<PAGE i>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement [ ] Confidential, for Use of the
[ ] Definitive proxy statement Commission Only (as permitted by
[ ] Definitive additional materials Rule 14a-6(e)(2)
[ ] Soliciting material pursuant to
Rule 14a-11(c) or Rule 14a-12
CREATIVE LEARNING PRODUCTS, INC.
- ----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
CREATIVE LEARNING PRODUCTS, INC.
- ----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (1) /
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
- ---------------------
1 Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE ii>
CREATIVE LEARNING PRODUCTS, INC.
150 Morris Avenue
Springfield, New Jersey 07081
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
CREATIVE LEARNING PRODUCTS, INC.
The Annual Meeting of Shareholders of Creative Learning Products, Inc.,
(the "Company") will be held at the offices of Gold & Wachtel, LLP, 110 East
59th Street, New York, New York, 10022, 27th Floor, on Friday, April 18, 1997,
at 10:00 a.m., Eastern Standard Time (the "Annual Meeting"), for the following
purposes:
1. To elect seven directors to serve for a one-year term until the
next Annual Meeting of Shareholders and until their successors are
duly elected and qualify.
2. To ratify the appointment of BDO Seidman, LLP as independent public
accountants of the Company and its subsidiaries for the fiscal year
ending May 31, 1998.
3. To approve a change of the name of the Company from Creative
Learning Products, Inc. to Creative Gaming, Inc.
4. To approve an increase in the number of authorized shares of the
Common Stock, no par value, of the Company from 25,000,000 shares
to 100,000,000 shares.
5. To transact such other business as may come before the Annual
Meeting or any adjournment thereof.
Only Shareholders of record at the close of business on March 17, 1997 are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof.
By Order of the Board of Directors
/s/Carol A. Kulina - Jegou
---------------------------
Carol A. Kulina - Jegou
Secretary
March 20, 1997
<PAGE iii>
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. THE PROXY MAY
BE REVOKED IN WRITING PRIOR TO THE ANNUAL MEETING OR, IF YOU ATTEND THE ANNUAL
MEETING, YOU MAY REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE 1>
CREATIVE LEARNING PRODUCTS, INC.
150 Morris Avenue
Springfield, New Jersey 07081
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 18, 1997
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Creative Learning Products, Inc. (the "Company") of
proxies to be voted at the Annual Meeting of Shareholders (the "Annual
Meeting") to be held on Friday, April 18, 1997 or at any adjournment thereof.
The purposes for which the Annual Meeting is to be held are set forth in the
preceding Notice of Annual Meeting. This Proxy Statement and the enclosed form
of proxy are first being mailed on or about March 20, 1997 to holders of record
of the Company's Common Stock, no par value (the "Common Stock"), as of the
close of business on March 17, 1997 (the "Record Date"), which has been fixed
as the record date for the determination of the Shareholders entitled to notice
of, and to vote at, the Annual Meeting.
VOTING SECURITIES
On the Record Date, _____________ shares of the Common Stock, which is
the only class entitled to vote at the Annual Meeting, were issued and
outstanding. Each shareholder of record is entitled to cast, in person or by
proxy, one vote for each share of the Common Stock held by such shareholder as
of the close of business on the Record Date. A plurality of the votes cast at
the Annual Meeting shall be necessary to elect a director. The affirmative
vote of the holders of a majority of the shares represented and entitled to
vote at the Annual Meeting shall be necessary to approve the selection of the
independent auditors. The affirmative vote of a majority of the outstanding
shares of the Common Stock shall be necessary to approve the Company's name
change and to increase the number of authorized shares of the Common Stock.
Proxies will be voted as indicated in this Proxy Statement and the
enclosed proxy. Shares represented by properly executed proxies, if received
in time, will be voted in accordance with any specifications made therein. A
proxy may be revoked by delivering a written notice of revocation to the
Company (Attention: Carol A. Kulina-Jegou, Secretary) at its principal
executive office or in person at the Annual Meeting, or by a subsequently dated
proxy, at any time prior to the voting thereof. The principal executive office
of the Company is located at the above address.
The majority of all the outstanding Common Stock constitutes a quorum at
the Meeting. Abstentions and broker non-votes are treated for purpose of
determining a quorum at the Meeting and not treated as a vote for or against a
proposal.
<PAGE 2>
A shareholder shall have no right to receive payment for his, her or its
shares as a result of shareholder approval of any proposal in the Notice of
Annual Meeting.
PROPOSAL ONE: ELECTION OF DIRECTORS
Nominees for Election of Directors
Five directors will be elected at the Annual Meeting to serve for a one-
year term until the next Annual Meeting of Shareholders and until their
successors are duly elected and qualify.
Proxies received in response to this solicitation, unless specified
otherwise, will be voted in favor of the seven nominees named below. Peter J.
Jegou and Carol A. Kulina-Jegou are the only members of the current Board of
Directors, having been elected at the last Annual Meeting of Shareholders held
on January 12, 1994. If a nominee should not be available for election as
contemplated, the management proxy holders will vote for such lesser number of
directors as are available to serve or will vote for a substitute designated by
the current Board of Directors. In no event will proxies be voted for more
than seven nominees.
The following table sets forth certain information, as of the Record
Date, concerning the nominees for election of directors of the Company, two of
whom are currently serving as directors of the Company. The information has
been furnished to the Company by the individual named. For information as to
the shares of the Common Stock held by each nominee, see the section "Security
Ownership of Certain Beneficial Holders and Management" elsewhere in this Proxy
Statement.
