are as
follows:
1995 1994 1993
---- ---- ----
$ $ $
Currency translation adjustment 1st January -0- (267,904) (246,168)
Translation adjustments -0- -0- (21,736)
Adjustment through reserves -0- 267,904 -0-
------ -------- -------
Currency translation adjustment 31st December -0- -0- (267,904)
====== ======== =======
The accompanying notes are an integral part of these financial statements.
F-19
<PAGE>
Little Prince Productions, Ltd.
and Subsidiaries
Notes to the Financial Statements
31st December 1995
(Continued)
17. Major Shareholdings
On August 22, 1994, the Company entered into certain agreements (the
"Agreements") with Riparian Securities Limited ("Riparian"), a firm of
professional advisers and the then directors of the Company. Pursuant to these
Agreements, a total of 11 million shares of the Registrant's common stock were
issued for $495,156. Of the 11 million shares, a total of 7,750,000 were issued
to the following individuals and entities in settlement of liabilities totalling
$462,656:
Amount of Number of
Name Liability Shares issued
---- --------- -------------
$
Terence G. Galgey 83,352 1,250,000
William J. Peacock 98,103 1,575,000
Peter N. Chapman 100,648 1,625,000
Carl Kuehner 46,354 800,000
John Milling 134,199 2,500,000
The remaining 3,250,000 shares were issued to Riparian for
$32,500. Subsequent to August 22, 1994, Riparian acquired an additional
3,000,000 shares of common stock, resulting in Riparian owning 25% of
the issued and outstanding common stock of the Company. On January 17,
1995 Riparian transferred its entire holding to the Patchouli
Foundation, a Liechtenstein Stiftung. As of April 3, 1996, the
Patchouli Foundation owned 25% of the issued and outstanding common
stock of the Company.
The Agreements also required, among other things, that Messrs.
Galgey, Peacock, Kuehner and Tandet resign as directors of the Company,
and that Messrs. Kirby and Jones be appointed as directors.
The Company also entered into an agreement on August 22, 1994
to issue 500,000 shares to Mr. J. Tandet, at such time as the Company's
certificate of incorporation is amended so as to increase its
authorized capital stock, in consideration of Mr. Tandet's agreement to
render extensive legal services in connection with certain litigation
matters of the group. At the date of the signing of these financial
statements, these shares have not been issued. In conjunction with the
shareholders' authorizing a ten for one reverse stock split and an
increase in the authorized shares, Mr. Tandet will receive 50,000
shares when these are issued (see Note 14).
The accompanying notes are an integral part of these financial statements.
F-20
<PAGE>
EXHIBIT INDEX
Certain of the following exhibits, designated with an asterisk (*), are
filed herewith. The exhibits not so designated have been filed previously and
are incorporated herein by reference to the documents indicated in brackets
following the descriptions of such exhibits (for electronic filing purposes
only, this report contains Exhibit 27, Financial Data Schedule).
Exhibit No. Description
- ----------- -----------
2.1(1) Offer Document relating to the Recommended Offers by RAS
Securities Corp. on behalf of Little Prince Productions, Ltd. to
acquire the entire issued share capital of Tyne River Properties
plc and Notice of Extraordinary General Meeting of Tyne River
Properties plc
2.2(1 Announcement; dated November 16, 1992, by RAS Securities Corp.
respecting valid acceptances of the Exchange Offer (mailed to TRP
shareholders)
2.3* Agreement and Plan of Merger dated February 9, 1996, between
Registrant and Atlantic Industries, Inc.
3.1* Certificate of Incorporation, as amended
3.2* Bylaws
4.1* A description of the rights of the Registrant's shareholders is
contained in the Certificate of Incorporation, as amended, filed
as Exhibit 3.1 and is incorporated herein by reference.
10.1(1) Agreement, dated October 21, 1992, by and among Little Prince
Productions, Ltd., Tyne River Properties plc, Terence G. Galgey,
William J. Peacock, and Peter N. Chapman
10.2(1) Letter, dated November 16, 1992, from the directors of TRP to
Registrant consenting to Registrant's declaring the Exchange Offer
unconditional and delivering certificate from Barclays Registrars
respecting the receipt of acceptances of the Exchange Offer from
the holders of 90.38% of the TRP Ordinary shares, and 100% of the
TRP Founder and Deferred Shares
10.3(2) Agreement, dated August 22, 1994, between Little Prince
Productions, Ltd. and Riparian Securities Limited
- ---------------
*Filed herewith.
(1) Filed with the Securities and Exchange Commission as an exhibit, to
Registrant's Form 10-K, dated November 16, 1992, which exhibit is incorporated
herein by reference.
(2) Filed with the Securities and Exchange Commission as an exhibit, to
Registrant's Form 8-K, dated August 22, 1994, which exhibit is incorporated
herein by reference.
EXHIBIT 2.3
Agreement and Plan of Merger dated February 9, 1996,
between Registrant and Atlantic Industries, Inc.
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Merger Agreement") dated as of
February 9, 1996, by and between Little Prince Productions, Ltd., a New York
corporation ("Little Prince"), and Atlantic Industries, Inc., a Colorado
corporation and a wholly owned subsidiary of Little Prince ("Atlantic").
