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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
AMENDMENT NO. 1
BEEBA'S CREATIONS, INC.
(Name of Issuer)
BEEBA'S CREATIONS, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK
(Title of Class of Securities)
076590108
(CUSIP Number of Class of Securities)
Steven P. Wyandt
President
Beeba's Creations, Inc.
9220 Activity Road
San Diego, California 92126
(619) 549-2922
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
Copy to:
James A. Mercer III
Luce, Forward, Hamilton & Scripps
600 West Broadway, Suite 2600
San Diego, CA 92101
(619) 699-2447
JULY 20, 1995
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee
$9,600,000 $1,920
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* Based upon $8.00 cash per share for 1,200,000 shares.
[X] Check here if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
<TABLE>
<S> <C>
Amount Previously Paid: $1,920 Filing Party: Beeba's Creations, Inc.
Form or Registration No.: Schedule 13e-4 Date Filed: July 17, 1995
</TABLE>
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ITEM 1. SECURITY AND ISSUER.
(b) The conditions to the offer set forth in paragraphs (a)(3),
(b)(4), (b)(5) and (c) of section 5 of the Offer to Purchase, dated July 20,
1995, which is filed as Exhibit 99.a(1), have been revised to reflect that the
existence or occurrence of certain events will be determined in the Company's
"reasonable", as opposed to "sole", judgment.
2
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
BEEBA'S CREATIONS, INC.
By: STEVEN P. WYANDT
---------------------------
Steven P. Wyandt, President
Dated: July 26, 1995
3
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
99.a(1) Form of Offer to Purchase, dated July 20, 1995.
</TABLE>
4
<PAGE> 1
EXHIBIT 99.a(1)
BEEBA'S CREATIONS, INC.
OFFER TO PURCHASE FOR CASH UP TO 1,200,000 SHARES OF ITS
COMMON STOCK AT A PURCHASE PRICE OF $8.00 NET PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.
NEW YORK CITY TIME, ON FRIDAY, AUGUST 18, 1995,
UNLESS THE OFFER IS EXTENDED.
Beeba's Creations, Inc., a California corporation (the "Company"),
invites its shareholders to tender 1,200,000 shares of its Common Stock (the
"Shares"), at $8.00 per Share net to the shareholder, in cash (the "Purchase
Price"), upon the terms and subject to the conditions set forth in this Offer
to Purchase and the related Letter of Transmittal (which together constitute
the "Offer"). The Company reserves the right, in its sole discretion, to
purchase more than 1,200,000 Shares pursuant to the Offer. All Shares properly
tendered and not withdrawn prior to the expiration of the Offer will be
purchased at the Purchase Price, upon the terms and subject to the conditions
of the Offer, including its proration terms.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 5.
The Shares are listed and principally traded on the National
Association of Securities Dealers National Market System (NASDAQ). On July 14,
1995, the last trading day before the Company announced its intention to
commence the Offer, the closing per Share sales price as reported on NASDAQ was
$5.50. The Company urges shareholders to obtain current market quotations for
the Shares prior to tendering any Shares pursuant to the Offer. See
Introduction and Section 6.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR TO REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. EACH SHAREHOLDER MUST MAKE HIS OR HER
OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
SEE INTRODUCTION AND SECTION 7 FOR INFORMATION CONCERNING THE INTENTION OF
ARJUN C. WANEY, THE COMPANY'S PRINCIPAL SHAREHOLDER, IN CONNECTION WITH THE
OFFER. THE COMPANY HAS BEEN ADVISED THAT CERTAIN OF ITS DIRECTORS AND OFFICERS
INTEND TO TENDER SHARES PURSUANT TO THE OFFER. SEE INTRODUCTION AND SECTION 7.
The objective of the Offer is to deliver directly to shareholders a
portion of the Company's current value and to provide the Company's
shareholders with a means of furthering their investment objectives with
respect to the Shares. The Offer provides shareholders who wish to currently
realize a portion of, or perhaps all, their investment in the Company in cash
with an opportunity to sell a portion of, or perhaps all, their Shares at a
premium over current market prices of the Shares. The Offer also is intended
to provide shareholders with an opportunity to increase their proportionate
ownership interest in the Company, either by not participating in the Offer or
by participating in the Offer and reinvesting their after-tax proceeds in
additional Shares. See Sections 9 and 13.
<PAGE> 2
IMPORTANT
Any shareholder desiring to tender all or any portion of the Shares
should either (i) complete and sign a Letter of Transmittal or a facsimile copy
thereof in accordance with the instructions in such Letter of Transmittal, mail
or deliver it and any other required documents to American Stock Transfer &
Trust Company (the "Depositary"), and either mail or deliver the certificates
for such Shares to the Depositary (with all such other documents) or follow the
procedure for book-entry transfer set forth in Section 2; or (ii) request such
shareholder's broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for such shareholder. A shareholder having Shares
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact that entity if such shareholder desires to tender
any such Shares. Shareholders who desire to tender Shares and whose
certificates for such Shares cannot be delivered to the Depositary or who
cannot comply with the procedures for book-entry transfer or whose other
required documents cannot be delivered to the Depositary, in any such case,
prior to the expiration of the Offer must tender such Shares by following the
procedures for guaranteed delivery set forth in Section 2.
Questions and requests for assistance or for additional copies of this
Offer to Purchase may be directed to D.F. King & Co., Inc., the Information
Agent, at the addresses and telephone numbers set forth on the back cover of
this Offer to Purchase.
July 20, 1995
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
THE COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE AND IN THE LETTER OF
TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION, INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
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Section Page
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<S> <C> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. Number of Shares; Extension; Proration . . . . . . . . . . . . . 2
2. Procedures for Tendering Shares . . . . . . . . . . . . . . . . 3
3. Withdrawal Rights . . . . . . . . . . . . . . . . . . . . . . . 6
4. Purchase of Shares and Payment of Purchase Price . . . . . . . . 6
5. Certain Conditions of the Offer . . . . . . . . . . . . . . . . 7
6. Price Range of Shares; Dividends . . . . . . . . . . . . . . . . 9
7. Interest of Certain Persons; Transactions and
Arrangements Concerning the Shares . . . . . . . . . . . . . . 10
8. Source and Amount of Funds . . . . . . . . . . . . . . . . . . . 11
9. Background and Purpose of the Offer . . . . . . . . . . . . . . 11
10. Certain Information About the Company . . . . . . . . . . . . . 12
11. Effects of the Offer on the Market for Shares;
Registration under the Exchange Act . . . . . . . . . . . . . 17
12. Certain Legal Matters; Regulatory Approval . . . . . . . . . . . 17
13. Certain Federal Income Tax Consequences . . . . . . . . . . . . 18
14. Certain Limitations on Purchases of Shares by the Company . . . 20
15. Extension of the Tender Period; Termination; Amendments . . . . 21
16. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . 21
17. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 22
SCHEDULE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
i
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TO THE HOLDERS OF COMMON STOCK OF BEEBA'S CREATIONS, INC.:
INTRODUCTION
Beeba's Creations, Inc. (the "Company"), hereby offers to purchase,
and invites its shareholders to tender, up to 1,200,000 shares of its common
stock (the "Shares"), at $8.00 per Share, net to the seller, in cash, (the
"Purchase Price"), upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (the "Letter of
Transmittal," which together with this Offer to Purchase, constitute the
"Offer"). The Company reserves the right, in its sole discretion, to purchase
more than 1,200,000 Shares pursuant to the Offer. See Section 1. All Shares
properly tendered and not withdrawn prior to the expiration of the Offer will
be purchased at the Purchase Price, upon the terms and subject to the
conditions of the Offer, including the proration terms described below. Shares
not purchased because of proration will be returned.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 5.
Upon the terms and subject to the conditions of the Offer, if at the
expiration of the Offer more than 1,200,000 Shares are properly tendered, the
Company will buy Shares on a pro rata basis (with appropriate adjustments to
avoid purchases of fractional Shares) from all shareholders who properly tender
Shares and do not withdraw them prior to the expiration of the Offer. See
Sections 1 and 3. The Company will return all Shares not purchased because of
proration. Tendering shareholders will not be obligated to pay brokerage
commissions, solicitation fees or, subject to Instruction 6 of the Letter of
Transmittal, stock transfer taxes because of the Company's purchase of Shares
pursuant to the Offer. In addition, the Company will pay all fees and expenses
of D.F. King & Co., Inc. (the "Information Agent") and American Stock Transfer
& Trust Company (the "Depositary") in connection with the Offer. See Section
16.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR TO REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. EACH SHAREHOLDER MUST MAKE HIS OR HER
OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
The Company has been advised that each of its directors and executive
officers intend to tender Shares on at least a pro rata basis with the
aggregate of all Shares tendered by other shareholders. See Section 7.
Plan Administrative Committee. Shareholders who are participants in
the Company's Retirement Savings Plan (the "Savings Plan") and the Employee
Stock Purchase Plan (the "Stock Plan") (collectively the "Plans") may instruct
the Administrative Committee as agent under such Plans, to tender part or all
of the Shares attributed to the participant's account.