Year First
Elected
Name of Nominee Age Director Positions and Offices with the Company
- --------------- --- -------- --------------------------------------
Peter J. Jegou 49 1988 Chairman, Chief Executive Officer,
President and Director
Carol A. Kulina-Jegou 47 1988 Secretary and Director
Robert W. Berend 65 N/A None
Harvey I. Freeman 58 N/A None
Lee S. Rosen 43 N/A None
____________ __ N/A None
____________ __ N/A None
<PAGE 3>
Family Relationships of Nominees
Peter J. Jegou and Carol A. Kulina-Jegou are husband and wife. There are
no other family relationships among the directors and executive officers of the
Company.
Business History of Nominees
Each of Peter J. Jegou and Carol A. Kulina-Jegou has had as his or
principal occupation for more than the past five years an executive position
with the Company and/or its then subsidiaries. (The Company and its operating
subsidiaries are collectively referred to herein as "CLP".) Effective December
31, 1995, Ms. Kulina-Jegou ceased to serve CLP as an executive officer and an
employee.
Robert W. Berend has for more than the past five years been a partner of
Gold & Wachtel, LLP, general counsel to the Company. From July 1976 to January
1986, he served as Senior Vice President, Secretary, General Counsel and (until
1984) a director of Management Assistance Inc. ("MAI"), a then computer
manufacturer and supplier of software and service listed on the New York Stock
Exchange. From January 1986 to December 31, 1996, he served as a Trustee of
the Management Assistance Inc. Liquidating Trust, a publicly traded trust
liquidating MAI pursuant to the Internal Revenue Code.
Harvey Freeman, a real estate and gaming consultant for more than the
past five years, is currently assisting CGI in the exploration and development
of gaming opportunities across the United States. He has been involved in the
development, management, financing, and operation of major business enterprises
for over 30 years. Mr. Freeman served as Executive Vice President of the Trump
Organization for 11 years ending in 1991 and was instrumental in the
development, financing , and management of its casino hotel operation from
inception. Mr. Freeman served as a member of the three person Executive
Committee (Board of Directors equivalent for private holdings) and as Chairman
of the Audit Committee for Trump Plaza Hotel Casino, Trump's Castle Hotel
Casino and Trump Taj Mahal Hotel Casino in Atlantic City, New Jersey. Mr.
Freeman also served on the Board of Directors or other supervising committees
of Trump Organization investments including, non-casino hotels, residential and
office developments, airline interests planned unit developments and retail
operations. In addition, Mr. Freeman is a licensed attorney in the state of
New York and currently serves on the Board of Directors of Amrep Corp. (NYSE).
During the past five years, Lee S. Rosen has been employed by registered
broker-dealer firms as follows: He is currently employed by First Colonial
Securities Group, Inc. which firm he joined in October 1996. From July
1995 until October 1996, he was employed by Donald & Co. Securities Inc.
From April 1994 until June 1995, he was employed by Kidder Peabody & Co.,
Incorporated ("Kidder") or, after Kidder was acquired by PaineWebber
Incorporated ("PaineWebber") in January 1995, by PaineWebber. Prior to working
for Kidder, from April 1993 until April 1994, Mr. Rosen was employed by
Shearson, Lehman, Hutton & Co.,
<PAGE 4>
Inc. ("Shearson") or, after Shearson was acquired by Smith Barney, Inc.
("Smith Barney") in September 1993, by Smith Barney. From September 1991
until April 1993, he was employed by Raymond James & Associates, Inc
Committees and Board Annual Meetings
Because there are currently only two directors, the Board has not
established any standing audit, nominating or compensation committees. During
the fiscal year ended May 31, 1996 ("fiscal 1996"), the Board of Directors held
no meetings and acted by written consent on 30 occasions.
MANAGEMENT
Directors and Executive Officers
The following table contains information concerning the current directors
and executive officers of the Company as of January 31, 1997:
Year First
Became
Director or
Position(s) Executive
Name Age with Company Officer
- ---- --- ------------ ----------
Peter J. Jegou 49 Chairman of the Board 1988
of Directors, President,
Chief Executive
Officer and Director
Carol A. Kulina-Jegou 47 Secretary and Director 1988
Walter J. Krzanowski 54 Treasurer, Chief Financial 1995
and Chief Accounting
Officer
Mr. Jegou and Ms. Kulina-Jegou were elected as directors by the
shareholders at the Annual Meeting held on January 12, 1994. Each director
serves until the next Annual Meeting of Shareholders and until his or her
respective successor is duly elected and qualifies. Executive officers are
elected by the Board to serve at the discretion of the directors.
<PAGE 5>
Business History
Each of Peter J. Jegou and Carol A. Kulina-Jegou has had as his or her
principal occupation for more than the past five years an executive position
with the Company and/or its then subsidiaries. Effective December 31, 1995,
Ms. Kulina-Jegou ceased to serve CLP as an executive officer and an employee.
