U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
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, 1997
Commission File Number 0-9455
ATLANTIC INDUSTRIES, INC.
(Name of small business issuer in its charter)
Colorado 13-3045713
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
38 South Audley Street
Mayfair, London, England W1Y 5DH
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (44171) 629-7617
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common stock, $.01 par value
----------------------------
(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 ___
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of the 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, 1997: $-0-.
The aggregate market value of voting stock held by nonaffiliates of the
registrant as of March 10, 1998 was $922.52.
The number of shares of the Company's $.01 par value common stock
outstanding as of March 10, 1998 was 193,127.
DOCUMENTS INCORPORATED BY REFERENCE
None
Transitional Small Business Disclosure Format Yes ______ No [X]
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL
Little Prince Productions, Ltd. ("Little Prince"), the predecessor
company to the registrant, was incorporated on April 3, 1980 pursuant to the
laws of the State of New York. Little Prince was originally formed to pursue
certain ancillary and subsidiary rights to the literary work entitled "The
Little Prince." Subsequent to its organization Little Prince changed its
business focus. See "-Background of Company's Operations" below. As used in this
report the term "Company" refers to Little Prince prior to December 6, 1996 and
to Atlantic (as defined below) as of and subsequent to December 6, 1996.
On February 29, 1996, the Company held a Special Meeting of
Shareholders (the "Meeting"). At the Meeting the Company's shareholders, by an
affirmative vote of approximately 76% of the total shares outstanding, adopted
the following proposals: (i) a change in the Company's state of incorporation
from New York to Colorado by means of a merger (the "Merger") of Little Prince
into Atlantic Industries, Inc., ("Atlantic") a Colorado corporation organized on
January 31, 1996, which was wholly owned by Little Prince at the time of the
Merger; (ii) approval of 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 after the Merger to 50,000,000; and (iii)
consented and authorized the 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 or (b) vote to
dissolve LPPL Corp. On December 6, 1996, the Merger became effective (the
"Effective Date"). By operation of law on the Effective Date, all assets,
property, rights, liabilities and obligations of Little Prince were transferred
to and assumed by the Company. The principal effect of the Merger was 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, on the Effective Date, the Company was authorized to
issue 50,000,000 shares of capital stock (the "Capital Stock"). Of the Capital
Stock reserved for issuance 40,000,000 shares are reserved for issuance as
Common Stock, of which 2,499,923 shares were outstanding at that time, and
10,000,000 shares were reserved for issuance as preferred stock ("Preferred
Stock"), of which no shares were outstanding.
SALE OF LPPL CORP.
Pursuant to the authority granted to it by the shareholders at the Meeting,
on July 22, 1996 the Board authorized the sale of its ownership interest in all
of the issued and outstanding
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capital stock of LPPL Corp. (the "LPPL Shares") to Frances Katz Levine pursuant
to that certain Stock Purchase Agreement (the "Agreement") dated July 22, 1996.
As consideration for the LPPL Shares, the Company received $10 and Ms. Levine's
agreement to use her best efforts to effect and complete by July 21, 1997, at no
cost to the Company, the reincorporation of LPPL Corp. under the laws of the
State of Delaware. Simultaneously therewith, Ms. Levine agreed to increase the
number of shares of authorized capital stock of LPPL Corp. and distribute the
shares of common stock of LPPL Corp. to the shareholders of the Company as of
July 22, 1996 at a ratio of one LPPL Share for every one share of Common Stock
of the Company (or such other ratio as required by the attendant circumstances)
in accordance with the requirements of all applicable federal and state
securities laws and regulations. In the event Ms. Levine failed to complete the
above actions by July 21, 1997, the Agreement required Ms. Levine to immediately
take all steps necessary to dissolve LPPL Corp. and deliver any assets remaining
after dissolution, if any, to the Company. Ms. Levine did fail to complete the
above actions by July 21, 1997. Accordingly, the Company recognized a gain on
the disposition of LPPL Corp. of $155,825 on such date.
DEVELOPMENTS SUBSEQUENT TO DECEMBER 31, 1996
On February 12, 1997 the Company held a Special Meeting of Shareholders
(the "1997 Meeting"). At the 1997 Meeting the Company's shareholders adopted, by
an affirmative vote of approximately 74% of the total Shares outstanding, a
proposal to effect a reverse stock split of up to twenty-for-one of the
presently issued and outstanding shares of Common Stock. At the 1997 Meeting,
shareholders owning (i) 2,853,588 (74%) shares of Common Stock voted for the
proposal, (ii) 210 shares of Common Stock voted against the proposal, and (iii)
140 shares of Common Stock abstained. The proposal as adopted allowed the Board
to abandon the reverse stock split or to reduce the ratio of the split to
something less than twenty-for-one at any time after the 1997 Meeting and prior
to February 12, 1998 if the Board determined, in its sole discretion, that the
reverse stock split would not be in the best interests of the Company or that a
different ratio (but not greater than twenty-for-one) would be in the best
interest of the Company.