The Shares are listed and principally traded on the National
Association of Securities Dealers National Market System (NASDAQ) under the
symbol "BEBA". On July 14, 1995, the last trading day before the Company
announced its intention to commence the Offer, the closing per Share sales
price as reported on NASDAQ was $5.50. The Company urges shareholders to
obtain current market quotations for the Shares prior to tendering any Shares
pursuant to the Offer. See also Section 6 regarding entitlement to dividends.
The 1,200,000 Shares that the Company is offering to purchase pursuant
to the Offer represent approximately 50.04% of the 2,398,224 Shares issued and
outstanding as of July 14, 1995. In addition, as of such date, an aggregate of
up to 92,100 additional Shares were issuable upon exercise of outstanding stock
options.
<PAGE> 5
Shareholders whose Shares are not purchased in the Offer will obtain a
proportionate increase in their ownership interest in the Company immediately
after consummation of the Offer, depending on the number of Shares purchased as
a result of the Offer. Any Shares acquired by the Company pursuant to the
Offer will initially be cancelled and become authorized and unissued Shares and
will be available for issuance by the Company without further shareholder
action (except as required by applicable law or the rules of any securities
exchange on which the Shares are then listed) for general or other corporate
purposes, including stock splits or dividends, acquisitions, the raising of
additional capital for use in the Company's business and the implementation of
employee benefit plans. See also Section 9.
This Offer to Purchase and the Letter of Transmittal are being mailed
to holders of record of Shares and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the Company's shareholder list or, if applicable,
who are listed as participants in a clearing agency's security position
listing, for subsequent transmittal to beneficial owners of Shares.
1. NUMBER OF SHARES; EXTENSION; PRORATION.
Number of Shares. Upon the terms and subject to the conditions of the
Offer, the Company will accept for payment and pay for (and thereby purchase)
up to 1,200,000 Shares or such lesser number of Shares as are properly
tendered, and not withdrawn in accordance with Section 3, prior to the
Expiration Date (as defined below) at a price of $8.00 per Share net to the
seller in cash. The term "Expiration Date" means 5:00 P.M., New York City
time, on August 18, 1995, unless and until the Company shall have extended the
period of time during which the Offer will remain open, in which event the term
"Expiration Date" shall refer to the latest time and date at which the Offer,
as so extended by the Company, shall expire. If the Offer is over-subscribed,
Shares tendered and not withdrawn prior to the Expiration Date will be
prorated. The proration period also expires at the Expiration Date.
The Company reserves the right to purchase more than 1,200,000 Shares
pursuant to the Offer. In accordance with applicable regulations of the
Securities and Exchange Commission (the "Commission"), the Company may accept
for payment pursuant to the Offer an additional amount of Shares not to exceed
2% of the Shares (approximately 47,965 Shares based upon Shares outstanding as
of July 14, 1995) without extending the Offer.
See below and Section 15 for a description of the Company's rights to
extend the time during which the Offer is open and to delay, terminate or amend
the Offer. See also Section 5 for a description of certain conditions of the
Offer.
Extension. If the following events occur:
(a) the Company increases or decreases the price to be paid
for the Shares, or the Company increases the number of Shares being
sought and any such increase in the number of Shares being sought
exceeds 2% of the outstanding Shares, or the Company decreases the
number of Shares being sought, and
(b) the Offer is scheduled to expire less than ten business
days from and including the date that notice (the "Notice") of such
increase or decrease is first published, sent or given in the manner
set forth in Section 15,
then the Offer will be extended so that it will not expire until at least the
end of the tenth business day from and including the date of such Notice. For
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or federal holiday until 5:00 P.M., New York City time on such day.
2
<PAGE> 6
Acceptance in Full. Upon the terms and subject to the conditions of
the Offer, if the number of Shares properly tendered and not withdrawn prior to
the Expiration Date is less than or equal to 1,200,000 Shares (or such greater
number of Shares as the Company may elect to purchase pursuant to the Offer),
the Company will, upon the terms and subject to the conditions of the Offer,
accept for payment at the Purchase Price all Shares so tendered.
Proration. Upon the terms and subject to the conditions of the Offer,
in the event that at the Expiration Date a greater number of Shares than
1,200,000 Shares (or such greater number of Shares as the Company may elect to
purchase pursuant to the Offer) are properly tendered, the Company will accept
all Shares properly tendered and not withdrawn prior to the Expiration Date on
a pro rata basis (with appropriate adjustments to avoid purchases of fractional
shares) based upon the number of such Shares.
In the event the proration of tendered Shares is required, the Company
will determine the final proration factor as promptly as practicable following
the Expiration Date. Proration for each shareholder tendering Shares shall be
based on the ratio of the number of Shares tendered by such shareholder to the
total number of Shares tendered by all shareholders. Although the Company does
not expect to be able to announce the final results of any proration until
approximately seven trading days after the Expiration Date, it will announce
preliminary results of the prorations by press release as promptly as
practicable following the Expiration Date. Shareholders may obtain such
preliminary information from the Information Agent and may also be able to
obtain such information from their brokers or other nominees. All Shares not
purchased pursuant to the Offer because of proration will be returned to the
tendering shareholders at the Company's expense as promptly as practicable
following the Expiration Date.
2. PROCEDURES FOR TENDERING SHARES.
Proper Tender of Shares. For Shares to be properly tendered pursuant
to the Offer:
(a) the certificates for such Shares or confirmation of
delivery of such Shares pursuant to the procedure for book-entry
transfer set forth below, together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) including any
required signature guarantees, and any other documents required by the
Letter of Transmittal, must be received prior to the Expiration Date
by the Depositary at its address set forth on the back cover of this
Offer to Purchase; or
(b) the tendering shareholder must comply with the guaranteed
delivery procedure set forth below.
It is a violation of Section 14(e) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and Rule 14e-4 promulgated thereunder,
for a person to tender Shares for such person's own account unless the person
so tendering:
(a) owns such Shares; or
(b) owns other securities convertible into or exchangeable
for Shares or owns an option, warrant or right to purchase Shares and
intends to acquire such Shares for tender by conversion, exchange or
exercise of such option, warrant or right.
Section 14(e) and Rule 14e-4 contain a similar restriction applicable to a
tender or guarantee of a tender on behalf of another person.
The acceptance of Shares by the Company for payment will constitute a
binding agreement between the tendering shareholder and the Company upon the
terms and subject to the conditions of the Offer,
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<PAGE> 7
including the tendering shareholder's representation that (i) such shareholder
owns the Shares being tendered within the meaning of Rule 14e-4; and (ii) the
tender of such Shares complies with Rule 14e-4.
Signature Guarantees and Method of Delivery. No signature guarantee
is required on a Letter of Transmittal (i) if such Letter of Transmittal is
signed by the registered institutional holder of Shares (which term, for
purposes of the Offer, includes any participant in The Depository Trust
Company, the Philadelphia Depository Trust Company or the Midwest Securities
Trust Company [together the "Book-Entry Transfer Facilities"] whose name
appears on a security position listing as the holder of such Shares) tendered
therewith and such holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on
the Letter of Transmittal; or (ii) if Shares are tendered for the account of a
member firm of a registered national securities exchange, a member of the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office, branch or agency in the United States (each such
entity being hereinafter referred to as an "Eligible Institution").
In all other cases, all signatures on a Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 1 of the Letter of
Transmittal. If a certificate representing Shares is registered in the name of
a person other than the signer of a Letter of Transmittal, or if payment is to
be made, or Shares not purchased or tendered are to be issued, to a person
other than the registered holder, the certificate must be endorsed or
accompanied by an appropriate stock power, in either case signed exactly as the
name of the registered holder appears on the certificate, with the signature on
the certificate or stock power guaranteed by an Eligible Institution. In all
cases, payment for Shares tendered and accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or timely confirmation of a book-entry transfer
of such Shares into the Depositary's account at a Book-Entry Transfer
Facility), (ii) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) and (iii) any other documents required by the Letter of
Transmittal. The method of delivery of all documents, including stock
certificates, the Letter of Transmittal and any other required documents, is at
the election and risk of the tendering shareholder. If delivery is by mail,
registered mail with return receipt requested, properly insured, is
recommended.
Book-Entry Transfer. The Depositary will establish an account with
respect to the Shares at the Book-Entry Transfer Facilities for purposes of the
Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in a Book-Entry Transfer Facility's
system may make book-entry transfer of Shares by causing such Facility to
transfer such Shares into the Depositary's account in accordance with such
Facility's procedure for such transfer. Even though delivery of Shares may be
effected through book-entry transfer into the Depositary's account at one of
the Book-Entry Transfer Facilities, either (i) a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees and any other required documents must be transmitted to
and received by the Depositary at its address set forth on the back cover of
this Offer to Purchase prior to the Expiration Date; or (ii) the guaranteed
delivery procedure set forth below must be followed. Delivery of a Letter of
Transmittal and any other required documents to one of the Book-Entry Transfer
Facilities does not constitute delivery to the Depositary.