W I T N E S S E T H:
WHEREAS, Little Prince has an authorized capitalization of (a)
25,000,000 shares of common stock, par value $.01 per share ("LP Common"), of
which 24,999,236 shares are issued and outstanding on the date hereof and (b) no
shares of Preferred Stock;
WHEREAS, Atlantic has an authorized capitalization of (a) 40,000,000
shares of Common Stock, par value $.01 per share ("Atlantic Common"), of which
100 shares are issued and outstanding as of the date hereof and all of such
shares are held by Little Prince, and (b) 10,000,000 shares of Preferred Stock,
none of which are issued and outstanding;
WHEREAS, the respective Boards of Directors of Little Prince and
Atlantic deem it advisable and in the best interest of each such corporation and
its stockholders that Little Prince reincorporate in Colorado by means of a
merger of such corporations as herein contemplated, and, in accordance
therewith, that Little Prince be merged into Atlantic in the manner contemplated
herein (the "Merger"), with Atlantic surviving and that the LP Common be
exchanged for Atlantic Common, on the basis of one share of Atlantic Common for
every 10 shares of LP Common, with the result that the holders of LP Common will
become the holders of Atlantic Common upon consummation of the transactions
provided for herein, and that such Merger be submitted to and approved and
adopted by the holders of LP Common and by Little Prince as sole stockholder of
Atlantic;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and subject to the conditions herein
set forth and for the purpose of stating the terms and conditions of the Merger,
the mode of effecting the same, the manner of converting the shares of LP Common
issued and outstanding immediately prior to the filing of the Articles of Merger
and the Certificate of Merger with the Secretary of the State of the State of
Colorado and with the Department of State of the State of New York, respectively
(the date and time of the last to occur of such filings being herein called the
"Effective Date"), into shares of Atlantic Common, the manner of exchanging the
shares of LP Common issued and outstanding immediately prior to the Effective
Date for shares of Atlantic Common, and such other details and provisions as are
deemed desirable, the parties hereto have agreed, subject to the terms and
conditions hereinafter set forth and in accordance with the terms and provisions
of the Colorado Business Corporation Act (the "Colorado Law") and the New York
Business Corporation Law (the "New York Law"), as follows:
<PAGE>
ARTICLE I
MERGER OF LITTLE PRINCE AND ATLANTIC
Section 1.01. Effect of Merger. On the Effective Date hereof, pursuant
to the provisions of the Colorado Law and the New York Law, Little Prince and
Atlantic shall be merged into a single corporation by Little Prince merging into
Atlantic, with Atlantic surviving as the surviving corporation (hereinafter
sometimes referred to as the "Surviving Corporation"). Upon consummation of the
Merger, the separate corporate existence of Little Prince shall cease and the
Surviving Corporation shall become the owner, without transfer, of all rights,
powers, assets, qualifications and property of Little Prince, and the Surviving
Corporation shall become subject to all debts and liabilities of Little Prince
in the same manner as if the Surviving Corporation had itself incurred them.
Section 1.02. Name of Surviving Corporation. The name of the Surviving
Corporation shall be "Atlantic Industries, Inc." The purposes, county where the
principal office for the transaction of business shall be located, number and
classification of directors, and capital stock of the Surviving Corporation
shall be as appears in the Articles of Incorporation of Atlantic and as
hereinafter set forth.
Section 1.03. Charter and Bylaws of Atlantic. From and after the
Effective Date and until thereafter duly amended as provided by law, the
Articles in Incorporation of Atlantic and the Bylaws of Atlantic, in each case
as in effect at the Effective Date, shall become the Articles of Incorporation
and Bylaws of the Surviving Corporation.
Section 1.04. Directors and Officers of Atlantic.
(a) The number of directors in each class of directors of
Atlantic immediately prior to the Effective Date shall be the number of
directors in each class of directors of the Surviving Corporation, and
the directors of Atlantic immediately prior to the Effective Date shall
be the directors of the Surviving Corporation, to hold office in the
same classes as in effect immediately prior to the Effective Date, in
accordance with the Bylaws of the Surviving Corporation, until their
respective successors are duly appointed or elected and qualified, or
their prior death, resignation or removal.
(b) The officers of Little Prince immediately prior to the
Effective Date shall be the officers of the Surviving Corporation until
their respective successors are duly elected and qualified, or their
prior resignation, removal or death.
ARTICLE II
EXCHANGE AND ISSUANCE OF STOCK
Section 2.01. The manner of effecting the Merger contemplated herein,
including the conversion of the shares of LP Common issued and outstanding
immediately prior to the Effective Date into shares of Atlantic Common shall be
as follows:
2
<PAGE>
(a) At the Effective Date each of the following transactions
shall be deemed to occur simultaneously:
(i) Every 10 shares of LP Common issued and
outstanding immediately prior to the Effective Date shall, by
virtue of the Merger and without any action on the part of the
holder thereof, automatically be cancelled and converted into
and shall be one fully paid and non-assessable share of
Atlantic Common.
(ii) All shares of LP Common which shall then be
held in Little Prince's treasury, if any, shall cease to
exist, and all certificates representing such shares shall be
cancelled by virtue of the Merger.
(iii) Each share of Atlantic Common presently issued
in the name of Little Prince shall be cancelled and retired
and shall resume the status of authorized and unissued shares
of Atlantic Common and no shares of Atlantic Common or other
securities of Atlantic shall be issued in respect thereof.
(b) After the Effective Date:
(i) Each holder of a certificate or certificates
representing issued and outstanding shares of LP Common (a
"Former Holder"), may, but is not required to, surrender the
same to American Stock Transfer & Trust Company, or such other
agent or agents as may be appointed by Atlantic (the "Exchange
Agent") for cancellation or transfer, and each such holder or
transferee will be entitled to receive a certificate or
certificates representing one shares of Atlantic Common for
every 10 shares of LP Common previously represented by the
stock certificates surrendered until so surrendered or
presented for transfer, each certificate which, prior to the
Effective Date, represented issued and outstanding shares of
LP Common, shall be deemed and treated for all corporate
purposes to represent the ownership of one-tenth (1/10) of a
share of Atlantic Common for each share of LP Common
represented by the certificate as though such surrender or
transfer and exchange had taken place. The stock transfer
books for LP Common Stock shall be deemed to be closed at the
Effective Date with respect to each such share of LP Common,
and no transfer of such shares shall thereafter be made on
such books.
(ii) If any certificate for Atlantic Common is to be
issued in a name other than that in which the certificate for
LP Common surrendered for exchange is registered, shall be a
condition of such exchange that the certificate so surrendered
shall be properly endorsed and otherwise in proper form for
transfer and that the person requesting such exchange shall
pay to the Exchange Agent any transfer or other taxes required
by reason of the issuance of such Atlantic Common in any name
other than that of the registered holder of the certificate
surrendered, or established to the satisfaction of the
Exchange Agent that such tax has been paid or is not
applicable.