On February 13, 1997, the Company filed an amendment to its Articles of
Incorporation making effective a twenty-for-one reverse stock split. The filing
of the amendment resulted in a decrease in the number of outstanding Shares to
approximately 193,127 and, since the number of Shares available for issuance
remained at 40,000,000, increased the number of Shares available for issuance
from approximately 36,140,077 to 39,806,873.
THE COMPANY'S BUSINESS PLAN
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 countries. 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.
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The Company's current acquisition strategy involves the possibility of
acquiring, in exchange for the 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 the Capital Stock of the
Company. As of the date hereof, no such acquisitions have been made nor are any
contemplated in the near future. See "Description of Property" for a description
of the Company's investment strategies.
COMPETITION
Management believes that the Company may face competition for the most
attractive real estate investment opportunities or business acquisition
opportunities from other investors. Other investors, substantially all of whom
have greater resources than the Company, are in the market for real estate
investments and business acquisitions and present intense competition due to
their being considerably better established and larger than the Company in total
assets and resources. There cannot be any assurance that the Company 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 investment opportunities
against potential competitors.
PERSONNEL
During the fiscal year ended December 31, 1997, the Company had no
employees other than its two executive officers.
ITEM 2. DESCRIPTION OF PROPERTY
The Company does not own or lease any property. The executive offices
of the Company have been maintained at the office of Mr. Kirby at 38 South
Audley Street, Mayfair, London, England W1Y 5DH. The Company has no ownership
interest in such property, has no formal lease or agreement with respect to its
office facilities and pays no rent or other remuneration for the use thereof.
NATURE OF INVESTMENTS/INVESTMENT STRATEGY
Currently, the Company has no investments of any type. Further, 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;
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(c) the geographical area and location of the business or property (which
business or property 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 its Capital 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 Capital Stock. Moreover,
there can be no assurance that the Company will be able to raise any funds
through the sale of Capital 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 Preferred Stock in addition to short, intermediate or
long-term borrowings, on a 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 Common Stock. The Company may also combine
any of the above financing methods.
ITEM 3. LEGAL PROCEEDINGS
No material legal proceedings to which the Company (or any officer or
director of the Company, or any affiliate as owners of record or beneficially of
more than 5% of the Common Stock) to management's knowledge, is a party or to
which the property of the Company is subject, is pending and no such material
proceedings are known by management of the Company to be contemplated.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year ended December 31, 1997,
no matters were submitted to a vote of security holders.
4
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PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Common Stock is currently traded on the over-the-counter market
under the symbol "ACDX". Between May 22, 1993 and March 27, 1997, the Company,
or its predecessor, traded on the OTC Bulletin Board under the symbol "LTLP."
Prior to May 22, 1992, the Company, or its predecessor, was quoted on the
National Association of Securities Dealers' Automated Quotation System
("NASDAQ"). Because the Company did not meet the revised financial criteria for
continued inclusion in NASDAQ, it was delisted therefrom, effective May 22,
1992. Currently, the Common Stock is neither listed on NASDAQ nor quoted on the
OTC Bulletin Board. The Company has been advised by NASDAQ that no dealer has
submitted bid prices for the Common Stock since August, 1995.
On December 31, 1996, the Company authorized the issuance of 1,360,000
shares of Common Stock to the Patchouli Foundation ("Patchouli") in payment for
loans made by the Patchouli Foundation to the Company. Pursuant to Section 4(2)
of the Securities Act of 1933, as amended (the "Act"), the issuance of the
1,360,000 shares was exempt from the registration requirements of the Act. See
"Certain Relationships and Related Transactions."
As of March 10, 1998, there were 324 record holders of the Common
Stock. The Company has not declared or paid any form of dividends on the Common
Stock during the last two fiscal years and does not contemplate declaring or
paying any dividends on the Common Stock in the near future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following discussion should be read in conjunction with the
Company's financial statements and notes thereto included elsewhere in this
report.
The statements contained herein, if not historical, are forward looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, and involve risks and uncertainties that could cause actual results to
differ materially from the results, financial or otherwise, or other
expectations described in such forward-looking statements. These risks and
uncertainties that may affect the operations, performance, development and
results of the Company's business include those, among others, discussed below
and under "Description of Business-THE COMPANY'S BUSINESS PLAN," "-COMPETITION"
and "Description of Property-NATURE OF INVESTMENTS/INVESTMENT STRATEGY." Any
forward looking statement or statements speak only as of the date on which such
statement was made, and the Company undertakes no obligation to update any
forward looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. Therefore, forward-looking statements should not be relied
upon as a prediction of actual future results.