Walter J. Krzanowski has been Chief Financial Officer and Chief
Accounting Officer of the Company since July 7, 1995 and Treasurer of the
Company since November 4, 1996. From January to June 1995, Mr. Krzanowski
served as an independent consultant providing financial services to the
Company. From September 1993 to December 1994, Mr. Krzanowski was self-
employed, acting as a consultant to a number of companies, providing
accounting, financial reporting and data processing services. From April 1986
to August 1993, Mr. Krzanowski held various financial and management
information services positions, including Director of Finance for Zenith
Laboratories, Inc., a generic pharmaceutical company. Prior to joining Zenith
Laboratories, Mr. Krzanowski held various financial positions with
Hoffmann-LaRoche, Inc., a major pharmaceutical company, from 1966 to 1986.
Family Relationships
Peter J. Jegou and Carol A. Kulina-Jegou are husband and wife. There are
no other family relationships among the directors and executive officers of the
Company.
Executive Compensation
The Company has not adopted any plan providing for stock appreciation
rights, restricted stock, stock options, phantom stock or similar type of stock
benefits and has no other long-term incentive plan in effect. The Company has,
from time to time, issued to employees of CLP shares of the Common Stock as
additional compensation for their services, including 10,000 shares to the
Chief Executive Officer of the Company in the fiscal year ended May 31, 1996
("fiscal 1996"). See, however, the section "Stock Options and Warrants to
Directors and Certain Officers" under this caption "Management." There was no
other executive officer whose compensation exceeded $100,000 in fiscal 1996.
As indicated in the ensuing tables, only the Chief Executive Officer of the
Company had been granted stock options through the end of the fiscal year ended
May 31, 1995 ("fiscal 1995). On July 7, 1995, Walter J. Krzanowski, the Chief
Financial and Chief Accounting Officer of the Company, was granted an option
expiring July 6, 2000 to purchase 15,000 shares of the Common Stock at $1.50
per share. See also the section "Stock Options and Warrants to Directors and
Certain Officers" under this caption "Management."
Summary Compensation Table
The following table sets forth summary compensation information paid or
awarded for fiscal 1996, fiscal 1995 and the fiscal year ended May 31, 1994
("fiscal 1994") by the Company to
<PAGE 6>
its Chief Executive Officer and each of CLP's most highly compensated
executive officers who served at the end of fiscal 1996 whose total
annual salary bonus exceeded $100,000 (there being none):
<TABLE>
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Payouts
-------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Name and Other
Principal Annual Restricted Stock LTIP
Position Year Salary Bonus Compensation(1) Stock Award Options(#) Payouts All Other
- --------- ---- ------ ----- --------------- ----------- ---------- ($) Compensation
------- ------------
Peter J. Jegou 1996 $159,346 0 $11,807 10,000 0 0 0
Chief Executive 1995 $152,957 0 $15,921 0 550,000 0 0
Officer 1994 $141,633(2) 0 $14,595 0 125,000 0 0
</TABLE>
_____________________
(1) Automobile expenses.
(2) Mr. Jegou was entitled to receive $171,357 in salary during fiscal 1994.
Due to the serious financial constraints under which the Company was then
operating, Mr. Jegou waived $29, 724 in compensation which amount was
credited to additional paid-in capital.
Stock Option Grants for Fiscal Year Ended May 31, 1996
No grants of stock options were made during fiscal 1996 to the sole
executive officer named in the Summary Compensation Table.
Aggregated Stock Option Exercises in Last Fiscal Year and
Fiscal Year-End Stock Option Values
No stock options were exercised during fiscal 1996 by any person named in
the Summary Compensation Table holding stock options which were eligible to be
exercised. The following table set forth the fiscal 1996 ending stock option
values of the sole executive officer named in the Summary Compensation Table:
<TABLE>
<S> <C> <C> <C> <C> <C>
Value of
Number of Unexercised
Unexercised in the Money
Options at Options at
FY-End FY-End
Shares Value Exercisable/ Exercisable/
Name Acquired Received Unexercisable Unexercisable Unexercisable
- ---- -------- -------- ------------- ------------- -------------
Peter J. Jegou 0 0 0 $325,000/ $262,813/0 (1)
$350,000
<FN>
<PAGE 7>
______________________
(1) Based on the closing price on May 31, 1996 ($1.8125) as quoted in the
Nasdaq System and reported by the NASD.
</FN>
</TABLE>
Stock Options and Warrants to Directors and Certain Officers
During fiscal 1995 and the fiscal year ended May 31, 1997, the Company
issued the stock options and the warrant hereinafter described to Peter J.
Jegou, its Chairman of the Board, President and Chief Executive Officer and a
director, and Carol A. Kulina-Jegou, its Secretary and a director and, until
December 31, 1995, its Executive Vice President. The exercise prices of all of
the stock options and the warrants were below the fair market value of the
Common Stock on the respective date of grant.
1. On November 7, 1994, the Company granted to Mr. Jegou a stock option
expiring November 6, 1999 to purchase 150,000 shares of the Common Stock at
$.75 per share. The consideration for this grant was Mr. Jegou's agreement not
to have his 10% Note due April 29, 1995 (the "10% Note") in the then principal
amount of $167,000 prepaid in March 1994 as were the 10% Notes of the other
noteholders. During fiscal 1994 and fiscal 1995, payments of $70,150 and
$96,850, respectively, were made to Mr. Jegou with respect to the 10% Note.