Guaranteed Delivery. If a shareholder desires to tender Shares
pursuant to the Offer and such shareholder's certificates cannot be delivered
to the Depositary prior to the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis or all required documents cannot
be delivered to the Depositary prior to the Expiration Date, such Shares may
nevertheless be tendered provided that all of the following conditions are
satisfied:
(a) such tender is made by or through an Eligible Institution;
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<PAGE> 8
(b) the Depositary receives (by hand, mail or facsimile
transmission) prior to the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery substantially in the form
the Company has provided with this Offer to Purchase; and
(c) the certificates for all tendered Shares in proper form
for transfer or confirmation of book-entry transfer of such Shares
into the Depositary's account at any Book-Entry Transfer Facility,
together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other documents required by
the Letter of Transmittal, are received by the Depositary within five
trading days after the date the Depositary receives such Notice of
Guaranteed Delivery.
Stock Plan; Savings Plan. Shareholders who are participants in the
Stock Plan or the Savings Plan will receive separate instructions in connection
with the Offer from the Administrative Committee for each Plan. If a Plan
participant authorizes the tender of Shares, the number of Shares in the
participant's Plan account will be reduced by the number of Plan Shares that
are purchased. Any Plan Shares tendered but not purchased will be returned to
the participant's Plan account. Participants in the Plans may not use the
Letter of Transmittal to direct the tender of Shares in such accounts.
Participants in the Plans are urged to read the separate instructions
carefully.
Determination of Validity, Rejection of Shares, Waiver of Defects, No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, and the form, eligibility, validity (including time of receipt)
and acceptance for payment of any tender of Shares will be determined by the
Company, in its sole discretion, which determinations shall be final and
binding on all parties. The Company reserves the absolute right to reject any
or all tenders it determines not to be in proper form or the acceptance for
payment of or payment for which may, in the opinion of the Company's counsel,
be unlawful. The Company also reserves the absolute right to waive any defect
or irregularity in the tender of any particular Shares. No tender of Shares
will be deemed to be properly made until all defects and irregularities have
been cured or waived. Neither the Company nor the Depositary nor any other
person is or will be obligated to give notice of any defects or irregularities
in tenders, and neither of them will incur any liability for failure to give
such notice.
Federal Income Tax Withholding. To prevent back up federal income tax
withholding equal to 31% of the gross payments made pursuant to the Offer, each
shareholder who does not otherwise establish an exemption from such withholding
must certify to the Depositary such shareholder's correct social security
number or taxpayer identification number (or certify that such taxpayer is
awaiting such number) and provide certain other information by completing the
Substitute Form W-9 included in the Letter of Transmittal. A foreign
shareholder who is an individual must submit a Form W-8 (obtainable from the
Depositary) in order to avoid back up withholding.
The Depositary will withhold 30% of the gross payment payable to a
foreign shareholder unless the Depositary determines that a reduced rate of
withholding or an exemption from withholding is applicable. For this purpose,
a foreign shareholder is a shareholder that is not (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political
subdivision thereof, or (iii) any estate or trust the income of which is
subject to United States federal income taxation regardless of the source of
such income. The Depositary will determine a shareholder's status as a foreign
shareholder and eligibility for a reduced rate of, or an exemption from,
withholding by reference to the shareholder's address and to any outstanding
certificates or statements concerning eligibility for a reduced rate of, or
exemption from, withholding unless facts and circumstances indicate that
reliance is not warranted. A foreign shareholder who has not previously
submitted the appropriate certificates or statements with respect to a reduced
rate of, or exemption from, withholding for which such shareholder may be
eligible should consider doing so in order to avoid over-withholding. A
foreign shareholder may be eligible to obtain a refund of tax withheld if such
shareholder meets one of the tests for
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<PAGE> 9
capital gain or loss treatment described in Section 13 or its otherwise able to
establish that no tax or a reduced amount of tax was due.
For a discussion of certain other federal income tax consequences to
tendering shareholders, see Section 13.
3. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section, a tender of Shares made
pursuant to the Offer is irrevocable. Shares tendered pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date and, unless
thereafter accepted for payment by the Company, may also be withdrawn after
5:00 P.M., New York City time, on September 18, 1995.
For a withdrawal to be effective, the Depositary must timely receive a
written, telegraphic, telex or facsimile transmission notice of withdrawal at
its address set forth on the back cover of this Offer to Purchase. Such notice
of withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares tendered, the number of Shares to be withdrawn
and the name of the registered holder, if different from that of the person who
tendered such Shares. If the certificates for Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the
physical release of such certificates, the tendering shareholder must also
submit the serial numbers of the particular certificates evidencing such Shares
and the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible Institution).
If Shares have been tendered pursuant to the procedure for book-entry transfer
set forth in Section 2, the notice of withdrawal must specify the name and the
account number at the applicable Book-Entry Transfer Facility to be credited
with the withdrawn Shares and otherwise comply with the procedures of such
facility.
All questions as to the form and validity (including time of receipt)
of notices of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding on all parties.
Neither the Company nor the Depositary nor any other person is or will be
obligated to give notice of any defects or irregularities in any notice of
withdrawal, and neither of them will incur any liability for failure to give
such notice. Any Shares properly withdrawn will thereafter be deemed not
tendered for purposes of the Offer. Withdrawn Shares may, however, be
retendered prior to the Expiration Date by again following any of the
procedures set forth in Section 2.
4. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
Upon the terms and subject to the conditions of the Offer, the Company
will accept for payment and pay for (and thereby purchase) Shares properly
tendered, and not withdrawn prior to the Expiration Date, as promptly as
practicable following the Expiration Date. For purposes of the Offer, the
Company will be deemed to have accepted for payment (and thereby purchased),
subject to proration, Shares which are tendered and not withdrawn prior to the
Expiration Date if and when it gives oral and written notice to the Depositary
of its acceptance of such Shares for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, promptly
following the Expiration Date the Company will accept for payment and pay a
single per Share Purchase Price for 1,200,000 Shares (subject to increase or
decrease as provided in Section 1 and Section 15) or such lesser number of
Shares as are properly tendered and not withdrawn as permitted in Section 3.
Payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the aggregate Purchase Price therefor with the Depositary
which will act as the agent for shareholders whose Shares have been accepted
for payment for the purpose of receiving payment from the Company and
transmitting payment to such shareholders. In all cases, payment for Shares
accepted for payment pursuant
6
<PAGE> 10
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or of a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities), a properly completed and duly executed Letter of
Transmittal (or duly executed photocopy thereof) and any other documents
required by the Letter of Transmittal. The Company expressly reserves the
right, in its sole discretion, to delay the acceptance for payment of or
payment for Shares in order to comply, in whole or in part, with any applicable
legal requirement or court order. See Sections 5 and 12. The Company's
reservation of the right to delay payment for Shares that the Company has
accepted for payment is limited by Rule 13e-4(f)(5) promulgated under the
Exchange Act, which rule requires that the Company pay the consideration
offered or return the Shares tendered promptly after termination or withdrawal
of a tender offer.
In the event of proration, the Company will determine the final
proration factor and pay for Shares accepted for payment promptly following the
Expiration Date. However, the Company does not expect to be able to announce
the final results of any proration until approximately seven trading days after
the Expiration Date. Certificates for all Shares not purchased, including
Shares not purchased because of proration, will be returned (or, in the case of
Shares tendered by book-entry transfer, such Shares will be credited to the
account maintained with one of the Book-Entry Transfer Facilities by the
participant therein who so delivered such Shares) as soon as practicable
following the Expiration Date without expense to the tendering shareholders.
Under no circumstances will the Company pay interest on the aggregate Purchase
Price or any portion thereof.
The Company will pay the stock transfer taxes, if any, payable on
account of the transfer to it of Shares purchased pursuant to the Offer;
provided, however, that if payment of the Purchase Price is to be made to, or
(in the circumstances permitted by the Offer) if unpurchased Shares are to be
registered in the name of any person other than the registered holder, or if
tendered certificates are registered in the name of any person other than the
person signing the Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder or such other person) payable
on account of such payment, transfer or tender will be deducted from the
Purchase Price paid to any such holder or person unless evidence satisfactory
to the Company of the Payment of such taxes or exemption therefrom is
submitted. See Instruction 6 of the Letter of Transmittal.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY
AND TO SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL MAY
BE SUBJECT TO REQUIRED FEDERAL INCOME TAX WITHHOLDING OF 31% OF THE GROSS
PROCEEDS PAYABLE TO SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE
SECTION 2.
5. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company shall
not be required to accept for payment or pay for any Shares tendered, and may
terminate or amend the Offer or may postpone the acceptance for payment of, or
the payment for, Shares tendered, if at any time on or after July 14, 1995, and
at or before the time of acceptance for payment of or payment for any such
Shares, any of the following events shall have occurred (or shall have been
determined by the Company to have occurred) which, in the Company's sole
judgment in any such case and regardless of the circumstances giving rise
thereto (including any action or omission to act by the Company), makes it
inadvisable to proceed with the Offer or with such acceptance for payment or
payment:
(a) there shall be any claim, action or proceeding
threatened, pending or instituted, or any consent, license,
authorization, permit, or approval withheld, or any statute, rule,
regulation, judgment, order or injunction threatened, proposed,
sought, promulgated, enacted, entered, amended, enforced or deemed to
be applicable to the Offer or the Company or any of its subsidiaries,
by or before any court or any government or governmental, regulatory
or administrative authority, agency or tribunal,
7
<PAGE> 11
domestic or foreign, which challenges the making of the Offer or the
acquisition of Shares pursuant to the Offer or otherwise relates in
any manner to the Offer or which could directly or indirectly:
(1) make the acceptance for payment of, or payment
for, some or all of the Shares illegal or otherwise restrict
or prohibit consummation of the Offer;
(2) delay or restrict the ability of the Company, or
render the Company unable, to accept for payment or pay for
some or all of the Shares;
(3) in the Company's reasonable judgment, materially
affect the business, condition (financial or other), income,
operations or prospects of the Company and its subsidiaries,
taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of the business of the Company
or any of its subsidiaries; or
(4) materially impair the Offer's contemplated
benefits to the Company; or
(b) there shall have occurred:
(1) the declaration of any banking moratorium or
suspension of payments in respect of banks in the United
States;
(2) any general suspension of trading in, or
limitation on prices for, securities on any United States
national securities exchange or in the over-the-counter
market;
(3) the commencement of a war, armed hostilities or
any other national or international crisis directly or
indirectly involving the United States;
(4) any limitation (whether or not mandatory) by any
governmental, regulatory or administrative agency or authority
on, or any event that in the Company's reasonable judgment
might affect, the extension of credit by banks or other lending
institutions in the United States;
(5) any significant decrease in the market price of
the Shares ($5.50 per Share at the close of business on July
14, 1995) or in the market prices of equity securities
generally in the United States or any change in the general
political, economic or financial conditions in the United
States or abroad that, in the Company's reasonable judgment,
could have a material adverse effect on the business, condition
(financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole;
(6) in the case of any of the foregoing existing at
the time of the commencement of the Offer, a material
acceleration or worsening thereof;
(7) it is publicly disclosed or the Company learns
that any person or "group" (within the meaning of section
13(d)(3) of the Exchange Act) has acquired, or proposes to
acquire, more than five percent of the outstanding Shares,
other than acquisitions of additional Shares representing not
more than two percent of the outstanding Shares by any person
or group owning more than five percent of the outstanding
Shares on the date hereof, as disclosed in a Schedule 13D or
13G on file with the Commission on that date;
(8) a default has occurred under the Credit Agreement
(as defined in Section 8), and/or a representation or warranty
thereunder of the Company is no longer accurate; or
8
<PAGE> 12
(9) any decline in either the Dow Jones Industrial
Average (4,708.82 at the close of business on July 14, 1995)
or the Standard & Poor's Index of 500 Companies (559.88 at the
close of business on July 14, 1995) by an amount in excess of
10% measured from the close of business on July 14, 1995; or
(c) any change shall occur or be threatened in the business,
condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, which, in the
Company's reasonable judgment, is or may be material to the Company
or its shareholders; or
(d) a tender or exchange offer for any or all of the Shares
(other than the Offer), or any merger, business combination or other
similar transaction with or involving the Company or any of its
subsidiaries, shall have been proposed, announced or made by any
person, including the Company, or the Company shall determine to make
a disposition of all or substantially all of its assets other than in
the regular course of its business.
The foregoing conditions are for the Company's sole benefit and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition (including any action or omission to act by the Company) or may be
waived by the Company in whole or in part. The Company's failure at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time. Any determination by the Company
concerning any of the events described in this Section and any related judgment
by the Company regarding the inadvisability of proceeding with the purchase of
or payment for Shares tendered shall be final and binding on all parties.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are traded on NASDAQ. The following table sets forth for
the fiscal periods indicated the high and low closing per Share sales prices on
NASDAQ and the dividends declared per Share over the past two years as reported
in published financial sources:
9
<PAGE> 13
<TABLE>
<CAPTION>
High Low Dividends
---- --- ---------
<S> <C> <C> <C>
Fiscal 1995
4th Quarter (through July 14, 1995) 5 1/2 3 7/8
3rd Quarter 4 3/4 3
2nd Quarter 4 3/4 3 9/16
1st Quarter 4 1/4 3 1/4
Fiscal 1994
4th Quarter 4 3/8 3
3rd Quarter 6 1/4 3 7/8
2nd Quarter 7 3/4 4 3/4 .08
1st Quarter 8 1/4 7 1/4 .08
Fiscal 1993
4th Quarter 10 7 1/2 .08
</TABLE>
On July 14, 1995, the last trading day before the Company announced
its intention to commence the Offer, the closing per Share sales price as
reported on NASDAQ was $5.50. The Company urges shareholders to obtain current
market quotations for the Shares prior to tendering any Shares pursuant to the
Offer.
In April 1994, the Company suspended its regular quarterly dividend,
and has not declared a dividend since January 31, 1994. Were any dividend to
be announced, shareholders would not be entitled to receive any dividend with
respect to Shares tendered and purchased by the Company prior to the record
date for such dividend.
The timing and amount of future dividends declared by the Board of
Directors is at the discretion of the Board of Directors and will be dependent
upon the Company's results of operations and financial condition, cash
requirements for its business, contractual restrictions on payment of
dividends, economic and market conditions and other factors deemed relevant by
the Company's Board of Directors.
7. INTEREST OF CERTAIN PERSONS; TRANSACTIONS AND ARRANGEMENTS CONCERNING
THE SHARES.
Mr. Arjun C. Waney is the beneficial owner of approximately 19.9% of
the outstanding Shares and may be deemed to control the Company.
As of July 14, 1995, the Company's directors and executive officers as
a group beneficially owned an aggregate of approximately 35.9% of the
outstanding Shares (which includes 90,000 Shares which the executive officers
of the Company have the right to acquire through exercises of stock options
within 60 days of July 20, 1995). See Schedule I.
The Company has been advised that each director and executive officer
will tender shares pursuant to this Offer on at least a pro rata basis with the
aggregate amount tendered by all other shareholders.
The Company engaged in no transactions involving Shares during the
forty business days prior to July 17, 1995. Purchases of Shares may have been
effected by the Savings Plan during the forty business days prior to July 17,
1995. The Trustee of such Plan reports quarterly to the Company in respect of
such purchases. The report for the three-month period ended June 30, 1995 is
not anticipated to be received by the Company until mid-August, 1995. The
Company does not believe such purchases have been material in amount.
10
<PAGE> 14
Except for transactions in the Shares for the account of executive
officers of the Company pursuant to the Plans, and by the Plans for the account
of all employees of the Company, based upon the Company's records and upon
information provided to the Company by its directors and executive officers,
neither the Company nor any of its subsidiaries nor, to the Company's
knowledge, any of the directors or executive officers of the Company, any of
its associates, or any person controlling the Company or any executive officer
or director of any such person has effected any transactions in the Shares
during the 40 business days prior to the date hereof.
Except as set forth in this Offer to Purchase, neither the Company
nor, to the Company's knowledge, any of its directors or executive officers, or
any person controlling the Company or any executive officer or director of any
such person, is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or indirectly, to the
Offer with respect to any securities of the Company (including, but not limited
in, any contract, arrangement, understanding or relationship concerning the
transfer or the voting of any such securities, joint ventures, loans or option
arrangements, puts or calls, guarantees of loans, guarantees against loss or
the giving or withholding of proxies, consents or authorizations).
8. SOURCE AND AMOUNT OF FUNDS.
Assuming that the Company purchases 1,200,000 Shares pursuant to the
Offer, the Company expects the maximum aggregate cost, including all fees and
expenses related to the Offer, to be approximately $9,675,000. It is
anticipated that the funds required to pay all such costs will be obtained from
cash and cash equivalents of the Company. The Company may also borrow a
portion of such funds pursuant to its Credit Agreement.
The Company has agreements (the "Credit Agreement") with Congress
Talcott Corporation ("Congress") pursuant to which the Company sells
substantially all of its trade accounts receivable on a pre-approved
non-recourse basis. Payment for such receivables is made at the time customers
make payment to Congress or, if a customer is financially unable to make
payment, within approximately 180 days of the invoice due date. The Company
may request advances in anticipation of customer collections at Congress' prime
rate (currently 8.75%) plus one percent, or LIBOR plus two percent, borrow on
an acceptance basis at rates which vary in accordance with the prevailing
market rate for such acceptances and open letters of credit through Congress.
The amount of such borrowings, including a portion of outstanding letters of
credit, are limited to certain percentages of outstanding accounts receivable
and finished goods inventory owned by the Company and are collateralized by all
of the assets of the Company. Under these agreements, the Company is required
to maintain certain levels of net worth and working capital. The Credit
Agreement can be terminated by either party on 60-days prior written notice.
Borrowings under the Credit Agreement, if any, are expected to be repaid over
not more than 12 months by cash flow from operations. The Credit Agreement has
been included as an exhibit to Schedule 13E-4 filed with the Commission. The
foregoing description of the Credit Agreement is qualified in its entirety by
reference to such document, which may be examined and a copy of which may be
obtained as set forth in Section 10 "Certain Information About the Company--
Additional Information."