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RESULTS OF OPERATIONS
Balance sheet amounts originally denominated in United Kingdom sterling
have been translated into U.S. dollars using the year-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.
Fluctuations in foreign exchange rates could have either negative or positive
impacts on the Company's balance sheet and results of operations.
During the fiscal year ended December 31, 1997, the Company was largely
inactive except for administrative activities in connection with the preparation
and filing of periodic reports required under the Securities Exchange Act of
1934, as amended. All filings are now up to date. The majority of the operating
costs of approximately $24,398 incurred during the 1997 fiscal year, related to
the audit, accounting, secretarial and legal costs associated with the
preparation of the aforementioned documentation.
LIQUIDITY AND CAPITAL RESOURCES
As a result of the sale of LPPL Corp., the Company currently has no
income producing assets. The Company is dependent in the short term on continued
loans from Patchouli. As stated above, the Company intends to acquire through
the issuance of additional shares of Capital Stock a suitable business or
businesses and/or to obtain additional funds through the sale of Common Stock or
Preferred Stock in public or private transactions. The Company's investment
strategy is set forth under "Description of Property-NATURE OF
INVESTMENTS/INVESTMENT STRATEGY."
After the merger of Little Prince into the Company, the Board believed
that its ability to acquire suitable income producing properties was still
limited by the number of Shares outstanding at the end of the Company's fiscal
year. For example, an arbitrarily assigned value of $5.00 per share for purposes
of conducting a reverse acquisition would indicate that the Company had a
capitalization of $20 million, with the current number of shares then
outstanding. Because the Shares are currently of minimal value, the person
selling the business in return for shares would recognize a substantial dilution
in the value of the shares such person received. Under the same scenario, after
giving effect to a reverse stock split of twenty-for- one, the Company's
hypothetical capitalization would decrease to approximately $1 million and the
person selling the business would recognize a less substantial dilution in the
value of its shares. Although, the above example is hypothetical and meant only
for illustrative purposes to reflect the difficulties the Company faced in
attempting to locate a viable business or assets to acquire, the Company
believed that the twenty-for-one reverse stock split that became effective on
February 13, 1997, would enhance the Company's ability to enter into potential
acquisitions in the future.
The Company cannot provide any assurances that the reverse stock spit
will enable it to acquire a suitable business, businesses or assets in the
future. In addition, the Company cannot provide any assurance as to the value
per share a person interested in selling its business or assets in exchange for
shares would demand or accept.
6
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The Company had no material commitments for capital expenditure for the
period ended December 31, 1997.
Because the Company currently has no operations, it cannot be
determined what, if any, effect the "Year 2000" issues will have on the
operations of the Company and no such determination has been made.
ITEM 7. FINANCIAL STATEMENTS
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
Financial Statements."
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
7
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PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
DIRECTORS AND EXECUTIVE OFFICERS DURING THE YEAR ENDED DECEMBER 31, 1997.
The table below sets forth the persons who were the directors and executive
officers of the Company during the year ended December 31, 1997 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
the Company held by each such person. All persons who served as officers of the
Company during this period also served as executive officers.
Officer and Director
----------------------------
Name of Director Other Offices Held Age From To
---------------- ------------------ --- ---- --
Adrian P. Kirby Chief Executive Office, 39 October 1, 1994 Present
Chairman, President
Peter N. Chapman Treasurer, Secretary 42 November 16, 1992 Present
Messrs. Kirby and Chapman, the Company's current officers and
directors, devote such of their time to the Company's business and affairs as is
required for their executive duties and meetings of the Board of Directors.
FAMILY RELATIONSHIPS
No family relationship exists between any director or executive officer
of the Company 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 the Company. No other persons have been nominated or chosen
to become a director of the Company.