2. On November 7, 1994, the Company granted to Mr. Jegou a stock option
expiring November 6, 1999 to purchase 400,000 shares of the Common Stock at
$1.00 per share. The consideration for this grant was Mr. Jegou's services in
connection with a gaming project (the "Gaming Project"). The stock option
became exercisable as to 50,000 shares on May 7, 1995 and the balance was to
become exercisable in installments based upon the occurrence of specified
developments in the Gaming Project. On September 3, 1996, in consideration of
the fact that consummation of the Gaming Project was not likely to occur, at
least not during the next two years, the stock option was amended to become
exercisable as to the remaining 350,000 shares whenever a gaming vessel was to
be put into service.
3. On November 7, 1994 the Company granted to Ms. Kulina-Jegou a stock
option expiring November 6, 1999 to purchase 50,000 shares of the Common Stock
at $1.00 per share. The consideration for the stock option was her years of
service to CLP and her then contemplated retirement. The stock option first
became exercisable on December 31, 1995 when Ms. Kulina-Jegou resigned as
Executive Vice President, and retired as an employee of the Company.
4. On August 7, 1996, the Company granted to Mr. Jegou a warrant
expiring August 6, 1999 to purchase, commencing February 7, 1997, 1,500,000
shares of the Common Stock at $.75 per share. The consideration for the
warrant was Mr. Jegou's services in developing alternative gaming projects for
a subsidiary of the Company. Mr. Jegou has exercised the warrant as to
1,000,000 shares, 500,000 shares at $.25 per share each on December 26, 1996
and on January 16, 1997,
<PAGE 8>
after the Board on November 29, 1996 and January 5, 1997, respectively,
lowered the exercise price to $.25 per share and waived the prohibition
on exercise until February 7, 1997 as to such shares.
Compensation to Directors
No compensation is paid to a director as such, for his or her services,
but, by resolution of the Board of Directors, a fixed sum and expenses for
actual attendance at each regular or special meeting of the Board may be
authorized.
Employment Agreements
On September 25, 1996, the Company entered into a three-year employment
agreement with Peter J. Jegou, its Chairman of the Board, President and Chief
Executive Officer, providing for a base annual salary of $200,000 and an
incentive bonus arrangement to be determined.
Compliance with Section 16(a) of the Exchange Act
Based only upon a review of Forms 3, 4 and 5 filed under Section 16(a) of
the Exchange Act, the Company is not aware of any director or officer of the
Company who failed to file on a timely basis, as disclosed in such forms,
reports required by Section 16(a) of the Exchange Act during fiscal 1996 or
prior years. Except as identified under the caption "Security Ownership of
Certain Beneficial Holders and Management," the Company is not aware of any
beneficial owner of 10% or more of the outstanding shares of the Common Stock,
which is the only security of the Company registered under Section 12 of the
Exchange Act. The Company believes that David Slyman filed late a Form 3
relating to his beneficial ownership in fiscal 1995 and that none of Lee S.
Rosen, Zimco S.A. and Patyam Stiftung had any obligation to file pursuant to
Section 16(a) of the Exchange Act during fiscal 1996.
Certain Transactions
Carol Kulina-Jegou, the Secretary and a director of the Company, owns the
copyrights for the children stationary, card and paper activity products of
Kards for Kids. Ms. Kulina-Jegou also owns the following registered
trademarks: "Mommy I Can Do It Myself", "Kards for Kids" and "Mommy I Can
Learn Myself." Pursuant to a Trademark License Agreement dated January 15,
1987, effective retroactive to May 18, 1986 (the "Trademark License"), Ms.
Kulina-Jegou retains the right to inspect the materials, manufacturing and
recording processes employed by Kards for Kids, Inc. in the manufacturing of
the prerecorded video cassette tapes in order to maintain quality control over
the products. The Trademark License has remained effective subsequent to the
resignation of Ms. Kulina-Jegou effective December 31, 1995. See the section
"Business History" under this caption "Management." Ms. Kulina-Jegou is in the
process of negotiating with Kards for Kids, Inc. a royalty for the copyrights
and trademarks, which royalty will not exceed 5% of gross revenues as
previously agreed.
<PAGE 9>
Although Lee S. Rosen, a nominee for election as a director, was not a
director at the time, on April 16, 1996, the Company, pursuant to a consulting
agreement for financial and public relations services, issued to Lee S. Rosen a
Common Stock purchase warrant expiring April 15, 1999. On August 7, 1996, the
Company entered into a new consulting agreement with Mr. Rosen pursuant to
which Mr. Rosen agreed to assume the financial and public relations services to
be performed by another person and to assist in obtaining docking for the small
business issuer's gaming vessel project. The Company issued to Mr. Rosen
Common Stock purchase warrants expiring April 15, 1999 and August 6, 1999 to
purchase, commencing February 7, 1997, 2,000,000 and 1,000,000 shares,
respectively, of the Common Stock at $.75 per share.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND MANAGEMENT
The following table sets forth certain information, as of the Record Date,
with respect to (1) any person or "group" who owned beneficially more than 5%
of the Common Stock; (2) each director of the Company; (3) the Chief Executive
Officer of the Company; (4) each other executive officer of the Company who was
paid more than $100,000 in fiscal 1996 (of which there were none), and (5) all
directors and executive officers as a group. Each beneficial owner has advised
the Company that he or she has sole voting and investment power as to the
shares of the Common Stock reported in the table, except that the Common Stock
purchase warrants and stock options described in the notes below do not have
any voting power until exercised and may not be sold or otherwise transferred
except in compliance with the Securities Act.