9. BACKGROUND AND PURPOSE OF THE OFFER.
Purpose of the Offer. The objective of the Offer is to deliver to
shareholders a portion of the Company's current value and to provide the
Company's shareholders with a means of furthering their investment objectives
with respect to the Shares. The Offer provides shareholders who wish to
currently realize a portion of their investment in the Company in cash with an
opportunity to sell a portion of, or perhaps all, their Shares at a premium
over current market prices of the Shares. The Offer also is intended to
provide shareholders with an opportunity to increase their proportionate
ownership interest in the
11
<PAGE> 15
Company, either by not participating in the Offer or by participating in the
Offer and reinvesting their after-tax proceeds in additional Shares.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR TO REFRAIN FROM
TENDERING ANY OR ALL OF SUCH SHAREHOLDER'S SHARES AND HAS NOT AUTHORIZED ANY
PERSON TO MAKE ANY SUCH RECOMMENDATION. EACH SHAREHOLDER IS URGED TO EVALUATE
CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THE SHAREHOLDER'S OWN
INVESTMENT AND TAX ADVISORS AND MAKE SUCH SHAREHOLDER'S OWN DECISION WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
Any Shares acquired by the Company pursuant to the Offer will
initially be canceled and become authorized and unissued Shares and will be
available for issuance by the Company without further shareholder action
(except as required by applicable law or the rules of any securities exchanges
on which the Shares are then listed). Such Shares could be issued for general
or other corporate purposes, including stock splits or dividends, acquisitions,
the raising of additional capital for use in the Company's business and the
implementation of employee benefit plans.
10. CERTAIN INFORMATION ABOUT THE COMPANY.
General. The Company is an importer and wholesaler of women's
sportswear; its subsidiary, Body Drama, Inc., imports and wholesales women's
intimate apparel, including daywear and sleepwear. The Company is a California
corporation founded in 1971. The Company's principal executive offices are
located at 9220 Activity Road, San Diego, California 92126, and its telephone
number is (619) 549-2922.
Recent Developments. The Company has determined to pursue a strategy
of seeking niche product markets which offer the potential for higher profit
margins. In connection with this strategy, the Board has determined to sell or
discontinue product lines which have historically contributed to gross
revenues, but have not generated significant profits in recent years. The
Company also intends to reduce its overhead in connection with these
dispositions. However, no assurance can be given that the Company's efforts in
this regard will result in increased profit margins or profitability. The
Company periodically evaluates acquisitions of interests in, or combinations
with, other companies engaged in businesses that may or may not be related to
the Company's current business. It will continue to do so in the future, with
an emphasis for seeking product markets in the apparel industry which offer the
potential for above average profit margins. In connection with these
activities, the Company may consider issuing additional equity securities or
incurring indebtedness.
Historical Financial Information. The following table sets forth
certain historical consolidated financial information of the Company and its
subsidiaries. The historical financial information as of and for the years
ended August 31, 1994 and 1993 has been taken from the Company's audited
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the fiscal year ended August 31, 1994 (the "1994 10-K"). The
historical consolidated financial information as of and for the nine-month
periods ended May 31, 1995 and 1994 has been taken from the unaudited
consolidated financial statements included in the Company's Quarterly Report on
Form 10-Q for the quarter ended May 31, 1995 (the "1995 Third Quarter 10-Q").
More comprehensive financial information is included in the 1994 10-K and the
1995 Third Quarter 10-Q. The historical information as of and for the
nine-month periods ended May 31, 1995 and 1994 has been derived from the
Company's unaudited financial statements for such periods, which statements in
the opinion of the Company's management include all adjustments (which
adjustments consist of normal recurring entries) that are necessary for a fair
presentation of such information.
12
<PAGE> 16
The following historical financial information is qualified in its
entirety by, and should be read in conjunction with, the 1994 10-K and 1995
Third Quarter 10-Q, incorporated by reference herein.
Beeba's Creations, Inc. and Subsidiaries
Consolidated Balance Sheets(1)
<TABLE>
<CAPTION>
May 31, August 31,
1995 1994
------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . $6,177,004 $6,565,813
Receivables:
Trade accounts, less allowance for doubtful accounts
($430,000 at May 31, 1995 and $578,000 at
August 31, 1994) . . . . . . . . . . . . . . . . . . . . 11,695,734 15,329,232
Income taxes receivable . . . . . . . . . . . . . . . . . 1,596,480
Due from affiliates and employees . . . . . . . . . . . . 87,628 14,799
----------- -----------
11,783,362 16,940,511
Inventories . . . . . . . . . . . . . . . . . . . . . . . . 8,250,875 10,799,714
Deferred income taxes . . . . . . . . . . . . . . . . . . . 1,453,831 1,509,294
Other current assets . . . . . . . . . . . . . . . . . . . . 928,392 916,201
----------- -----------
Total current assets . . . . . . . . . . . . . . . . . . 28,593,464 36,731,533
Furniture, fixture and equipment . . . . . . . . . . . . . . . 896,769 880,793
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . 675,823 967,041
----------- -----------
$30,166,056 $38,579,367
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable . . . . . . . . . . . . . . . . . . . . . . . $3,000,000
Accounts payable and accrued expenses . . . . . . . . . . . $7,348,522 7,749,654
Income taxes payable . . . . . . . . . . . . . . . . . . . . 52,386
----------- -----------
Total current liabilities . . . . . . . . . . . . . . . . . 7,400,908 10,749,654
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . 1,095,858 1,095,858
Minority interest . . . . . . . . . . . . . . . . . . . . . . . 5,747,229
Shareholders' equity:
Preferred stock, no par value, 25,000,000 shares authorized
Common stock, no par value, 50,000,000 shares authorized;
issued and outstanding (2,398,224 at May 31, 1995 and
2,507,924 at August 31, 1994) . . . . . . . . . . . . . . . 12,590,085 12,351,527
Retained earnings . . . . . . . . . . . . . . . . . . . . . . 9,079,205 8,635,099
----------- -----------
Total shareholders' equity . . . . . . . . . . . . . . . . 21,669,290 20,986,626
----------- -----------
$30,166,056 $38,579,367
=========== ===========
</TABLE>
(Notes on page 16)
13
<PAGE> 17
Beeba's Creations, Inc. and Subsidiaries
Consolidated Statements of Operations1
<TABLE>
<CAPTION>
Nine months ended
May 31,
Year ended August 31, (Unaudited)
------------------------------ --------------------------
1994 1993 1995 1994
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . $119,291,419 $116,199,677 $63,676,183 $88,696,460
Cost of goods sold . . . . . . . . . . . . 97,499,053 84,992,982 48,219,489 73,128,528
------------ ------------ ----------- -----------
Gross profit . . . . . . . . . . . . . . . 21,792,366 31,206,695 15,456,694 15,567,932
Expenses:
Selling, general and administrative . . 27,498,849 28,914,490 14,391,469 21,065,415
Employee plans and bonuses . . . . . . . 353,854 789,915 646,241 248,848
------------ ------------ ----------- -----------
Income (loss) from operations . . . . . . . (6,060,337) 1,502,290 418,984 (5,746,331)
Interest income . . . . . . . . . . . . . . 206,350 378,875 156,820 114,738
Interest expense . . . . . . . . . . . . . (462,142) (155,762) (2,221) (361,869)
------------ ------------ ----------- -----------
Income (loss) before income taxes . . . . . (6,316,129) 1,725,403 573,583 (5,993,462)
Provision (benefit) for income taxes . . . (1,262,366) 719,561 184,577 (1,513,306)
------------ ------------ ----------- -----------
Net income (loss) before minority interest (5,053,763) 1,005,842 389,006 (4,480,156)
Minority interest . . . . . . . . . . . . . (1,627,736) (318,553) (55,100) (1,156,711)
------------ ------------ ----------- -----------
Net income (loss) . . . . . . . . . . . . . ($3,426,027) $1,324,395 $444,106 ($3,323,445)
============ ============ =========== ===========
Net income (loss) per common share . . . . ($1.33) $.49 $.18 ($1.28)
============ ============ =========== ===========
</TABLE>
(Notes on page 16)
14
<PAGE> 18
Beeba's Creations, Inc. and Subsidiaries
Pro Forma Consolidated Balance Sheets(2)(3)
(Unaudited)
<TABLE>
<CAPTION>
Year ended August 31, 1994 Nine Months ended May 31, 1995
----------------------------------------- -------------------------------------------
Pro Forma Pro Forma
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
----------- ------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . $6,565,813 ($6,565,813) $0 $6,177,004 ($6,177,004) $0
Receivables:
Trade accounts . . . . . . 15,329,232 15,329,232 11,695,734 11,695,734
Income taxes receivable . . 1,596,480 213,818 1,810,298 237,398 237,398
Due from affiliates and
employees . . . . . . . . 14,799 14,799 87,628 87,628
----------- ----------- ----------- -----------
16,940,511 17,154,329 11,783,362 12,020,760
Inventories . . . . . . . . . 10,799,714 10,799,714 8,250,875 8,250,875
Deferred income taxes . . . . 1,509,294 1,509,294 1,453,831 1,453,831
Other current assets . . . . . 916,201 916,201 928,392 928,392
----------- ----------- ----------- -----------
Total current assets . . . . 36,731,533 30,379,538 28,593,464 22,653,858
Furniture, fixtures and equipment 880,793 880,793 896,769 896,769