3
<PAGE>
Section 2.02. Dissenting Stockholders. Notwithstanding the provisions
of Section 2.01, any outstanding shares of LP Common held by stockholders who
shall have elected to dissent from the Merger and who shall have exercised and
perfected appraisal rights with respect to such shares in accordance with
Section 623 of the New York Law ("Dissenting Stockholders") shall not be
converted into shares of Atlantic Common but shall be entitled to receive only
such consideration as shall be provided in said Section 623, except that LP
Common outstanding on the Effective Date and held by a Dissenting Stockholder
who shall thereafter withdraw his election to dissent from the Merger or lose
his right to dissent from the Merger as provided in said Section 623, shall be
deemed converted, as the Effective Date, into such number of shares of Atlantic
Common as such holder otherwise would have been entitled to receive as a result
of the Merger.
ARTICLE III
STOCKHOLDER APPROVAL
Section 3.01. Approval by Stockholders of Little Prince. Little Prince
shall duly convene the Special Meeting of Stockholders of Little Prince (the
"Special Meeting") in connection with which, among other things, the approval by
such stockholders of this Merger Agreement, and the transactions contemplated
hereby, shall be solicited. Little Prince shall use its reasonable best efforts
to obtain such approval.
Section 3.02. Approval by Stockholders of Atlantic. Little Prince, as
sole stockholder of Atlantic, shall consent in writing to the execution of this
Merger Agreement prior to the Effective Date.
ARTICLE IV
CLOSING CONDITIONS; CLOSING
Section 4.01. Closing Conditions. The consummation of the Merger and
the transactions set forth in this Merger Agreement are subject to the
satisfaction on or prior to the Effective Date of the following conditions:
(a) The transactions contemplated by this Merger Agreement
shall have received the approval by affirmative vote of the holders of
two-thirds of the shares of LP Common outstanding at the record date of
the Special Meeting.
(b) The absence of any material pending or threatened
litigation concerning the Merger or any other transaction contemplated
by the Merger Agreement (unless such condition shall be waived by the
Board of Directors of Little Prince);
(c) Statutory dissent and appraisal rights not having been
exercised by the holders or more than 5% of the outstanding LP Common
Stock (unless such condition shall be waived by the Board of Directors
of Little Prince).
4
<PAGE>
Section 4.02. Closing. The closing under this Merger Agreement shall
occur on the Effective Date at a place mutually convenient to all the parties
hereto.
ARTICLE V
TERMINATION OR ABANDONMENT OF MERGER
This Merger Agreement may be terminated and the Merger abandoned at any
time prior to the Effective Date by the Board of Directors of Little Prince, if
the Board of Directors of Little Prince shall determine for any reason that the
consummation of the transaction contemplated hereby would be inadvisable or not
in the best interests of Little Prince and its stockholders.
ARTICLE VI
AMENDMENTS
At any time prior to the Effective Date, the parties hereto may by
written agreement amend, modify or supplement any provision of this Merger
Agreement, provided that no such amendment, modification or supplement may be
made if, in the sole judgment of the Board of Directors of Little Prince, it
will materially and adversely affect the rights and interests of Little Prince's
stockholders.
ARTICLE VII
GOVERNING LAW
This Merger Agreement has been delivered in, and shall be construed
under and in accordance with the laws of the State of New York except to the
extent the laws of Colorado shall apply to the Merger.
ARTICLE VIII
HEADINGS
The headings set forth herein are for convenience only and shall not be
used in interpreting the text of the section in which they appear.
ARTICLE IX
SUCCESSORS AND ASSIGNS
This Merger Agreement may not be assigned by either party without the
consent of the other party hereto, and this Merger Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
parties hereto.
ARTICLE X
5
<PAGE>
COUNTERPARTS
For the convenience of the parties hereto, this Merger Agreement may be
executed in separate counterparts, each of which, when so executed, shall be
deemed to be an original, and such counterparts when taken together shall
constitute but one and the same instrument.
ARTICLE XI
EXTENSIONS OF TIME; WAIVERS
Any time prior to the Effective Date the parties hereto may, by written
agreement (a) extend time for the performance of any of the obligations or other
acts of the parties hereto, (b) waive any breach or inaccuracy in the
representations and warranties contained in this Merger Agreement or in any
document delivered pursuant hereto, or (c) waive compliance with any of the
covenants, conditions or agreements contained in this Merger Agreement, except
as set forth in Section 4.01 hereof.
6
<PAGE>
IN WITNESS WHEREOF, Little Prince and Atlantic, pursuant to the
approval and authority duly given by resolutions adopted by their respective
Boards of Directors, each have caused this Merger Agreement to be executed by a
duly authorized officer thereof, each of whom affirms the statements made herein
by his respective company under penalty of perjury, and has further caused its
respective corporate seal to be hereunto affixed, as of the date first above
written.
Little Prince Productions, Ltd., a New York
corporation
By /s/ Adrian P. Kirby
----------------------
Name:Adrian P. Kirby
--------------------
Title:Chairman, President and Chief Executive
---------------------------------------------
Officer
-------
Atlantic Industries, Inc., a Colorado corporation
By /s/ Adrian P. Kirby
----------------------
Name:Adrian P. Kirby
--------------------
Title:Chairman, President and Chief Executive
---------------------------------------------
Officer
-------
7
EXHIBIT 3.1
Certificate of Incorporation, as amended
<PAGE>
CERTIFICATE OF INCORPORATION
OF
LITTLE PRINCE PRODUCTIONS, LTD.
Under Section 402 of the
Business Corporation Law
The undersigned, natural persons of the age of eighteen years or over,
desiring to form a corporation pursuant to the provisions of the Business
Corporation Law of the State of New York, hereby certify as follows:
FIRST: The name of the corporation is
LITTLE PRINCE PRODUCTIONS, LTD.