ADRIAN P. KIRBY has been the President, Chief Executive Officer and
Chairman of the Board of Directors of the Company 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. and Riparian Properties,
Ltd. Mr. Kirby served as the Chairman of all of the constituent corporations of
the Riparian Group until his resignation therefrom in March of 1995. In 1984,
Mr. Kirby incorporated Guardacre Investments Limited, and subsequently,
Guardacre Securities and
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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
the Company from November 16, 1992 through the present. Mr. 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
the Company until July 22, 1996. Mr. Chapman was admitted as a Fellow of the
Institute of Chartered Accountants in England and Wales in 1979.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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
The Company 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 the
Company 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 the
Company for the years ended December 31, 1997, 1996 and 1995 by the Company's
chief executive officer. None of the Company's executive officers received or
accrued annual compensation in excess of $100,000 in any of such years. All of
the Company's current executive officers have agreed to render services to the
Company solely for the purpose of enhancing the value of their shareholdings in
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the Company, until such time as the Company has the financial resources
available to compensate such persons for their services.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
All
Other Restricted Securities Other
Annual Stock Underlying LTIP Compensa-
Principal Salary Bonus Compensa- Award(s) Options/ Payouts tion
Name Position Year ($) ($) tion ($) ($) SARs(#) ($) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Adrian P. President 1995 $-0- $-0- $-0- $-0- $-0- $-0- $-0-
Kirby(1) and Chief 1996 -0- -0- -0-(2) -0- -0- -0- -0-
Executive 1997 -0- -0- -0- -0- -0- -0- -0-
Officer
- ---------------
<FN>
(1) Mr. Kirby became president and chief executive officer of the Company on
October 1, 1994. Mr. Kirby has agreed to render his services to the Company
solely for the purpose of enhancing the value of the shareholdings of the
Patchouli Foundation in the Company until such time as the Company has the
financial resources available to compensate him for his services.
(2) On December 31, 1996, the Patchouli Foundation ("Patchouli") received
1,360,000 shares of Common Stock in exchange for the cancellation of the debt of
$170,000 owed to Patchouli by the Company. Mr. Kirby may be deemed to be a
beneficial owner of such shares through the investment and voting powers which
Mr. Kirby has over such shares through his position as attorney-in-fact for the
administrator of the Patchouli Foundation. The purpose of this transaction was
not to pay Mr. Kirby compensation for his services as an executive officer of
the Company. See "Certain Relationships and Related Transactions."
</FN>
</TABLE>
DIRECTORS REMUNERATION
The directors of the Company are not compensated for their services as
such.
EMPLOYMENT AGREEMENTS
The Company has not entered into an employment contract or similar
arrangements with any executive officer.
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of outstanding Common Stock as of March 10, 1998, by (i)
each person known by the Company to own beneficially five percent or more of the
outstanding shares of Common Stock, (ii) the Company's directors, Chief
Executive Officer and executive officers whose total compensation exceeded
$100,000 for the last fiscal year, and (iii) all directors and executive
officers of the Company as a group.
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership Percent of Class**
------------------- -------------------- ------------------
Patchouli Foundation 99,250(1) 51.4%
c/o Hans Zum Elefant
Kirchgasse 3/5
Postfach 8024
Zurich
Adrian P. Kirby, Chairman of the 99,250(1) 51.4
Board, CEO and President
38 South Audley Street
Mayfair, London
England W1Y 5DH
Terence G. Galgey 11,250 5.8
c/o Daniel Stewart & Co.
27 John Adam Street
London, England WC2N 6HX
Peter N. Chapman, Director, CFO 1,625 *
and Secretary
38 South Audley Street
Mayfair, London
England W1Y 5DH
100,875 52.2
All executive officers and directors
as a group (2 persons).
- ------------------
(1) Includes 99,202 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 has over such shares through his
position as attorney-in-fact for the administrator of the Patchouli Foundation.
* Indicates less than 1% beneficial ownership
**Calculated on the basis of 193,127 Shares outstanding on March 10, 1998
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CHANGES IN CONTROL
The Company is not aware of any existing arrangements that may result
in a change in control of the Company at this time. A change in control of the
Company could occur in the future if the Company locates a suitable business or
assets to acquire.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS AND BUSINESS RELATIONSHIPS WITH MANAGEMENT
Since 1994, the Patchouli Foundation ("Patchouli") has made loans to
the Company 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 the Company's Annual Reports
on Forms 10-KSB, Quarterly Reports on Form 10-Q, proxy statements and state
income tax returns. Patchouli is a non-discretionary family trust, governed by
Liechtenstein law, set up for the benefit of the family of Adrian P. Kirby, the
Chairman of the Board, Chief Executive Officer and President of the Company. Mr.
Kirby may be deemed to be a beneficial owner of such shares through the
investment and voting powers which Mr. Kirby has over such shares through his
position as attorney-in-fact for the administrator of Patchouli.
As of December 31, 1996, Patchouli had advanced to the Company $170,000
(the "Patchouli Advance"). On December 31, 1996, the Board unanimously
authorized the issuance of 1,360,000 shares of Common Stock to Patchouli in
payment for the Patchouli Advance. As a result of this exchange, Patchouli
became the beneficial owner of 51.4% of Common Stock issued and outstanding.
Although the Common Stock currently has no value, the Board valued the Common
Stock at a price of $.125 per share for purposes of determining the number of
Shares Patchouli would receive as payment for the Patchouli Advance. The Board
believed that the offered price of $.125 per share was fair and reasonable to
the Company and its shareholders.