Other assets . . . . . . . . . . 967,041 967,041 675,823 675,823
----------- ----------- ----------- -----------
$38,579,367 $32,227,372 $30,166,056 $24,226,450
=========== =========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable . . . . . . . . $3,000,000 $3,738,062 $6,738,062 $4,196,224 $4,196,224
Accounts payable and accrued
expense . . . . . . . . . . 7,749,654 7,749,654 $7,348,522 7,348,522
Income taxes payable . . . 52,386 52,386
----------- ----------- ----------- -----------
Total current liabilities . 10,749,654 14,487,716 7,400,908 11,597,132
Deferred income taxes . . . . . 1,095,858 1,095,858 1,095,858 1,095,858
Minority interest . . . . . . . 5,747,229 5,747,229
Shareholders' equity:
Common stock . . . . . . . . . 12,351,527 (9,675,000) 2,676,527 12,590,085 (9,675,000) 2,915,085
Retained earnings . . . . . . 8,635,099 (415,057) 8,220,042 9,079,205 (460,830) 8,618,375
----------- ----------- ----------- -----------
Total shareholders' equity 20,986,626 10,896,569 21,669,290 11,533,460
----------- ----------- ----------- -----------
$38,579,367 $32,227,372 $30,166,056 $24,226,450
=========== =========== =========== ===========
Number of shares outstanding . . 2,507,924 (1,200,000) 1,307,924 2,398,224 (1,200,000) 1,198,224
=========== =========== =========== ===========
Book Value per share . . . . . . $8.37 $8.33 $9.04 $9.63
=========== =========== =========== ===========
</TABLE>
(Notes on page 16)
15
<PAGE> 19
Beeba's Creations, Inc. and Subsidiaries
Pro Forma Consolidated Statements of Operations(2)(3)
(Unaudited)
<TABLE>
<CAPTION>
Year Ended August 31, 1994 Nine Months ended May 31, 1995
------------------------------------------- ------------------------------------------
Pro Forma Pro Forma
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
------------ ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . $119,291,419 $119,291,419 $63,676,183 $63,676,183
Cost of goods sold . . . . . . . 97,499,053 97,499,053 48,219,489 48,219,489
------------ ------------ ----------- -----------
Gross profit . . . . . . . . . . 21,792,366 21,792,366 15,456,694 15,456,694
Expenses:
Selling, general and
administrative . . . . . . 27,498,849 27,498,849 14,391,469 14,391,469
Employee plans and bonuses . . 353,854 353,854 646,241 646,241
------------ ------------ ----------- -----------
Income (loss) from operations . . (6,060,337) (6,060,337) 418,984 418,984
Interest income . . . . . . . . . 206,350 206,350 156,820 (156,820)
Interest expense . . . . . . . . (462,142) (628,875) (1,091,017) (2,221) (541,408) (543,629)
------------ ------------ ----------- -----------
Income (loss) before income taxes (6,316,129) (6,945,004) 573,583 (124,645)
Provision (benefit) for income
taxes . . . . . . . . . . . . . (1,262,366) (213,818) (1,476,184) 184,577 (237,398) (52,821)
------------ ------------ ----------- -----------
Net income before minority
interest . . . . . . . . . . . (5,053,763) (5,468,820) 389,006 (71,824)
Minority interest . . . . . . . . (1,627,736) (1,627,736) (55,100) (55,100)
------------ ------------ ----------- -----------
Net income (loss) . . . . . . . . ($3,426,027) ($3,841,084) $444,106 ($16,724)
============ ============ =========== ===========
Weighted average number of
shares outstanding . . . . . . 2,573,132 (1,200,000) 1,373,132 2,452,573 (1,200,000) 1,252,573
============ ============ =========== ===========
Earnings (loss) per share . . . . ($1.33) ($2.80) $.18 ($.01)
============ ============ =========== ===========
</TABLE>
_________________
Notes to Financial Statements:
1. The Notes to financial statements appearing in the 1994 10-K and the
1995 Third Quarter 10-Q are incorporated by reference herein.
2. The unaudited pro forma consolidated financial information assumes the
Offer had occurred as of September 1, 1993 for the August 31, 1994
fiscal year end, and September 1, 1994 for the nine-month period ended
May 31, 1995. The pro forma financial information is not necessarily
indicative of the Company's consolidated financial position or results
of operations as they may be in the future. The pro forma financial
information and accompanying notes are qualified in their entirety by,
and should be read in conjunction with, the Company's consolidated
financial statements incorporated by reference herein.
3. The pro forma data assumes the Company has purchased 1,200,000 Shares
at September 1, 1993 for the August 31, 1994 fiscal year end, and
September 1, 1994 for the nine-month period ended May 31, 1995,
pursuant to the Offer at the purchase price per Share of $8.00 and
paid for the expenses of the Offer estimated to aggregate $75,000.
Pre-tax rates of interest of 6.5% and 10% were used to calculate the
pro forma increase in interest expense for the year ended August 31,
1994, and the nine-month period ended May 31, 1995, respectively,
attributable to the cash and cash equivalents assumed to have been
used for the purchase of 1,200,000 Shares pursuant to the Offer and
pay for related expenses. Such rate is based on the Company's assumed
historical average rates of interest paid, calculated on a daily
basis.
The pro forma decrease in interest income assumes the Company did not
have the use of the gross proceeds of the Offer and associated
expenses for the period indicated.
The pro forma weighted average Shares outstanding are based upon the
historical weighted average Shares outstanding during each period
presented less the 1,200,000 Shares assumed to have been acquired
pursuant to the Offer.
16
<PAGE> 20
Additional Information. Additional information concerning the Company
is set forth in the Company's most recent proxy statement which has previously
been provided to shareholders, in the 1994 10-K and 1995 Third Quarter 10-Q.
Additional copies of such documents are available upon request from the
Company. The Company has also filed an Issuer Tender Offer Statement on
Schedule 13E-4 (the "Schedule 13E-4") with the Commission which includes
certain additional information relating to the Offer. The Company is subject
to the informational reporting requirements of the Exchange Act and in
accordance therewith files periodic reports, proxy statements and other
information with the Commission relating to its business, financial condition
and other matters. The Company is required to disclose in such reports and
proxy statements certain information, as of particular dates, concerning the
Company's directors and officers, their remuneration, stock options granted to
them, the principal owners of the Company's securities and any material
interest of such persons in transactions with the Company.
Such material may be inspected and copied upon payment of the
prescribed rates at the public reference facilities of the Commission, at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at its regional
offices at 7 World Trade Center, New York, New York 10048 and Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies may also be obtained by mail upon payment of the prescribed rates from
the Commission's Public Reference Room, 450 Fifth Street, N.W., Washington,
D.C. 20549. The Schedule 13E-4 will not be available at the Commission's
regional offices.
11. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and could reduce the
number of shareholders. Nonetheless, the Company anticipates that there will
still be a sufficient number of Shares outstanding and publicly traded
following consummation of the Offer to ensure a continued trading market in the
Shares. Based on the published guidelines of the NASD, the Company does not
believe that its purchase of Shares pursuant to the Offer will cause the
remaining Shares to be delisted from the NASD.
The Shares are currently "margin securities" under the rules of the
Federal Reserve Board. This has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. The Company believes
that, following the purchase of Shares pursuant to the Offer, the remaining
Shares will continue to be margin securities for purposes of the Federal
Reserve Board's margin regulations.
The Shares are registered under the Exchange Act which requires, among
other things, that the Company furnish certain information to its shareholders
and to the Commission and comply with the Commission's proxy rules in
connection with meetings of the Company's shareholders. The Company believes
that its purchase of Shares pursuant to the Offer will not result in the Shares
becoming eligible for deregistration under the Exchange Act.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVAL.
The Company is not aware of any license or regulatory permit that
appears to be material to its business that might be adversely affected by its
acquisition of Shares pursuant to the Offer or of any approval or other action
by any government or governmental, administrative or regulatory authority or
agency, domestic or foreign, that would be required for the Company's
acquisition of Shares pursuant to the Offer. Should any such approval or other
action be required, the Company currently contemplates that it will seek such
approval or other action. The Company cannot predict whether it may determine
that it is required to delay the acceptance for payment of or payment for
Shares tendered pursuant to the Offer pending the outcome of any such matter.
There can be no assurance that any such approval or other action, if needed,
would be obtained or would be obtained without substantial condition or that
the failure to obtain any such approval or other
17
<PAGE> 21
action might not result in adverse consequences to the Company's business. The
Company's obligation under the Offer to accept for payment and pay for Shares
is subject to certain conditions. See Section 5.
13. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following summary is a general discussion of certain anticipated
Federal income tax consequences of a sale of Shares pursuant to the Offer.