Number of Shares
Name and Address Beneficially Owned Percentage(1)
- ---------------- ------------------ -------------
David Slyman 5,488,520(2) 25.4%
2019 Ford Road
Sheffield, AL 35660
Lee S. Rosen 2,200,000(3) 10.5%
17332 Saint James Court
Boca Raton, FL 33496
<PAGE 10>
Number of Shares
Name and Address Beneficially Owned Percentage(1)
- ---------------- ------------------ -------------
Waal Investment Ltd. 1,589,058(4) 8.2%
c/o Royce Investments Group, Inc.
199 Crossways Park Drive
Woodbury, NY 11797
North West Holding, Ltd 1,249,181(5) 6.5%
c/o Royce Investment Group, Inc.
199 Crossways Park Drive
Woodbury, NY 11797
Peter J. Jegou (6)(7) 2,353,898(8) 11.9%
150 Morris Avenue
Springfield, NJ 07081
Carol A. Kulina-Jegou (7)(9) 220,000(10) 1.2%
150 Morris Avenue
Springfield, NJ 07081
All directors and 2,638,898(8)(10)(11) 13.3%
executive officers as
a group (3 persons)
___________________
1. The percentages computed in this column of the table are based upon
18,398,727 shares of the Common Stock outstanding as of the Record Date,
which amount includes 150,000 shares held in escrow as security in the
event a creditor of Roburn International Corporation ("Roburn"), a non-
operating wholly-owned subsidiary of the Company, asserts a claim against a
purchaser of the Roburn assets and is not otherwise satisfied and excludes
(a) 1,333,333 shares to be issued to a consultant as a bonus, (b) 22,997
shares to be issued in satisfaction of claims to dividends upon conversion
of the Company's Series A Preferred Stock, $1.00 par value (the "Series A
Preferred Stock"), and (c) 54,740 shares issuable in settlement of trade
creditors claims against a subsidiary of the Company. Effect is given,
where appropriate, pursuant to Rule 13d-3(d)(3)(i) under the Securities
Exchange Act (the "Securities Exchange Act of 1934, as amended (the
"Exchange Act")), to shares issuable upon the exercise of warrants and
stock options which are currently exercisable or exercisable within 60 days
of January 31, 1997. Effective is also given, where appropriate in the
following notes, to the antidilution provisions of the warrants as of
January 31, 1997. All warrants and stock options in the following notes
are currently exercisable unless otherwise stated.
<PAGE 11>
2. According to a Schedule 13D filed by the holder under the Exchange Act, the
holder acquired the shares reported in the table from Bennett Management &
Development Corp., the purchaser in a private placement pursuant to
regulation D on September 8, 1994. The shares include 3,238,520 shares of
the Common Stock issuable upon the exercise of a warrant expiring on March
7, 1998
3. The shares reported in the table include (a) 1,500,000 shares issuable upon
the exercise of a warrant expiring April 15, 1999 and (b) 1,000,000 shares
issuable upon the exercise of a warrant expiring August 6, 1999.
4. The shares reported in the table include (a) 106,330 shares issuable upon
the exercise of warrants expiring between July 20, 2000 and October 18,
2000 and (b) 835,059 shares issuable upon the exercise of a warrant
expiring March 5, 1998.
5. The shares reported in the table include (a) 34,026 shares issuable upon
the exercise of a warrant expiring December 26, 2000, (b) 262,458 shares
issuable upon the exercise of a warrant expiring March 5, 1998, (c) 37,783
shares issuable upon the exercise of warrants expiring between February 28
and May 6, 2001 and (d) 393,824 shares issuable upon the exercise of a
warrant expiring March 5, 1998.
6. Chairman of the Board, President and Chief Executive Officer of the
Company.
7. Peter J. Jegou and Carol A. Kulina-Jegou are husband and wife. Each
disclaims beneficial ownership of the other's shares.
8. The shares reported in the table include those issuable upon the exercise
of (a) a stock option expiring May 18, 1999 to purchase 125,000 shares of
the Common Stock, (b) a stock option expiring November 6, 1999 to purchase
150,000 shares of the Common Stock, (c) a stock option expiring November 6,
1999 to purchase 50,000 shares of the Common Stock, (d) a warrant expiring
one year from the effective date of the Company's Registration Statement
on Form SB-2, File No. 333-19663, to purchase 16,000 shares of the Common
Stock, (e) warrant expiring April 29, 1998 to purchase 231,948 shares and
(f) 1,000,000 shares issuable upon the exercise of a warrant, expiring
August 6, 1999. The shares reported in the table do not include (a) 350,000
shares issuable upon the exercise of a stock option expiring November 6,
1999 as to which the stock option is not currently exercisable or
exercisable within 60 days of January 31, 1997 and (b) 3,856 shares of the
Common Stock to be issued to Mr. Jegou in lieu of any claim by him to
accumulated but undeclared and unpaid dividends on the Series A Preferred
Stock, 51,412 shares of which he converted as of May 31, 1994 into 12,853
shares of the Common Stock.
9. A director and the Secretary of the Company.
<PAGE 12>
10. The shares reported in this table include those issuable upon the exercise
of a stock option expiring November 6, 1999 to purchase 50,000 shares of
the Common Stock.
11. The amount reported in the table includes (a) 50,000 shares of the Common
Stock beneficially owned by an executive officer of the Company and (b)
15,000 shares issuable upon the exercise of a stock option expiring July 6,
2000 held by such offer.