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
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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. As of March 26, 1998, no such
distribution of shares of Atlantic Properties, Ltd. has been made to the
shareholders of the Company.
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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) Agreement and Plan of Merger dated February 9, 1996, between Little
Prince Productions, Ltd. and Atlantic Industries, Inc.
2.2(2) Certificate of Merger of Little Prince Productions, Ltd., a New York
corporation into Atlantic Industries, Inc., a Colorado corporation,
dated March 29, 1996, under Section 907 of the New York Business
Corporation Law.
2.3(2) Articles of Merger of Little Prince Productions, Ltd., a New York
corporation into Atlantic Industries, Inc., under Section 7-111-107
of the Colorado Business Corporation Act.
2.4(3) Stock Purchase Agreement dated as of July 22, 1996 between the
Company and Frances Katz Levine.
3.1(2) Articles of Incorporation of Atlantic Industries, Inc., as amended
3.2(2) Amended and Restated Bylaws of Atlantic Industries, Inc.
27* Financial Data Schedule
- ---------------
*Filed herewith.
(1) Filed with the Securities and Exchange Commission as an exhibit to the
Company's Form 10-K, dated December 31, 1995, which exhibit is incorporated
herein by reference.
(2) Filed with the Securities and Exchange Commission as an exhibit to the
Company's Form 10-KSB, dated December 31, 1996, which exhibit is incorporated
herein by reference.
(3) Filed with the Securities and Exchange Commission as an exhibit to the
Company's Form 10-QSB, dated June 30, 1996, which exhibit is incorporated herein
by reference.
14
<PAGE>
(B) REPORTS ON FORM 8-K
The Company did not file any Current Reports on Form 8-K during the last
quarter of the period covered hereby.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
ATLANTIC INDUSTRIES, INC.
March 26, 1998 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 Company and in the
capacities and on the dates indicated.
March 26, 1998 By /s/ Adrian P. Kirby
----------------------------------------
ADRIAN P. KIRBY, Chairman of the
Board, Chief Executive Officer and
President
March 26, 1998 By /s/ Peter N. Chapman
---------------------------------------
PETER N. CHAPMAN, Director, Treasurer
and Secretary, Principal Financial and
Accounting Officer
16
<PAGE>
ATLANTIC INDUSTRIES, INC.
INDEX TO FINANCIAL STATEMENTS
Page
----
Independent Auditor's Report.................................................F-2
Financial Statements:
Balance Sheet as of December 31, 1997....................................F-3
Statements of Operations and Accumulated Deficit for the year ended
December 31, 1997 and for the period from January 31, 1996
(inception) to December 31, 1996................................F-4
Statement of Stockholders' Deficit for the period from January 31, 1996
(inception) to December 31, 1997................................F-5
Statements of Cash Flows for the year ended December 31, 1997 and for
the period from January 31, 1996 (inception) to December 31,
1996............................................................F-6
Notes to Financial Statements................................................F-7
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Directors and Shareholders
Atlantic Industries, Inc.
We have audited the balance sheet of Atlantic Industries, Inc. as of December
31, 1997, and the related statements of operations, stockholders' deficit and
cash flows for the year ended December 31, 1997 and for the period from January
31, 1996 (inception) to December 31, 1996. 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 financial position of Atlantic Industries, Inc. as of
December 31, 1997 and the results of its operations and its cash flows for the
year ended December 31, 1997 and for the period from January 31, 1996
(inception) to December 31, 1996 in conformity with generally accepted
accounting principles.
New York, New York /s/ Moore Stephens, P.C.
February 19, 1998
F-2
<PAGE>
ATLANTIC INDUSTRIES, INC.