This summary does not discuss all aspects of Federal income taxation that may
be relevant to a particular shareholder in light of personal circumstances or
to certain types of shareholders subject to special treatment under the Federal
income tax laws (for example, financial institutions, tax-exempt organizations,
foreign investors, dealers in securities and shareholders who received their
Shares pursuant to compensation arrangements with the Company) and does not
discuss any aspect of state, local or foreign tax laws. Each shareholder is
urged to consult his or her own tax advisor as to the particular tax
consequences of a sale of Shares pursuant to the Offer.
The sale of Shares pursuant to the Offer will be a taxable transaction
for Federal income tax purposes and may also be taxable under applicable state,
local, foreign or other tax laws. The Federal income tax consequences to a
shareholder will be determined under Sections 301 and 302 of the Internal
Revenue Code of 1986, as amended (the "Code") and may vary depending upon a
shareholder's particular facts and circumstances. Under Section 302 of the
Code, a sale of Shares pursuant to the Offer to Purchase will generally be
treated as a sale or exchange if such sale (i) is "substantially
disproportionate" with respect to the shareholder, (ii) results in a "complete
redemption" of the shareholder's interest in the Company, or (iii) is "not
essentially equivalent to a dividend" with respect to the shareholder.
If any one of the three tests is satisfied, the shareholder tendering
Shares pursuant to the Offer will recognize gain or loss equal to the
difference between the amount of cash received by the shareholder pursuant to
the Offer and the shareholder's tax basis in the Shares sold. The gain or loss
recognized generally will be capital gain or loss if the Shares are held by the
shareholder as a capital asset and such gain or loss will be long term capital
gain or loss if the Shares have been held for a period of more than one year.
In determining whether any of the three tests is satisfied, a
shareholder must take into account not only Shares actually owned but also
Shares that are "constructively owned" under Section 318 of the Code.
Generally, a shareholder will be considered to constructively own Shares which
the shareholder has an option to acquire and Shares owned (and in some cases
constructively owned) by certain related individuals or entities.
The sale of Shares pursuant to the Offer will be "substantially
disproportionate" with respect to a shareholder if the percentage of the
outstanding voting stock of the Company actually and constructively owned by
the shareholder immediately after the Offer is less than 80% of the percentage
of the outstanding voting stock of the Company actually and constructively
owned by such shareholder immediately before the sale of the Shares pursuant to
the Offer. Assuming that the maximum number of Shares (1,200,000) is purchased
pursuant to the Offer, a shareholder would have to sell approximately 58.6% or
more of the Shares actually and constructively owned by the shareholder in
order to meet the "substantially disproportionate" test. Shareholders should
consult their own tax advisor to determine whether the "substantially
disproportionate" test applies to their particular facts and circumstances.
The sale of the Shares pursuant to the Offer will be treated as a
"complete redemption" of the shareholder's interest in the Company if either
(i) all shares actually and constructively owned by the shareholder are sold
pursuant to the Offer, or (ii) all of the Shares actually owned by the
shareholder are sold pursuant to the Offer and the shareholder is eligible to
waive and does effectively waive attribution of all Shares constructively owned
by the shareholder in accordance with Section 302(c) of the Code.
18
<PAGE> 22
If the sale of Shares by a shareholder fails to satisfy the
"substantially disproportionate" test or the "complete redemption" test, the
shareholder may nevertheless receive sale or exchange treatment in the event
the sale pursuant to the Offer is "not essentially equivalent to a dividend." A
shareholder will generally meet this test in the event the sale of Shares
pursuant to the Offer by the shareholder results in a "meaningful reduction" in
the shareholder's proportional interest in the Company. The determination as
to whether a sale of Shares by a shareholder pursuant to the Offer will be "not
essentially equivalent to a dividend" will depend on the individual
shareholder's facts and circumstances. The Internal Revenue Service has held
in a published ruling that a 3.3% reduction in the proportionate interest of a
less than 1% shareholder in a publicly held corporation who exercised no
control over corporate affairs constituted a "meaningful reduction."
Shareholders should consult their own tax advisors as to whether the "not
essentially equivalent to a dividend test" applies to their individual
circumstances.
Shareholders should be aware that their ability to satisfy any of the
tests indicated above could be affected by any proration pursuant to the Offer.
In addition, it may be possible for a shareholder to satisfy one or
more of the above tests by contemporaneously selling or otherwise disposing of
some or all of Shares that are actually or constructively owned by a
shareholder but which are not purchased pursuant to the Offer. Shareholders
should also be aware that the acquisition of additional Shares or an option to
acquire additional Shares, or the acquisition by certain related parties, could
adversely effect whether such shareholder qualifies for any of the tests set
forth above.
In the event that none of the three tests is satisfied by the selling
shareholder and the Company has "sufficient" earnings and profits, the selling
shareholder will be treated as having received a dividend that must be included
in such selling shareholder's gross income in an amount equal to the entire
cash received by the shareholder pursuant to the Offer. In such event, the
selling shareholder will not be entitled to offset the amount received by the
shareholder's basis in the redeemed Shares and the basis in the redeemed Shares
will be added to the basis in the selling shareholder's remaining Shares. In
the event there are "insufficient" earnings and profits, the shareholder will
have a non-taxable return of capital to the extent of the shareholders tax
basis and thereafter, capital gain to the extent the distribution exceeds the
earnings and profits.
In the case of a corporate shareholder, any amount received which is
treated as a dividend may be eligible for the 70% "dividends received"
deduction allowable to domestic corporate shareholders under Section 243 of the
Code subject to certain limitations which would include those relating to "debt
finance portfolio stock" under Section 246A of the Code and to the holding
period requirements set forth in Section 246 of the Code. Any amount treated
as a dividend by a corporate shareholder may constitute an "extraordinary
dividend" subject to Section 1059 of the Code. In such event a corporate
shareholder would be required to reduce the tax basis of its remaining Shares
(but not below zero) by the portion of any "extraordinary dividend," which is
deducted under the dividends received deduction. In the event such portion
exceeds the shareholder's tax basis in the remaining Shares, the shareholder
must treat any such excess as additional gain or loss upon the subsequent sale
or other disposition of the Shares. A dividend will be considered
extraordinary in the event (i) the dividends attributable to Shares held for
two years or less exceeds 10% of the greater of (a) the shareholder's adjusted
basis in the Shares or (b) the fair market value of the Shares, or (ii) except
as otherwise set forth in Treasury Regulations which have not yet been
promulgated, any amount treated as a dividend under Section 301 which is not
part of a pro rata redemption. It is not anticipated that the sales pursuant
to the Offer will be pro rata. Thus, it is anticipated that the extraordinary
dividend rules will apply to any amount received pursuant to the Offer which is
taxable as a dividend to a corporate shareholder. Corporate shareholders
should be aware of special aggregation rules that may apply under Section 1059.
Corporate shareholders are urged to consult their own tax advisors as to the
effect of Section 1059 of the Code on their Shares.
19
<PAGE> 23
A foreign shareholder may be subject to dividend tax withholding at
either the 30% rate or a lower applicable treaty rate on the gross proceeds of
the sale of Shares pursuant to the Offer. Foreign shareholders should consult
their tax advisors regarding application of these withholding rules.
THE FOREGOING TAX DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY.
THE TAX CONSEQUENCES OF A SALE OF SHARES PURSUANT TO THE OFFER MAY VARY
DEPENDING UPON, AMONG OTHER THINGS, THE PARTICULAR CIRCUMSTANCES OF THE
TENDERING SHAREHOLDER. NO INFORMATION IS PROVIDED HEREIN AS TO THE STATE,
LOCAL, FOREIGN OR OTHER TAX CONSEQUENCES OF THE TRANSACTION CONTEMPLATED BY THE
OFFER TO PURCHASE. EACH SHAREHOLDER IS URGED TO CONSULT WITH SUCH
SHAREHOLDER'S OWN TAX ADVISORS TO DETERMINE THE PARTICULAR FEDERAL, STATE,
LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SALES MADE PURSUANT TO THE OFFER
AND THE EFFECT OF THE CONSTRUCTIVE STOCK OWNERSHIP RULES MENTIONED ABOVE.
14. CERTAIN LIMITATIONS ON PURCHASES OF SHARES BY THE COMPANY.
Although the Company is authorized by California law to purchase or
redeem its own shares of capital stock, the Company may not do so if (i) the
amount of retained earnings immediately prior thereto does not equal or exceed
the amount of the aggregate purchase price, or (ii) immediately after giving
effect to the purchase, the sum of the Company's adjusted assets would be at
least equal to 1 1/4 times the sum of its adjusted liabilities, and its current
assets would be at least equal to 1 1/4 times its current liabilities.
Based on the Company's consolidated balance sheet as of May 31, 1995,
which balance sheet was prepared in accordance with generally accepted
accounting principles, the recorded amount of the Company's adjusted assets as
of such date exceeded the amount of the Company's adjusted liabilities and its
current assets exceeded its current liabilities, each by more than the required
amounts. The Board of Directors has determined, based upon the Board's
familiarity with the Company's operations, financial condition and prospects
and the Board's discussions with the Company's management and its advisors,
that after giving effect to the purchase pursuant to the Offer, of Shares
having an aggregate purchase price of $9.6 million, such ratios will continue
to be complied with.