PROPOSAL TWO: APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has reappointed BDO Seidman, LLP as the Company's
independent public accountants for the fiscal year ending May 31, 1998. BDO
Seidman, LLP served as independent auditors for the Company for the first time
in fiscal 1995. Shareholder approval requires the affirmative vote of the
holders of a majority of the shares represented and entitled to vote at the
Annual Meeting.
The Board is seeking shareholder approval of its selection of BDO
Seidman, LLP. The Business Corporation Act of the State of New Jersey does not
require the approval of the selection of independent auditors by the Company's
shareholders; however, in view of the importance of the financial statements to
shareholders, the Board of Directors deems it desirable that shareholders pass
upon the selection of auditors. In the event that shareholders disapprove of
the selection, the Board of Directors will consider the selection of other
auditors.
A representative of BDO Seidman, LLP will be present at the Annual
Meeting. The Company has been informed that the representative does not intend
to make any statement to the shareholders at the Annual Meeting, but will be
available to respond to appropriate questions from shareholders.
PROPOSAL THREE: APPROVAL OF THE CHANGE OF THE NAME OF THE COMPANY
The Board of Directors of the Company deems it advisable and in the best
interest of the Company that the Company change its name from Creative Learning
Products, Inc. to Creative Gaming, Inc. and pursuant to a unanimous consent of
the Board dated February 20, 1997, the Board adopted the following resolution:
"RESOLVED, that, subject to shareholder approval at the
Annual Meeting of Shareholders to be held on April 11,
1997, or at any adjournment thereof, the name of the
Company be changed from Creative Learning Products,
Inc. to Creative Gaming, Inc.; that
<PAGE 13>
counsel to the Corporation be, and such firm hereby is,
authorized to prepare the Certificate of Amendment of the
Certificate of Incorporation of the Company setting forth
such name change in the form complying with the Business
Corporation Act of the State of New Jersey; and that
the proper officers of the Company be, and they hereby
are, authorized and directed to execute and cause said
Certificate to be filed with the Secretary of State of
New Jersey with such changes thereto that they deem
necessary and appropriate in order to effect the
purposes and intent of this resolution."
The Company was incorporated on August 31, 1988 to provide management
and administrative services to its wholly-owned subsidiaries. Since February
1994, the Company has been engaged in the process of attempting to convert CLP
from an entity offering only a line of children's products and writing
instruments into an entity which primarily would be offering gaming facilities
and equipment, a hotel convention center, a theme park and a time sharing
facility and entertainment to its customers. Management intends that the
primary future focus of CLP will be on various gaming projects conducted on
behalf of the Company through Creative Gaming International, Inc., a wholly-
owned subsidiary of the Company incorporated in March 1994 or CGI Vessel, Inc.,
a wholly-owned subsidiary of the Company incorporated in December 1996.
The Board believes that a new name - such as Creative Gaming, Inc. -
will better describe the future operations of the Company or CLP.
The Board recommends a vote FOR the foregoing resolution in order that
the Company's corporate name better reflect the business it conducts. Approval
of the name change requires the affirmative vote of a majority of all of the
outstanding shares entitled to vote at the Annual Meeting and proxies not
marked to the contrary will be so voted at the Annual Meeting.
PROPOSAL FOUR: APPROVAL OF THE INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK
The Board of Directors of the Company has approved and recommends an
Amendment to Article IV of the Certificate of Incorporation of the Company to
increase the authorized shares of the Common Stock from 25,000,000 to
100,000,000. There will be no change effected in the par value of the Common
Stock, which will remain as no par value. The failure to adopt this proposal
will put the Company in the position of potentially being unable to fulfill its
obligations to issue shares upon the exercise of outstanding stock options and
warrants.
As of the Record Date, there were [18,398,727] shares of the Common
Stock outstanding, and there were reserved, as of such date, an aggregate of
[17,286,662] shares of the Common Stock, consisting of (1) 14,845,592 shares
reserved for the exercise of warrants; (2) 1,030,000 shares
<PAGE 14>
reserved for the exercise of options; (3) 1,333,333 shares reserved to be
issued to a consultant as a bonus; (4) 22,997 shares reserved to be issued
in lieu of claims to dividends on the Series A Preferred Stock of which
Peter J. Jegou, the principal executive officer and a director of the
Company, would receive 3,856 shares as a result of his conversion of
51,412 shares of the Series A Preferred Stock into 12,853 shares of the
Common Stock; and (5) 54,740 shares to be issued in partial settlement of
trade creditor claims against a subsidiary of the Company, the operations
of which subsidiary have been discontinued. None of the warrants are owned
by executive officers or directors of the Company except that Mr. Jegou
holds warrants to purchase an aggregate of 1,247,948 shares and stock
options to purchase an aggregate of 675,000 shares. Carol Kulina-Jegou,
a director, holds an stock option to purchase 50,000 shares. Walter J.
Krzanowski, the principal financial and accounting officer of the Company,
holds an stock option to purchase 15,000 shares. Due to the antidilution
provisions in certain of the warrants, the number of shares of the Common
Stock reserved for issuance may in the future be further adjusted. An
aggregate of [35,685,389] shares of the Common Stock would be outstanding if
all of the shares reserved as of the Record Date were issued. Accordingly,
the authorization of shares would be exceed by [10,685,389] shares. In
addition, because of the Company's financing requirements, additional shares
will likely be issued, whether made subject to additional Common Stock
purchase warrants and stock options or issued directly. Recognizing that
CLP requires approximately $25,000,000 to launch its gaming vessel project,
management must seek financing for this purpose. In addition, CLP
will require substantial funding if it proceeds with a proposed Indian
gaming facility in Seneca, Missouri. The inability to have sufficient
shares of the Common Stock to use in these potential financings would
terminate CLP's proposed Gaming Projects until funds could otherwise be
obtained. There is no assurance that any or all of the foregoing
financings will be consummated.