BALANCE SHEET
DECEMBER 31, 1997
ASSETS
TOTAL ASSETS $ -0-
---------
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses 4,000
Due to shareholder 41,450
---------
Total Current Liabilities 45,450
---------
STOCKHOLDERS' DEFICIT
Preferred stock, $.01 par value; authorized -
10,000,000 shares; issued and
outstanding - 0 shares
Common stock, $.01 par value; authorized -
40,000,000 shares; 193,127 shares issued
and outstanding 1,931
Additional paid-in capital (138,228)
Retained earnings 90,847
---------
Total Stockholders' Deficit (45,450)
---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ -0-
=========
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
ATLANTIC INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
For the period from
For the year ended January 31, 1996 (inception)
December 31, 1997 to December 31, 1996
----------------- --------------------
REVENUE $ -0- $ -0-
GENERAL AND ADMINISTRATIVE
EXPENSES (24,398) (26,545)
------- -------
LOSS FROM OPERATIONS (24,398) (26,545)
------- -------
OTHER INCOME (LOSS)
Loss of transferred business -0- (14,035)
------- -------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAX PROVISION (24,398) (40,580)
INCOME TAX PROVISION -0- -0-
------- -------
LOSS FROM CONTINUING OPERATIONS (24,398) (40,580)
DISCONTINUED OPERATIONS
Income from disposition of
LPPL Corp., net of income
taxes of $-0- and $-0-,
respectively 155,825 -0-
------- -------
NET INCOME (LOSS) $131,427 $(40,580)
======= =======
EARNINGS (LOSS) PER SHARE
From continuing operations $ (.13) $ (.32)
From discontinued operations .81 -0-
----- --------
Total earnings (loss) per share $ .68 $ (.32)
===== ========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 193,127 125,199
======= =======
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
<TABLE>
ATLANTIC INDUSTRIES, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
FOR THE PERIOD FROM JANUARY 31, 1996 (INCEPTION) TO DECEMBER 31, 1997
<CAPTION>
Preferred Stock Common Stock
--------------- ------------ Retained
Additional Earnings Total
Number of Number of Paid-in Accumulated Stockholders'
Shares Amount Shares Amount Capital Deficit Deficit
------ ------ ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
January 31, 1996 Issuance
of Common Stock $ 100 $ 1 $ $ $ 1
Acquired Equity of Little
Prince Productions Ltd. 2,499,923 24,999 (331,297) (306,298)
Common Stock Issued in
Payment of Amount Due
to Shareholder 1,360,000 13,600 156,400 170,000
Recapitalization Adjustment (100) (1) 1 0
Loss for the period from
January 31, 1996 to
December 31, 1996 (40,580) (40,580)
February 12, 1997 Reverse
Stock Split: 20 for 1 (see
(Note 7) (3,666,796) (36,668) 36,668 0
------------------------------------------------------------------------------------------------------
Balance December 31, 1996 0 0 193,127 1,931 (138,228) (40,580) (176,877)
------------------------------------------------------------------------------------------------------
Net income for the year
ended December 31, 1997 -- -- -- -- -- 131,427 131,427
------------------------------------------------------------------------------------------------------
0 $ 0 193,127 $ 1,931 $(138,228) $ 90,847 $ (45,450)
======================================================================================================
The accompanying notes are an integral part of these financial statements.
F-5
</TABLE>
<PAGE>
ATLANTIC INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
For the period from
For the year ended January 31, 1996 (inception)
December 31, 1997 to December 31, 1996
----------------- --------------------
OPERATING ACTIVITIES:
Net income (loss) $ 131,427 $ (40,580)
Adjustments to reconcile net income
to net cash provided (used) by
operating activities:
(Gain) loss on disposition of LPPL
Corp. (155,825) 14,035
Issuance of common shares for
related party services (see
Note 3) -0- 10,000
Changes in operating assets and
liabilities:
Increase (decrease) in accounts
payable and accrued expenses (16,561) 16,544
Increase in due to shareholder 40,959 -0-
--------- ---------
Net Cash Provided (Used)
by Operations -0- (1)
--------- ---------
FINANCING ACTIVITIES:
Issuance of common shares -0- 1
--------- ---------
Net Cash Provided by
Financing Activities -0- 1
--------- ---------
INCREASE IN CASH -0- -0-
CASH, beginning of period -0- -0-
--------- ---------
CASH, end of period $ -0- $ -0-
========= =========
SUPPLEMENTAL DISCLOSURES:
1. During the period ended December 31, 1996, the Company satisfied
$160,000 of a payable to a major shareholder through the issuance of
1,280,000 common shares. The total payable satisfied was $170,000,
which included $10,000 for services rendered and which is a component
of operating activities (see Note 3).
2. A summary of the assets and liabilities of Little Prince Productions,
Ltd. ("Little Prince") that were merged into the Company during the
period ended December 31, 1996 is as follows:
Miscellaneous receivable $8,829
Investments 1
Accounts payable 4,017
Due to shareholder 160,491
The $8,829 receivable is from LPPL Corp. ("LPPL"), Little Prince's
former subsidiary.
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
ATLANTIC INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
I. ORGANIZATION AND STOCK ACQUISITION
Atlantic Industries, Inc. (the "Company") was incorporated under the
laws of Colorado on January 31, 1996 for the purpose of having merged
into it a New York corporation, Little Prince Productions, Ltd ("Little
Prince"), and to continue the real estate activities of Little Prince.