SECOND: The purposes for which it is formed are as follows:
To engage in a general business of literary, motion
picture, theatrical distributors and agencies and producers and in
connection therewith, to present, manage, conduct, and represent
authors, actors, actresses, singers, and musicians and to purchase or
otherwise acquire and obtain exclusive and other interests in the
copyrights and rights of representation, and any other rights of or in
any literary works of all kinds, including, but not limited to, plays,
music, songs, words, operas, comedies, burlesques, and compositions.
To purchase, manufacture, produce, assemble, receive,
lease or in any manner acquire, hold, own, use, operate, install,
maintain, service, repair, process, alter, improve, import,, export,
sell, lease, assign, transfer and generally to trade and deal in and
with, raw materials, natural or manufactured articles or products,
machinery, equipment, devices, systems, parts, supplies, apparatus and
personal property of every kind, nature or description, tangible or
intangible, used or capable of being used for any purpose whatsoever
and to engage and participate in any mercantile, manufacturing or
trading business of any kind or character.
To purchase, receive, lease or otherwise require and
to manage, hold, own, use, improve, convey, sell, mortgage, or
otherwise deal in and with lands, buildings and real property of every
description, or any interest therein.
To adopt, apply for, obtain, register, purchase,
lease or otherwise acquire and to maintain, protect, hold, use, own,
exercise, develop, manufacture under, operate and introduce, and to
sell and grant licenses or other rights in respect of, assign or
otherwise dispose of, turn to account, or in any manner deal with and
contract with references to, any trade marks, trade names, patents,
patent rights, concessions, franchises, designs, copyrights and
distinctive marks and rights analogous thereto, and inventions,
devices, improvements, processes, recipes, formulae and the like,
including such thereof as may be covered by, used in connection with,
or secured or received under, Letters of Patent of the United States of
America or elsewhere or otherwise, and any licenses in respect thereof
and any or all rights connected therewith or appertaining thereto.
In furtherance of its corporation business and
subject to the limitations prescribed by statute, to acquire by
purchase, exchange or otherwise, all or any part of, or any interest
in, the properties, assets, business and goodwill of any one or more
corporations, associations, partnerships, firms, syndicates or
individuals and to pay for the same in cash, property or its own or
other securities; to hold, operate, reorganize, liquidate, mortgage,
pledge, sell, exchange, or in any manner dispose of the whole or any
part thereof; and in connection therewith, to assume or guarantee
performance of any liabilities, obligations or contracts of
corporations, associations, partnerships, firms, syndicates or
individuals, and to conduct in any lawful manner the whole or any part
of any similar business thus acquired.
To acquire or become interest in, whether by
subscription, purchase, underwriting, loan, participation in syndicates
or otherwise, to own, hold, to sell, assign or otherwise dispose of, or
in any manner to deal in or with stocks, bonds, debentures, warrants,
rights, scrip, notes, evidences of indebtedness, or other securities or
obligations of any kind by whomsoever issued, to exercise in respect
thereof all powers and privileges of individual ownership or interest
therein, including, the right to vote thereon for any and all purposes;
to consent, or otherwise act with respect thereto, without limitations;
and to issue in exchange therefor the corporation's stock, bonds,
debentures, warrants, rights, scrip, notes, evidences of indebtedness
or other securities or obligations of any kind.
To borrow money for its corporate purposes, and to
make, accept, endorse, execute and issue promissory notes, bills of
exchange, bonds, debentures or other obligations from time to time, for
the purchase of property, or for any purpose relating to the business
of the corporation, and if deemed proper, to secure the payment of any
such obligations by mortgage, pledge, guarantee, deed of trust or
otherwise.
To lend its uninvested funds from time to time to
such extent, on such terms and on such security, if any, as the Board
of Directors of the corporation may determine.
In furtherance of its corporate business and subject
to the limitations prescribed by statute, to be a promoter, partner,
member, associate or manager of other business enterprises or ventures,
or to the extent permitted in any other jurisdiction to be an
incorporator of other corporations of any type or kind and to organize,
or in any way participate in the organization, reorganization, merger
or liquidation of any corporation, association or venture and the
management thereof.
Subject to the limitations prescribed by statute and
in furtherance of its corporate business, to pay pensions, establish
and carry out pension, profit sharing, share bonus, share purchase,
share option, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions for any or all of its directors,
officers and employees.
To conduct its business in all or any of its
branches, so far as permitted by law, in the State of New York and in
all other states of the United States of America, in the territories
and the District of Columbia and in any or all dependencies or
possessions of the United States of America, and in foreign countries;
and to hold, possess, purchase, lease, mortgage and convey real and
personal property and to maintain offices and agencies either within or
outside the State of New York
To carry out all or any part of the foregoing
purposes as principal, factor, agent, broker, contractor or otherwise
either along or in conjunction with any persons, firms, associations,
corporations or others in any part of the world; and in carrying on its
business and for the purpose of attaining or furthering any of its
purposes, to make and perform contracts of any kind and description,
and to do anything and everything necessary, suitable, convenient or
proper for the accomplishment of any of the purposes herein enumerated.
For the accomplishment of the aforesaid purposes, and
in furtherance thereof, the corporation shall have and may exercise all
of the powers conferred by the Business Corporation Law upon
corporations formed thereunder, subject to any limitations contained in
Article 2 of said law or in accordance with the provisions of any other
statute of the State of New York.
THIRD: The office of the corporation in the State of New York shall be
located in the City of New York, County of New York.
FOURTH: The aggregate number of shares which the corporation shall have
authority to issue is two hundred (200) shares all of which are without par
value.
FIFTH: The Secretary of State is designated as the agent of the
corporation upon whom process against the corporation may be served, and the
address to which the Secretary of State shall mail a copy of any process against
the corporation served upon him is c/o Gersten, Scherer and Kaplowitz, 150 East
58th Street, New York, New York 10022.
SIXTH: The shareholders, or the Board of Directors of the corporation
without the assent or vote of the shareholders, shall have the power to adopt,
alter, amend or repeal the ByLaws of the corporation.
IN WITNESS WHEREOF, we hereunto sign our names and affirm that the
statements made herein are true under the penalties of perjury, this 24th day of
March, 1980.