If a court, in a lawsuit brought by an unpaid creditor of the Company
or a representative of such creditors (such as a trustee in bankruptcy or the
Company as a debtor-in-possession), were to find that the Company (i) was
insolvent at the time the Company purchased Shares pursuant to the Offer, (ii)
was rendered insolvent by reason of such purchase, (iii) was engaged, or was
about to engage, in a business or a transaction for which the assets remaining
with the Company constituted an unreasonably small capital, (iv) intended to
incur, or believed, or reasonably should have believed, that the Company would
incur, debts and other liabilities beyond its ability to pay as such debts and
liabilities matured, or (v) entered into such transaction with the actual
intent to hinder, delay or defraud creditors, then such court could, among
other remedies, avoid the purchase of Shares from shareholders and require that
such shareholders return the amount of cash received, or a portion thereof, in
such purchase to the Company, to a complaining creditor, or to a fund for the
benefit of its creditors. The measure of insolvency for purposes of the
foregoing will vary depending upon the law being applied. Generally, however,
the Company would be considered insolvent if the fair value of the Company's
assets were less than the amount of the Company's total debts and liabilities
or if the present fair saleable value of the Company's property were less than
the amount that would be required to pay the Company's probable liability on
its existing debts as they become absolute or mature. There can be no
assurance that a court would value the Company's assets on the same basis as
the Board of Directors in determining whether the Company was insolvent at the
time of the purchase of Shares by the Company or that, regardless of the method
of valuation, a court would not determine that the Company was insolvent at
such time.
20
<PAGE> 24
The Board of Directors and the Company's management believe, based on
management's internal projections and other financial information (including
the Company's historical and pro forma financial statements), that at the time
of the purchase of Shares pursuant to the Offer, the Company will be solvent,
will have sufficient capital for carrying on its business and will be able to
pay its debts as they mature.
15. EXTENSION OF THE TENDER PERIOD; TERMINATION; AMENDMENTS.
The Company expressly reserves the right, at any time and from time to
time, to extend the period of time during which the Offer is open by giving
oral or written notice of such extension to the Depositary and making a public
announcement thereof. There can be no assurance that the Company will exercise
its right to extend the Offer. The Company also expressly reserves the right,
in its sole discretion, to terminate the Offer and not accept for payment or
pay for any Shares not theretofore accepted for payment or paid for or, subject
to applicable law, to postpone payment for Shares upon the occurrence of any of
the conditions specified in Section 5 by giving oral or written notice of such
termination or postponement to the Depositary and making a public announcement
thereof. The Company's reservation of the right to delay payment for Shares
which it has accepted for payment is limited by Exchange Act Rule 13e-4(f)(5),
which requires that the Company pay the consideration offered or return the
Shares tendered promptly after termination or withdrawal of the Offer. Subject
to compliance with applicable law, the Company further reserves the right, in
its sole discretion, to amend the Offer in any respect or to waive the
limitation on the maximum number of Shares to be purchased pursuant to the
Offer. Amendments to and extensions of the Offer may be made at any time and
from time to time by public announcement thereof, such announcement, in the
case of an extension, to be issued no later than 12:00 noon, New York City
time, on the next business day after the previously scheduled Expiration Date.
Any public announcement made pursuant to the Offer will be disseminated
promptly to shareholders in a manner reasonably designed to inform
shareholders. Without limiting the manner in which the Company may choose to
make a public announcement, the Company shall have no obligation to publish,
advertise or otherwise communicate any such public announcement, except as
required by applicable law, other than by issuing a release to the Dow Jones
News Service.
If the Company materially changes the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will disclose promptly such material change and extend the
Offer to the extent required by Exchange Act Rule 13e-4(f)(1)(ii). This Rule
requires that (other than with respect to a change in price or a change in
percentage of securities sought) the maximum period during which an offer must
remain open following material changes in the terms of an offer or the
information concerning an offer (other than with respect to a change in price
or a change in percentage of securities sought) will depend on the facts and
circumstances, including the relative materiality of such terms or information.
If (i) the Company increases or decreases the price to be paid for Shares, or
the Company increases the number of Shares being sought and any such increase
in the number of Shares being sought exceeds 2% of the outstanding Shares, or
the Company decreases the number of Shares being sought; and (ii) the Offer is
scheduled to expire at any time earlier than the expiration of a period ending
on the tenth business day from, and including, the date that notice of such
increase or decrease is first published, sent or given, the Offer will be
extended until at least the end of such tenth business day.
16. FEES AND EXPENSES.
The Company has retained D.F. King & Co., Inc. as the Information
Agent and American Stock Transfer & Stock Company as Depositary. The
Information Agent will assist shareholders who request assistance in connection
with the Offer, may contact shareholders by mail, telephone, facsimile and in
person and may request brokers, dealers and other nominee shareholders to
forward materials relating to the Offer to beneficial owners. The Depositary
and the Information Agent will receive reasonable and customary compensation
for their services. The Company will also reimburse the Depositary and the
Information Agent for out-of-pocket expenses, including reasonable attorneys'
fees.
21
<PAGE> 25
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person (other than fees to the
Information Agent and the Depositary as described above) for soliciting tenders
of Shares pursuant to the Offer. The Company will, however, on request through
the Information Agent, reimburse such persons for customary handling and
mailing expenses incurred in forwarding materials with respect to the Offer to
the beneficial owners for which they act as nominees or fiduciaries. No such
broker, dealer, commercial bank, trust company or other person has been
authorized to act as the Company's agent for purposes of this Offer. The
Company will pay (or cause to be paid) any stock transfer taxes payable because
of its purchase of Shares pursuant to the Offer, except as otherwise provided
in Instruction 6 of the Letter of Transmittal.
17. MISCELLANEOUS.
The Company is not aware of any jurisdiction where the making of Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with such
law, the Offer will not be made to (nor will tenders be accepted from or on
behalf of the holders of Shares residing in such jurisdiction. In any
jurisdiction the securities or blue sky laws of which require the Offer to be
made by a licensed broker or dealer, the Offer is being made on the Company's
behalf by one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of the Company not contained herein or in the Letter
of Transmittal and, if given or made, such information or representation must
not be relied upon as having been authorized.
BEEBA'S CREATIONS, INC.
July 20, 1995
22
<PAGE> 26
SCHEDULE I
OWNERSHIP OF SHARES
The following table and notes set forth as of July 14, 1995 (i) the
beneficial ownership, as defined by regulations of the Commission, of Shares
held by (a) each person or group of persons known by the Company who
beneficially owns more than 5% of the outstanding Shares, (b) each director or
nominee for director of the Company and (c) by all persons who serve as
executive officers and directors of the Company as a group. All information is
taken from or based upon ownership filings made by such persons with the
Commission, copies of which were sent by such persons to the Company, or upon
information provided by such persons to the Company.
<TABLE>
<CAPTION>
Name of Beneficial Owner Shares Percent of Class
- ------------------------ ------ ----------------
<S> <C> <C>
Arjun C. Waney 477,148 19.90%
9220 Activity Road
San Diego, CA 92126
Luther A. Henderson(1) 216,047 9.01%
5608 Malvey Ave., Suite 104A
Ft. Worth, TX 76107
Grace & White, Inc.(2) 342,949 14.30%
515 Madison Avenue, Suite 1700
New York, NY 10022
Steven P. Wyandt 104,978 4.27%
9220 Activity Road
San Diego, CA 92126
Eugene B. Price II 43,296 1.81%
9220 Activity Road
San Diego, CA 92126
All directors and executive officers as a group 893,187 35.90%
(6 persons)(3)
</TABLE>
____________
1. The shares attributed to Mr. Henderson are held in the name of Pirvest,
Inc., a corporation in which Mr. Henderson owns 100% of the outstanding
common stock, except for 460 shares held directly by Mr. Henderson.
2. The Company has been advised by a filing made with the Securities and
Exchange Commission by Grace & White, Inc. that as of February 10, 1995,
it owned 342,949 shares of Compoany common stock as to which it had sole
dispositive power, but had sole voting power on only 17,500 of such
shares.
3. This number includes 90,000 shares as to which certain officers have the
right to acquire beneficial ownership by exercising options which were
granted pursuant to the Plans.
23
<PAGE> 27
Facsimile copies of the Letter of Transmittal will be accepted from
Eligible Institutions. A Letter of Transmittal and certificates for Shares and
any other required documents should be sent or delivered by each shareholder or
the shareholder's broker, dealer, commercial bank, trust company or other
nominee to the Depositary at its address set forth below.
The Depositary of the Offer is:
AMERICAN STOCK TRANSFER & STOCK COMPANY
<TABLE>
<S> <C> <C>
Facsimile Transmission By Hand or Overnight Delivery:
By Mail: (For Eligible Institutions Only):
American Stock Transfer &
American Stock Transfer & Trust (718) 234-5001 Trust Company
Company 40 Wall Street
40 Wall Street Confirm Facsimile by Telephone: New York, NY 10005
New York, NY 10005
(718) 921-8820
</TABLE>
Any questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone numbers and
addresses listed below. You may also contact your broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Offer. To
confirm delivery of your Shares, you are directed to contact the Depositary.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
(212) 269-5550 (collect)
or
Call toll free (800) 669-5550
24