Little Prince also continued, although at a minimal level, its
theatrical production operations through its subsidiary, LPPL. In an
effort to restore the profitability of Little Prince, its board of
directors adopted a plan of reorganization which, among other things,
called for the merger of Little Prince into the Company. This plan was
ratified by a special meeting of Little Prince's shareholders on
February 29, 1996.
On December 6, 1996, the Company issued 2,499,943 common shares for all
the 24,999,236 outstanding common shares of Little Prince. The shares
of Little Prince were then cancelled and the separate corporate
existence of this company ceased, with the Company surviving to all of
Little Prince's assets and liabilities. For accounting purposes, the
acquisition was treated as a recapitalization of the Company, with the
Company as the acquiror. The 2,499,943 shares issued are treated as
issued for cash and are shown outstanding for all periods presented in
the same manner as for a stock split.
The financial statements of the Company reflect its results of
operations for the period from January 31, 1996 (inception) to December
31, 1996 and for the year ended December 31, 1997. Because it was the
acquiree for accounting purposes, the results of operations for Little
Prince are not included for the period from January 1, 1996 to December
6, 1996, the date of merger. Pro forma financial information for the
merger transaction is not presented as, at the date of the transaction,
Little Prince was considered a public shell and accordingly, the
transaction was not considered a business combination.
On February 12, 1997, at a special meeting of the shareholders, a
resolution was passed to effect a twenty-for-one reverse stock split as
of February 13, 1997. The effect of this reverse stock split was to
reduce the issued and outstanding shares to 193,127.
The Company intends to look for investments throughout the world. The
Company discontinued its theatrical productions operations through the
disposition of LPPL (see Note 5).
F-7
<PAGE>
ATLANTIC INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
The Company is dependent on a major shareholder to finance its
administrative expenses. The shareholder has pledged to continue to
fund the Company's cash needs to allow it to meet its liabilities
through at least December 31, 1998 if the Company remains inactive or
cannot generate revenue sufficient to meet its obligations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial
statements, and reported amounts of revenues and expenses
during the fiscal year. Actual results could differ from those
estimates.
b. Cash Equivalents
The Company considers all highly liquid investments with
maturities of three months or less when purchased to be cash
equivalents.
c. Foreign Currency Translation
Balance sheet amounts denominated in foreign currencies are
translated into U.S. dollars using the year end rate of
exchange. Revenues, income, expenses and losses denominated in
foreign currencies are translated at the average exchange rate
for the year.
d. Earnings per Share
The Company adopted SFAS 128 "Earnings Per Share" in these
financial statements. The adoption was not material to the
Company.
Income per common share is computed on the basis of the
weighted average shares of common stock outstanding. At
December 31, 1997 this average was 193,127 (1996 - 125,199).
Potential common shares are included if dilutive.
e. Recognition of Gain from Disposition of Subsidiary
F-8
<PAGE>
ATLANTIC INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
The Company reported the disposition of LPPL in accordance
with the SEC's SAB Topic 5E, which requires that the Company
not recognize the gain on disposition until it can be
reasonably determined that the risks of LPPL's business have
been transferred to the purchaser. As discussed in Note 5,
the risks and all incidents of ownership were transferred
during the year ended December 31, 1997 and accordingly, the
gain was recognized in that period. Operating losses but not
operating income of the divested business were included in
the Company's results of operations for the period ended
December 31, 1996.
3. RELATED PARTY TRANSACTIONS
A major shareholder of the Company, Patchouli Foundation ("Patchouli"),
advanced funds to the Company and Little Prince in order to allow them
to meet their obligations to creditors as follows:
For the period from
For the year ended January 31, 1996 (inception)
December 31, 1997 to December 31, 1996
----------------- --------------------
Funds advanced to the
Company (and Little
Prince in 1996 only) $30,959 $160,491
Charges for administrative
services provided by
Patchouli 10,000 10,000
------ -------
Total advanced to $40,959 $170,491
the Company ====== =======
Balance due to Patchouli
at the end of the period $41,450 $ 491
====== ========
As of December 31, 1996, the Company issued 1,360,000 common shares
(68,000 after the effect of a 20 for 1 reverse stock split) to
Patchouli in satisfaction of $170,000 of the balance then due, which
included $10,000 of administrative services provided to the Company.
The issuance of 80,000 of the common shares (4,000 after the effect of
a 20 for 1 reverse stock split) was based on the fair value of the
services received.
The attorney-in-fact of Patchouli is a director and officer of the
Company.
F-9
<PAGE>
ATLANTIC INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
The balance due to Patchouli at December 31, 1997 does not accrue
interest and is payable on demand. It is not practicable to estimate
the fair value of this payable since it is not the result of an
arm's-length transaction and does not resemble any marketable financial
instruments.