In addition, the Board deems it advisable to be in a position to grant
stock options in the future as an incentive for attracting and retaining
qualified and competent employees by providing them with the ability to acquire
a proprietary interest in the company through ownership of the Common Stock.
The Company currently has no such stock option plan.
The Board has in the past issued shares of the Common Stock to employees
as additional compensation, granted stock options to consultants for services
to be rendered and has issued shares of the Common Stock in settlement of
claims. The Board deems it advisable to have shares of the Common Stock
available for such purposes in the future.
Although the Board has no specific company as to which its stock or
assets would be acquired under consideration, the Board believes that, should
an appropriate acquisition opportunity present itself in the future, the
Company should have the flexibility to use shares of the Common Stock instead
of, or in addition to, cash to effect such an acquisition.
<PAGE 15>
Except as described in the preceding four paragraphs, there are no other
proposals for use of the Common Stock which have been approved or which are
currently under consideration by the Board of Directors.
Effect on Shareholders
Holders of the Common Stock have no preemptive rights and are entitled
to dividends when and if declared by the Board of Directors (see the second
succeeding paragraph). Each holder of the Common Stock has one vote per share
on all matters submitted to shareholders for a vote. The proposed Amendment to
the Articles of Incorporation would create no material differences between
shares of the Common Stock prior to the Amendment and the shares of the Common
Stock after the Amendment.
Authorization of the additional shares of the Common Stock will have no
effect on the rights of the existing holders of the Common Stock and their
rights will continue as described in the preceding paragraph, unless and until
such shares are issued, in which event the only effect will be a dilution of
the voting rights of such holders as a result of the increased number of
outstanding shares of the Common Stock.
Although the issuance of additional shares of the Common Stock would
theoretically increase the amount necessary to pay dividends, management does
not anticipate, because of the current financial requirements of the Company,
its financial condition and the terms of the outstanding shares of the
Preferred Stock (assuming such shares would be issued), that dividends will be
paid in the foreseeable future.
The fact that the Company may issue so many additional shares may, in
the opinion of management, have a depressive effect on the market price for the
Common Stock.
The number of the additional shares which may be issued and the extent
of dilution of voting rights cannot be predicted because the Board does not
know for what number of shares, if any, whether part or all of the outstanding
stock options or warrants will be exercised. In addition, the Board does not
know the number of shares, whether of the Common Stock or securities
convertible or exercisable into shares of the Common Stock, that may be issued
in future private placements or public offerings, or which may be used to
effectuate future acquisitions.
For the reasons described above, the Board of Directors recommends that
the shareholders vote FOR increase in the authorized number of shares of the
Common Stock. Approval of the increase in the authorized number of shares of
the Common Stock requires the affirmative vote of a majority of all of the
outstanding shares entitled to vote at the Annual Meeting and proxies not
marked to the contrary will be so voted at the Annual Meeting.
<PAGE 16>
INTEREST OF MANAGEMENT
Because Peter J. Jegou, a director and an executive officer of the
Company, has outstanding options and warrants to purchase shares of the Common
Stock and each director and executive officer (including Mr. Jegou) may be
granted options in the future, they have an interest in having the proposed
Amendment to increase the number of authorized shares of the Common Stock
approved by the shareholders. Other than the election of directors, there is
no other proposal in the Notice of Annual Meeting as to which the directors and
executive officers have any special interest, although they recommend the
approval of all proposals by the shareholders.
FINANCIAL STATEMENTS
The following financial statements, management's discussion and analysis
and market information, all of which appear in the Company's 1996 Annual
Report on Form 10-KSB for the year ended May 31, 1996, a copy of which
accompanies this Proxy Statement, are incorporated herein by this
reference:
Page
in 1996
Annual
Item Report
---- ------
1. Report of Certified Public Accountants ................... F-1
2. Consolidated Balance Sheet at May 31, 1996............... F-2
3. Consolidated Statements of Operations for the
Years Ended May 31, 1996 and 1995......................... F-4
4. Consolidated Statements of Stockholders' Equity for
the Years Ended May 31, 1996 and 1995..................... F-5
5. Consolidated Statements of Cash Flow for the Years
Ended Years Ended May 31, 1996 and 1995................... F-6
6. Notes to Consolidated Financial Statements................ F-7
7. Management's Discussion and Analysis or Plan of
Operations................................................ 17
8. Market Information........................................ 16
<PAGE 17>
The following financial statements and management's discussion and
analysis, all of which appear in the Company's Quarterly Report on Form
10-QSB, as amended, for the quarter ended November 30, 1996, a copy of
which report accompanies this Proxy Statement, are incorporated herein
by this reference:
Page
in Form
Item 10-QSB/A
---- --------
1. Consolidated Balance Sheet at May 31, 1996........... 3
2. Consolidated Statements of Operations for the Quarter
Ended November 30, 1996 and 1995..................... 5
3. Consolidated Statements of Operations for the
Six Months Ended November 30, 1996 and 1995.......... 6
4. Consolidated Statements of Cash Flows for the
Six Months Ended November 30, 1996 and 1995.......... 7
5. Notes to Financial Statements-November 30, 1996...... 8
6. Management's Discussion and Analysis or Plan of
Operation............................................ 12
OTHER MATTERS COMING BEFORE THE ANNUAL MEETING
As of the date of this Proxy Statement, the Board of Directors does not
know of any matters to be presented to the Annual Meeting other than the first
four proposals set forth in the attached Notice of Annual Meeting. If any
other matters properly come before the Annual Meeting, it is intended that the
holders of the management proxies will vote thereon in their discretion.