Name Address
---- -------
/s/ Mark Skubick 9 East 40th Street
- --------------------------- New York, New York 10016
Mark Skubick - Incorporator
/s/ Maria Silvestri 9 East 40th Street
- --------------------------- New York, New York 10016
Maria Silvestri - Incorporator
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LITTLE PRINCE PRODUCTS, LTD.
Under Section 805 of the
Business Corporation Law
Pursuant to the provisions of Section 805 of the Business Corporation
law, the undersigned, being the incorporators of the corporation, hereby
certify:
FIRST: The name of the corporation is
LITTLE PRINCE PRODUCTIONS, LTD.
SECOND: That the Certificate of Incorporation was filed by
the Secretary of State of New York on the 3rd day of April, 1980.
THIRD: That the amendment to the Certificate of Incorporation
effected by this Certificate is as follows:
Paragraph FOURTH of the Certificate of Incorporation, relating
to the authorized shares of the corporation, is hereby amended to change as a
unit the authorized shares from two hundred (200) no par to two million five
hundred thousand (2,500,000) shares, par value one cent ($0.01), so as to read
as follows:
"FOURTH: (a) The aggregate number of shares which the
corporation shall have authority to issue is two million five hundred
thousand (2,500,000) shares all of which have a par value of one cent
($0.01) per share.
(b) No holder of any share of the corporation shall,
because of his ownership of shares have a preemptive or other right, to
purchase, subscribe for or take any part or other securities
convertible into or carrying options or warrants to purchase shares of
the corporation issued, optioned or sold by it after its incorporation,
whether the shares be authorized by this certificate of incorporation
or be authorized by an amended certificate duly filed and in effect at
the time of the issuance or sale of such shares or of such notes,
debentures, bonds or other securities convertible into or carrying
options or warrants to purchase shares of the corporation. Any part of
the shares authorized by this certificate of incorporation, or by an
amended certificate duly filed, and any part of the notes, debentures,
bonds or other securities convertible into or carrying options or
warrants to purchase shares of the corporation may at any time be
<PAGE>
issued, optioned for sale and sold or disposed of by the corporation
pursuant to resolution of its Board of Directors to such persons and
upon such terms and conditions as may, to such Board, seem proper and
advisable without first offering to existing shareholders the said
shares or the said notes, debentures, bonds or other securities
convertible into or carrying options or warrants to purchase shares of
the corporation, or any part of any thereof."
FOURTH: That the amendment of the Certificate of Incorporation is
authorized by the written consent of the incorporators of the corporation there
being no officers, directors, shareholders of record or subscribers to shares
whose subscriptions have been accepted.
IN WITNESS WHEREOF, we hereunto sign our names and affirm that the
statements made herein are true under the penalties of perjury, this 23rd day of
April, 1980.
LITTLE PRINCE PRODUCTIONS, LTD.
/s/ Mark Skubicki
-----------------
Mark Skubicki, Incorporator
/s/ Maria Silvestri
-------------------
Maria Silvestri, Incorporator
2
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LITTLE PRINCE PRODUCTIONS, LTD.
Under Section 805 of the
Business Corporation Law
Pursuant to the provisions of Section 805 of the Business Corporation
Law, we, the undersigned, Adrian P. Kirby and Peter N. Chapman, being
respectively the Chairman of the Board, Chief Executive Officer and President,
and Secretary of Little Prince Productions, Ltd., a New York corporation, hereby
certify:
FIRST: The name of the corporation is
LITTLE PRINCE PRODUCTIONS, LTD.
SECOND: That the Certificate of Incorporation was filed by the
Secretary of State of New York on the 3rd day of April, 1980.
THIRD: That the amendment to the Certificate of Incorporation
effected by this Certificate is as follows:
Paragraph FOURTH of the Certificate of Incorporation,
relating to the authorized shares of the corporation, is hereby amended
to change the authorized shares from two million five hundred thousand
(2,500,000) shares, par value one cent ($0.01) to twenty-five million
(25,000,000) shares, par value one cent ($0.01), so as to read as
follows:
"FOURTH: (a) The aggregate number of shares which the
corporation shall have authority to issue is twenty-five
million (25,000,000) shares all of which have a par value of
one cent ($0.01) per share.
(b) No holder of any share of the corporation shall,
because of his ownership of shares have a preemptive or other
right, to purchase, subscribe for or take any part or other
securities convertible into or carrying options or warrants to
purchase shares of the corporation issued, optioned or sold by
it after its incorporation, whether the shares be authorized
by this certificate of incorporation or be authorized by an
amended certificate duly filed and in effect at the time of
the issuance or sale of such shares or of such notes,
debentures, bonds or other securities convertible into or
carrying options or warrants to purchase shares of the
corporation. Any part of the shares authorized by this
certificate of incorporation, or by an amended certificate
duly filed, and any part of the notes, debentures, bonds or
other securities convertible into or carrying
<PAGE>
options or warrants to purchase shares of the corporation may
at any time be issued, optioned for sale and sold or disposed
of by the corporation pursuant to resolution of its Board of
Directors to such persons and upon such terms and conditions
as may, to such Board, seem proper and advisable without first
offering to existing shareholders the said shares or the said
notes, debentures, bonds or other securities convertible into
or carrying options or warrants to purchase shares of the
corporation, or any part of any thereof."
FOURTH: That the amendment of the Certificate of Incorporation
has been authorized by the board of directors and approved by a vote of the
holders of a majority of all outstanding shares entitled to vote thereon at a
meeting of shareholders.
IN WITNESS WHEREOF, we hereunto sign our names and affirm that the
statements made herein are true under the penalties of perjury, this 30th day of
November, 1995.
LITTLE PRINCE PRODUCTIONS, LTD.
By/s/ Adrian P. Kirby
---------------------
Adrian P. Kirby, Chairman of the Board,
Chief Executive Officer and President
By/s/ Peter N. Chapman
----------------------
Peter N. Chapman, Secretary
2
EXHIBIT 3.2
Bylaws
<PAGE>
BYLAWS
OF
LITTLE PRINCE PRODUCTIONS, LTD.