4. INCOME TAXES
Income taxes have not been provided due to the Company's loss from
operations for the period ended December 31, 1996 and its utilization
of net operating losses for the year ended December 31, 1997.
Actual tax expense was less than the amount of $44,700 computed by
applying the U.S. federal income tax rate of 34% to income before tax.
The reasons for this difference are as follows:
% of Pretax
Amount Income
------ ------
Computed "expected" rate $ 44,700 34.00%
Reduction due to benefit from lower tax brackets (10,200) (7.75)
Reduction in taxes resulting from net operating
loss carryover (34,500) (26.25)
-------- -------
Actual tax expense $ -0- 0.00%
======== =======
As of December 31, 1997, the Company had a net operating loss
carryforward of approximately $1,818,000 that may be offset against
future taxable income resulting in a deferred tax asset of
approximately $618,000. A valuation allowance for the full amount was
recorded due to the uncertainty that the Company will utilize the
losses in the future. The valuation allowance decreased by
approximately $44,000 during the year ended December 31, 1997 due to
the utilization of the losses against income.
Net operating losses expire as follows:
Year Ending December 31 Loss
----------------------- ----
2008 $1,611,000
2009 73,000
2010 74,000
2011 60,000
----------
$1,818,000
F-10
<PAGE>
ATLANTIC INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
The Company's net operating loss includes the loss carryforward of
Little Prince to which the Company succeeded pursuant to Section 381 of
the Internal Revenue Code and related regulations. Little Prince's net
operating losses were approximately $1,889,000 at the time of
acquisition.
5. DISCONTINUED OPERATIONS
On July 22, 1996, Little Prince sold all of the shares in its 100%
owned subsidiary, LPPL. Under the terms of the sales agreement, there
were circumstances under which the shares could revert to Little Prince
within one year of the date of sale. Due to this provision, Little
Prince was deemed not to have transferred the risks of LPPL's business
as of December 31, 1996. Pursuant to the SEC's SAB Topic 5E, Little
Prince continued to carry the assets and liabilities of LPPL on its
balance sheet on December 6, 1996 when it was merged into the Company.
As of July 22, 1997, one year after the sale of LPPL, the reversion
provision expired, and the Company then recognized a gain on the
disposition of LPPL of $155,825.
6. AUTHORITATIVE PRONOUNCEMENTS
In June 1997, the FASB issued SFAS 130, "Reporting Comprehensive
Income" and SFAS 131, "Disclosures About Segments of an Enterprise and
Related Information." In February 1998, the FASB issued SFAS 132,
"Employer's Disclosure About Pensions and Other Postretirement
Benefits." All three are effective for financial statements for fiscal
years beginning after December 15, 1997. The Company will adopt these
statements on January 1, 1998. Adoption is not expected to have a
material impact on financial position and results of operations.
F-11
<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) Agreement and Plan of Merger dated February 9, 1996, between Little
Prince Productions, Ltd. and Atlantic Industries, Inc.
2.2(2) Certificate of Merger of Little Prince Productions, Ltd., a New
York corporation into Atlantic Industries, Inc., a Colorado
corporation, dated March 29, 1996, under Section 907 of the New
York Business Corporation Law.
2.3(2) Articles of Merger of Little Prince Productions, Ltd., a New York
corporation into Atlantic Industries, Inc., under Section 7-111-107
of the Colorado Business Corporation Act.
2.4(3) Stock Purchase Agreement dated as of July 22, 1996 between the
Company and Frances Katz Levine.
3.1(2) Articles of Incorporation of Atlantic Industries, Inc., as amended.
3.2(2) Amended and Restated Bylaws of Atlantic Industries, Inc.
27* Financial Data Schedule
- ---------------
*Filed herewith.
(1) Filed with the Securities and Exchange Commission as an exhibit to the
Company's Form 10-K, dated December 31, 1995, which exhibit is incorporated
herein by reference.
(2) Filed with the Securities and Exchange Commission as an exhibit to the
Company's Form 10-KSB dated December 31, 1996, which exhibit is incorporated
herein by reference.
(3) Filed with the Securities and Exchange Commission as an exhibit to the
Company's Form 10-QSB, dated June 30, 1996, which exhibit is incorporated
herein by reference.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ATLANTIC
INDUSTRIES, INC.'S FINANCIAL STATEMENTS AS OF DECEMBER 31, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 45,450
<BONDS> 0
0
0
<COMMON> 1,931
<OTHER-SE> (47,381)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (24,398)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (24,398)
<INCOME-TAX> 0
<INCOME-CONTINUING> (24,398)
<DISCONTINUED> 155,825
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 131,427
<EPS-PRIMARY> .68
<EPS-DILUTED> .68
</TABLE>