MISCELLANEOUS
The solicitation of proxies on the enclosed form of proxy is made by and
on behalf of the Board of Directors of the Company and the cost of this
solicitation is being paid by the Company. In addition to the use of the
mails, proxies may be solicited personally, or by telephone or telegraph, by
the officers or directors of the Company.
Shareholder proposals for inclusion in the Company's Proxy Statement for
the 1997 Annual Meeting of Shareholders must be received no later than a
reasonable time before the solicitation is made.
<PAGE 18>
A copy of the 1996 Annual Report accompanies this Proxy Statement.
There will be no separate Annual Report to shareholders other than the Annual
Report on Form 10-KSB for the fiscal year ended May 31, 1996, (i.e., the 1996
Annual Report). A copy of any exhibits to the 1996 Annual Report may be
obtained by written or oral request to Walter J. Krzanowski, the Treasurer of
the Company, at the following address: 150 Morris Avenue, Springfield, New
Jersey 07081 or telephone number: (201) 467-0266. A reasonable fee for
duplicating and mailing will be charged if a copy of any exhibit is requested.
By Order of the Board of Directors
/s/Carol A. Kulina-Jegou
------------------------
Carol A. Kulina-Jegou
Secretary
March 20, 1997
<PAGE 19>
Table of Contents
Page
Notice of the Annual Meeting Creative Learning, Inc.
of Shareholders N/A Notice of Annual Meeting
Proxy Statement: 1 of Shareholders
Voting Securities 1
Proposal One: Election of Directors 2
Nominees for Election 2
Family Relationships of Nominees 3
Business History of Nominees 3
Committees and Board Meetings 4
Management 4
Directors and Executive Officers 4
Business History 5
Family Relationships 5
Executive Compensation 5
Summary Compensation Table 5
Stock Option Grants for Fiscal Year 6
Ended May 31, 1996
Aggregated Stock Option Exercises in 6
Last Fiscal Year and Fiscal Year-End
Stock Option Values 6
Stock Options and Warrants to Directors 7
and Certain Officers
Compensation to Directors 8
Employment Agreements 8
Compliance with Section 16(a) of the 8
Exchange Act
Certain Transactions 8
Security Ownership of Certain Beneficial 9
Holders and Management
Proposal Two: Appointment of Independent 12
Auditors
Proposal Three: Approval of the Change of 13
the Name of the Company
Proposal Four: Approval of the Increase in 14
the Number of Authorized Shares of
Common Stock
Effect on Shareholders 15
Interest of Management 16
Financial Statements 16
<PAGE 20>
Other Matters Coming Before the Annual 17
Meeting 7
Miscellaneous 18
April 11, 1997
<PAGE I>
CREATIVE LEARNING PRODUCTS, INC.,
150 Morris Avenue, Springfield, New Jersey 07081
PROXY
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Peter J. Jegou and Carol A. Kulina-Jegou as
Proxies, each with the power to appoint his or her substitute, and hereby
authorizes them to represent and to vote, as designated below, all of the
Common Stock of Creative Learning Products, Inc. held of record by the
undersigned on March 17, 1997 at the Annual Meeting of Shareholders to be held
on April 18, 1997 or at any adjournment thereof.
1. Election of PETER J. JEGOU, CAROL A. KULINA-JEGOU, ROBERT W. BEREND, HARVEY
FREEMAN, AND LEE S. ROSEN, _________________ and __________________ AS
DIRECTORS OF THE COMPANY.
[] FOR all nominees listed above
FOR all nominees listed above EXCEPT:_______________________________________
(INSTRUCTION: To withhold authority to vote on any individual nominee,
write his name in the space above.)
[] WITHHOLD AUTHORITY to vote for all the nominees listed above
2. Proposal to Ratify the Appointment of BDO Seidman, LLP as Independent Public
Accountants of the Company
[] FOR [] AGAINST [] ABSTAIN
3. Proposal to Approve Amendment to Certificate of Incorporation to change the
name of the Company
[] FOR [] AGAINST [] ABSTAIN
4. Proposal to Approve Amendment to Certificate of Incorporation to increase
the authorized shares of Common Stock of the Company
[] FOR [] AGAINST [] ABSTAIN
5. To transact such other business as may come before the Annual Meeting or any
adjournment thereof.
This proxy, when executed, will be voted in the manner directed by the
undersigned shareholder. If no direction is made, this proxy will be voted
FOR Proposals 1, 2, 3 and 4.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
Please sign exactly as your
name appears below. When
shares are held by joint
tenants, please both sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.
If a corporation, please sign in
full corporate name by the
President or other
partnership name by a duly
authorized person.
____________________________
Signature
____________________________
Signature, if held jointly
Date: ________________, 1997