(a New York corporation)
ARTICLE
SHAREHOLDERS
1. CERTIFICATES REPRESENTING SHARES. Certificates representing shares
shall set forth thereon the statements prescribed by Section 508, and, where
applicable, by Sections 505, 616, 620, 709, and 1002, of the Business
Corporation Law and by any other applicable provision of law and shall be signed
by the Chairman or a Vice Chairman of the Board of Directors, if any, or by the
President or a Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer and may be sealed with the corporate
seal or a facsimile thereof. The signatures of the officers upon a certificate
may be facsimiles if the certificate is countersigned by a transfer agent or
registered by a registrar other than the corporation itself or its employee. In
case any officer who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer before such certificate
is issued, it may be issued by the corporation with the same effect as if she
were such officer at the date of its issue.
A certificate representing shares shall not be issued until the full
amount of consideration therefor has been paid except as Section 504 of the
Business Corporation Law may otherwise permit.
The corporation may issue a new certificate for shares in place of any
certificate theretofore issued by it, alleged to have been lost or destroyed,
and the Board of Directors may require the owner of any lost or destroyed
certificate, or his legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against it on account of the alleged loss or destruction of any such certificate
or the issuance of any such new certificate.
2. FRACTIONAL SHARE INTERESTS. The corporation may issue certificates
for fractions of a share where necessary to effect transactions authorized by
the Business Corporation Law which shall entitle the holder, in proportion to
his fractional holdings, to exercise voting rights, receive dividends and
participate in liquidating distributions; or it may pay in cash the fair value
of fractions of a share as of the time when those entitled to receive such
fractions are determined; or it may issue scrip in registered or bearer form
over the manual or facsimile signature of an officer of the corporation or of
its agent, exchangeable as therein provided for full shares, but such scrip
shall not entitle the holder to any rights of a shareholder except as therein
provided.
<PAGE>
3. SHARE TRANSFERS. Upon compliance with provisions restricting the
transferability of shares, if any, transfers of shares of the corporation shall
be made only on the shares record of the corporation by the registered holder
thereof, or by his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the corporation or with a transfer
agent or a registrar, if any, and on surrender of the certificate or
certificates for such shares properly endorsed and the payment of all taxes due
thereon.
4. RECORD DATE FOR SHAREHOLDERS. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividend or the allotment of any rights, or for the
purpose of any other action, the directors may fix, in advance, a date as the
record date for any such determination of shareholders. Such date shall not be
more than fifty days nor less than ten days before the date of such meeting, nor
more than fifty days prior to any other action. If no record date is fixed, the
record date for the determination of shareholders entitled to notice of or to
vote at a meeting of shareholders shall be at the close of business on the date
next preceding the day on which notice is given, or, if no notice is given, the
day on which the meeting is held; the record date for determining shareholders
for any purpose other than that specified in the preceding clause shall be at
the close of business on the day on which the resolution of the directors
relating thereto is adopted. When a determination of shareholders of record
entitled to notice of or to vote at any meeting of shareholders has been made as
provided in this paragraph, such determination shall apply to any adjournment
thereof, unless directors fix a new record date under this paragraph for the
adjourned meeting.
5. MEANING OF CERTAIN TERMS. As used herein in respect of the right to
notice of a meeting of shareholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "shareholder" or "shareholders"
refers to an outstanding share or shares and to a holder or holders of record of
outstanding shares when the corporation is authorized to issue only one class of
shares, and said reference is also intended to include any outstanding share or
shares and any holder or holders of record of outstanding shares of any class
upon which or upon whom the Certificate of Incorporation confers such rights
where there are two or more classes or series of shares or upon which or upon
whom the Business Corporation Law confers such rights notwithstanding that the
Certificate of Incorporation may provide for more than one class or series of
shares, one or more of which are limited or denied such rights thereunder.
6. SHAREHOLDER MEETINGS.
TIME. The annual meeting shall be held on the date fixed, from
time to time, by the directors, provided, that the first annual meeting shall be
held on a date within thirteen months after the formation of the corporation,
and each successive annual meeting shall be held on a date within thirteen
months after the date of the preceding annual meeting. A special meeting shall
be held on the date fixed by the directors except when the Business Corporation
Law confers the right to fix the date upon shareholders.
2
<PAGE>
PLACE. Annual meetings and special meetings shall be held at
such place, within or without the State of New York, as the directors may, from
time to time, fix. Whenever the directors shall fail to fix such place, or,
whenever shareholders entitled to call a special meeting shall call the same,
the meeting shall be held at the office of the corporation in the State of New
York.
CALL. Annual meetings may be called by the directors or by any
officer instructed by the directors to call the meeting. Special meetings may be
called in like manner except when the directors are required by the Business
Corporation Law to call a meeting, or except when the shareholders are entitled
by said Law to demand the call of a meeting.
NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. Written
notice of all meetings shall be given, stating the place, date and hour of the
meeting, and, unless it is an annual meeting, indicating that it is being issued
by or at the direction of the person or persons calling the meeting. The notice
of an annual meeting shall state that the meeting is called for the election of
directors and for the transaction of other business which may properly come
before the meeting, and shall, (if any other action which could be taken at a
special meeting is to be taken at such annual meeting) state the purpose or
purposes. The notice of a special meeting shall in all instances state the
purpose or purposes for which the meeting is called; and, at any such meeting,
only such business may be transacted which is related to the purpose or purposes
set forth in the notice. If the directors shall adopt, amend or repeal a bylaw
regulating an impending election of directors, the notice of the next meeting
for election of directors shall contain the statements prescribed by Section
601(b) of the Business Corporation Law. If any action is proposed to be taken
which would, if taken, entitle shareholders to receive payment for their shares,
the notice shall include a statement of that purpose and to that effect and
shall be accompanied by a copy of Section 623 of the Business Corporation law or
an outline of its material terms. A copy of the notice of any meeting shall be
given, personally or by first-class mail, not less than ten days nor more than
fifty days before the date of the meeting, unless the lapse of the prescribed
period of time shall have been waived, to each shareholder at his record address
or at such other address which he may have furnished by request in writing to
the Secretary of the corporation. Notice by mail shall be deemed to be given
when deposited, with postage thereon prepaid, in a post office or official
depository under the exclusive care and custody of the United States post office
department. If a meeting is adjourned to another time or place, and, if any
announcement of the adjourned time or place is made at the meeting, it shall not
be necessary to give notice of the adjourned meeting unless the directors, after
adjournment, fix a new record date for the adjourned meeting. Notice of a
meeting need not be given to any shareholder who submits a signed waiver of
notice before or after the meeting. The attendance of a shareholder at a meeting
without protesting prior to the conclusion of the meeting the lack of notice of
such meeting shall constitute a waiver of notice by him.
SHAREHOLDER LIST AND CHALLENGE. A list of shareholders as of
the record date, certified by the Secretary or other officer responsible for its
preparation or by the transfer agent, if any, shall be produced at any meeting
of shareholders upon the request thereat or prior thereto of any shareholder. If
the right to vote at any meeting is challenged, the inspectors of election, if
any, or the person presiding thereat, shall require such list of
3
<PAGE>
shareholders to be produced as evidence of the right of the persons challenged
to vote at such meeting, and all persons who appear from such list to be
shareholders entitled to vote thereat may vote at such meeting.
CONDUCT OF MEETING. Meetings of the shareholders shall be
presided over by one of the following officers in the order of seniority and if
present and acting - the Chairman of the Board, if any, the Vice Chairman of the
Board, if any, the President, a Vice President, or if none of the foregoing is
in office and present and acting, by a Chairman to be chosen by the
shareholders. The Secretary of the corporation, or in his absence, an Assistant
Secretary, shall act as secretary of every meeting, but if neither the Secretary
nor an Assistant Secretary is present the Chairman of the meeting shall appoint
a secretary of the meeting.
PROXY REPRESENTATION. Every shareholder may authorize another
person or persons to act for him by proxy in all matters in which a shareholder
is entitled to participate, whether by waiving notice of any meeting, voting or
participating at a meeting, or expressing consent or dissent without a meeting.
Every proxy must be signed by the shareholder or his attorney-in-fact. No proxy
shall be valid after the expiration of eleven months from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the shareholder executing it, except as otherwise provided by the
Business Corporation Law.
INSPECTORS - APPOINTMENT. The directors, in advance of any
meeting, may, but need not, appoint one or more inspectors to act at the meeting
or any adjournment thereof. If an inspector or inspectors are not appointed, the
person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the directors in
advance of the meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of his duties, shall take
and sign an oath faithfully to execute the duties of inspector at such meeting
with strict impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the result and do such acts as are proper to conduct the election or
vote with fairness to all shareholders. On request of the person presiding at
the meeting or any shareholder, the inspector or inspectors, if any, shall make
a report in writing of any challenge, question or matter determined by him or
them and execute a certificate of any fact found by him or them.
QUORUM. Except for a special election of directors pursuant to
Section 603(b) of the Business Corporation Law, and except as herein otherwise
provided, the holders of a majority of the outstanding shares shall constitute a
quorum at a meeting of shareholders for the transaction of any business. When a
quorum is once present to organize a meeting, it is not broken by the subsequent
withdrawal of any shareholders. The shareholders present may adjourn the meeting
despite the absence of a quorum.
4
<PAGE>
VOTING. Each share shall entitle the holder thereof to one
vote. In the election of directors, a plurality of the votes cast shall elect.
Any other action shall be authorized by a majority of the votes cast except
where the Business Corporation Law prescribes a different proportion of votes.
7. SHAREHOLDER ACTION WITHOUT MEETINGS. Whenever shareholders are
required or permitted to take any action by vote, such action may be taken
without a meeting on written consent, setting forth the action so taken, signed
by the holders of all shares.
ARTICLE II
GOVERNING BOARD
1. FUNCTIONS AND DEFINITIONS. The business of the corporation shall be
managed under the direction of a governing board, which is herein referred to as
the "Board of Directors" or "directors" notwithstanding that the members thereof
may otherwise bear the titles of trustees, managers or governors or any other
designated title, and notwithstanding that only one director legally constitutes
the Board. The word "director" or "directors" likewise herein refers to a member
or to members of the governing board notwithstanding the designation of a
different official title or titles. The use of the phrase "entire board" herein
refers to the total number of directors which the corporation would have if
there were no vacancies.
2. QUALIFICATIONS AND NUMBER. Each director shall be at least eighteen
years of age. A director need not be a shareholder, a citizen of the United
States, or a resident of the State of New York. The number of directors
constituting the entire board shall be at least three, except that, where all
the shares continue to be owned beneficially and of record by less than three
shareholders, the number of directors may be less than three but not less than
the number of such shareholders. Subject to the foregoing limitation and except
for the first Board of Directors, such number may be fixed from time to time by
action of the shareholders of or the directors, or, if the number is not so
fixed, the number shall be one where there continues to be only one person who
or which owns all of the shares of the corporation beneficially and of record.
The number of directors may be increased or decreased by action of shareholders
or of the directors, provided that any action of the directors to effect such
increase or decrease shall require the vote of a majority of the entire Board.
No decrease shall shorten the term of any incumbent director.
3. ELECTION AND TERM. The first Board of Directors shall be elected by
the incorporator or incorporators and shall hold office until the first annual
meeting of shareholders slid until their successors have been elected and
qualified. Thereafter, directors who are elected at an annual meeting of
shareholders, and directors who are elected in the interim by the shareholders
to fill vacancies and newly created directorships, shall hold office until the
next annual meeting of shareholders and until their successors have been elected
and qualified; and directors who are elected in the interim by the directors to
fill vacancies and newly created directorships shall hold office until the next
meeting of shareholders at which the election of directors is in the regular
order of business and until their successors have been elected and qualified. In
the interim between annual meetings of shareholders or of special meetings of
5
<PAGE>
shareholders called for the election of directors, newly created directorships
and any vacancies in the Board of Directors, including vacancies resulting from
the removal of directors for cause or without cause, may be filled by the vote
of the remaining directors then in office, although less than a quorum exists.
4. MEETINGS.
TIME. Meetings shall be held at such time as the Board shall
fix, except that the first meeting of a newly elected Board shall be held as
soon after its election as the directors may conveniently assemble.
PLACE. Meetings shall be held at such place within or without
the State of New York as shall be fixed by the Board.
CALL. No call shall be required for regular meetings for which
the time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, of the President, or of a
majority of the directors in office.
NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be
required for regular meetings for which the time and place have been fixed.
Written, oral or any other mode of notice of time and place shall be given for
special meetings in sufficient time for the convenient assembly of the directors
thereat. The notice of any meeting need not specify the purpose of the meeting.
Any requirement of furnishing a notice shall be waived by any director who signs
a waiver of notice before or after the meeting, or who attends the meeting
without protesting, prior thereto or at its commencement, the lack of notice to
him.
QUORUM AND ACTION. A majority of the entire Board shall
constitute a quorum except when a vacancy or vacancies prevents such majority,
whereupon a majority of the directors in office shall constitute a quorum,
provided such majority shall constitute at least one-third of the entire Board.
A majority of the directors present, whether or not a quorum is present, may
adjourn a meeting to another time and place. Except as herein otherwise
provided, the act of the Board shall be the act, at a meeting duly assembled, by
vote of a majority of the directors present at the time of the vote, a quorum
being present at such time.
Any one or more members of the Board of Directors or of any committee
thereof may participate in a meeting of said Board or of any such committee by
means of a conference telephone or similar communications equipment allowing all
persons participating in the meeting to hear each other at the same time, and
participation by such means shall constitute presence in person at the meeting.
CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and
if present and acting, shall preside at all meetings. Otherwise, the President,
if present and acting, or any other director chosen by the Board, shall preside.
6
<PAGE>
5. REMOVAL OF DIRECTORS. Any or all of the directors may be removed for
cause or without cause by the shareholders. One or more of the directors may be
removed for cause by the Board of Directors.
6. COMMITTEES. Whenever the Board of Directors shall consist of more
than three members, the Board of Directors, by resolution adopted by a majority
of the entire Board of Directors, may designate from their number three or more
directors to constitute an Executive Committee and other committees, each of
which, to the extent provided in the resolution designating it, shall have the
authority of the Board of Directors with the exception of any authority the
delegation of which is prohibited by Section 712 of the Business Corporation
Law.
7. WRITTEN ACTION. Any action required or permitted to be taken by the
Board of Directors or by any committee thereof maybe taken without a meeting if
all of the members of the Board of Directors or of any committee thereof consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents thereto by the members of the Board of
Directors or of any such committee shall be filed with the minutes of the
proceeding of the Board of Directors or of any such committee.
ARTICLE III
OFFICERS
The directors may elect or appoint a Chairman of the Board of
Directors, a President, one or more Vice Presidents, a Secretary, one or more
Assistant Secretaries, a Treasurer, one or more Assistant Treasurers, and such
other officers as they may determine. The President may but need not be a
director. Any two or more offices may be held by the same person except the
offices of President and Secretary; or, when all of the issued and outstanding
shares of the corporation are owned by one person, such person may hold all or
any combination of offices.
Unless otherwise provided in the resolution of election or appointment,
each officer shall hold office until the meeting of the Board of Directors
following the next annual meeting of shareholders and until his successor has
been elected and qualified.
Officers shall have the powers and duties defined in the resolutions
appointing them.
The Board of Directors may remove any officer for cause or without
cause.
ARTICLE IV
STATUTORY NOTICES TO SHAREHOLDERS
The directors may appoint the Treasurer or other fiscal officer and/or
the Secretary or any other officer to cause to be prepared and furnished to
shareholders entitled thereto any special financial notice and/or any financial
statement, as the case may be, which may be
7
<PAGE>
required by any provision of law, and which, more specifically, may be required
by Sections 510, 511, 515, 516, 517, 519 and 520 of the Business Corporation
Law.
ARTICLE V
BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of the shareholders, of the
Board of Directors, and/or any committee which the directors may appoint, and
shall keep at the office of the corporation in the State of New York or at the
office of the transfer agent or registrar, if any, in said state, a record
containing the names and addresses of all shareholders, the number and class of
shares held by each, and the dates when they respectively became the owners of
record thereof. Any of the foregoing books, minutes or records may be in written
form or in any other form capable of being converted into written form within a
reasonable time.
ARTICLE VI
CORPORATE SEAL
The corporate seal, if any, shall be in such form as the Board of
Directors shall prescribe.
ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject
to change from time to time, by the Board of Directors.
ARTICLE VIII
CONTROL OVER BYLAWS
The shareholders entitled to vote in the election of directors or the
directors upon compliance with any statutory requisite may amend or repeal the
Bylaws and may adopt new Bylaws, except that the directors may not amend or
repeal any Bylaw or adopt any new Bylaw, the statutory control over which is
vested exclusively in the said shareholders or in the incorporators. Bylaws
adopted by the incorporators or directors may be amended or repealed by the said
shareholders.
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE CONSOLIDATED
BALANCE SHEETS FOR THE YEARS ENDED DECEMBER 31,
1995 AND 1994 AND THE CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1995,
1994 AND 1993 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS CONTAINED
IN REGISTRANT'S ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1995.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<CASH> 946
<SECURITIES> 0
<RECEIVABLES> 6,629
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,187
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,915
<CURRENT-LIABILITIES> 284,326
<BONDS> 0
0
0
<COMMON> 249,992
<OTHER-SE> (517,403)
<TOTAL-LIABILITY-AND-EQUITY> 16,915
<SALES> 0
<TOTAL-REVENUES> 20,779
<CGS> 0
<TOTAL-COSTS> 125,726
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (104,947)
<INCOME-TAX> 0
<INCOME-CONTINUING> (104,947)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (104,947)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
