FUN TYME CONCEPTS, INC.
290 Wild Avenue
Staten Island, New York 10314
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on April 21, 1997
To the Shareholders of FUN TYME CONCEPTS, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of FUN
TYME CONCEPTS, INC. (the "Corporation") will be held at Klarman & Associates at
14 East 60th Street, New York, New York 10022 on April 21, 1997 at 10:00 a.m.,
New York time, for the following purposes:
1. To elect three Directors to the Corporation's Board of Directors to hold
office for a period of one year or until their successors are duly elected and
qualified.
2. To vote on the proposal to reverse-spilt the Corporation's outstanding
shares on a 1 for 3 basis.
3. To transact such other business as may properly be brought before the
meeting or any adjournment thereof.
The close of business on March 21, 1997 has been fixed as the record
date for the determination of shareholders entitled to notice of, and to vote
at, the meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you
plan to attend, please complete, date and sign the accompanying proxy and return
it promptly in the enclosed envelope to assure that your shares are represented
at the meeting. If you do attend, you may revoke any prior proxy and vote your
shares in person if you wish to do so. Any prior proxy will automatically be
revoked if you execute the accompanying proxy or if you notify the Secretary of
the Corporation, in writing, prior to the Annual Meeting of Shareholders.
By order of the Board of Directors
Richard Rosso, Secretary
Dated: April 1, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN
THE ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR
SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES.
<PAGE>
FUN TYME CONCEPTS, INC.
290 Wild Avenue
Staten Island, New York 10314
PROXY STATEMENT
FOR
Annual Meeting of Stockholders
To Be Held on April 21, 1997
This proxy statement and the accompanying form of proxy have been
mailed on , 1997 to the stockholders of record on March 21, 1997 of Fun Tyme
Concepts, Inc., a New York corporation (the "Corporation") in connection with
the solicitation of proxies by the Board of Directors of the Corporation for use
at the Annual Meeting to be held on April 21, 1997 and at any adjournment
thereof.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
Shares of the Corporation's common stock (the "Common Stock")
represented by an effective proxy in the accompanying form will, unless contrary
instructions are specified in the proxy, be voted FOR (i) the election of the
three (3) persons nominated by the Board of Directors as directors and (ii) the
proposal to reverse-spilt the Corporation's outstanding shares on a 1 for 3
basis (1 new share for every 3 shares presently owned).
Any such proxy may be revoked at any time before it is voted. A
stockholder may revoke this proxy by notifying the Secretary of the Corporation
either in writing prior to the Annual Meeting or in person at the Annual
Meeting, by submitting a proxy bearing a later date or by voting in person at
the Annual Meeting. An affirmative vote of a plurality of the shares of Common
Stock, present in person or represented by proxy, at the Annual Meeting and
entitled to vote thereon is required to elect the directors. A stockholder
voting through a proxy who abstains with respect to the election of directors is
considered to be present and entitled to vote on the election of directors at
the meeting, and is in effect a negative vote, but a stockholder (including a
broker) who does not give authority to a proxy to vote, or withholds authority
to vote, on the election of directors shall not be considered present and
entitled to vote on the election of directors. A stockholder voting through a
proxy who abstains with respect to approval of any other matter to come before
the meeting is considered to be present and entitled to vote on that matter and
is in effect a negative vote, but a stockholder (including a broker) who does
not give authority to a proxy to vote, or withholds authority to vote, on any
such matter shall not be considered present and entitled to vote thereon.
The Corporation will bear the cost of the solicitation of proxies by
the Board of Directors. The Board of Directors may use the services of its
executive officers and certain directors to
<PAGE>
solicit proxies from stockholders in person and by mail, telegram and telephone.
Arrangements may also be made with brokers, fiduciaries, custodians, and
nominees to send proxies, proxy statements and other material to the beneficial
owners of the Corporation's Common Stock held of record by such persons, and the
Corporation may reimburse them for reasonable out-of-pocket expenses incurred by
them in so doing.
The Corporation's Annual Reports on Form 10-KSB for the year ended
March 31, 1996 and quarterly report for the nine month period ended December 31,
1996 accompanies this proxy statement. The principal executive offices of the
Corporation are located at 290 Wild Avenue, Staten Island, New York 10314 the
Corporation's telephone number is (718) 761-6100.
Independent Public Accountants
The Board of Directors of the Corporation has selected Richard A
Eisner & Co., Certified Public Accountants, as independent accountants of the
Corporation for the calander year ending March 31, 1997. Stockholders are not
being asked to approve such selection because such approval is not required. The
audit services provided by Richard A Eisner & Co., consisted of examination of
financial statements, services relative to filings with the Securities and
Exchange Commission, and consultation in regard to various accounting matters.
Representatives of Richard A Eisner & Co. are expected to be present at the
meeting and will have the opportunity to make a statement if they so desire and
answer appropriate questions.
VOTING SECURITIES AND SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The securities entitled to vote at the meeting are the Corporation's
Common Stock, $.01 par value per share. The presence, in person or by proxy, of
a majority of shares entitled to vote will constitute a quorum for the meeting.
Each share of Common Stock entitles its holder to one vote on each matter
submitted to stockholders. The close of business on March 21, 1997 has been
fixed as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting and any adjournment thereof. At that date,
2,676,000 shares of Common Stock were outstanding. Voting of the shares of
Common Stock is on a non-cumulative basis.
The following table sets forth information as of April 1, 1997, with
respect to the beneficial ownership of shares of Common Stock by (i) each person
(including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended), known by the Corporation to be the
owner of more than 5% of the outstanding shares of Common Stock, (ii) each
director, and (iii) all officers and directors as a group. Except to the extent
indicated in the footnotes to the following table, each of the individuals
listed below possesses sole voting power with respect to the shares of Common
Stock listed opposite his name.
<PAGE>
<TABLE>
<CAPTION>
Number of Percentage of
Name and Address Shares Shares Owned (1)
<S> <C> <C>
Daniel Catalfumo (2)(3) 512,365 19.1%
c\o Fun Tyme Concepts, Inc.
290 Wild Avenue
Staten Island, New York 10314
Richard Rosso (3)(4) 362,278 13.7%
c\o Fun Tyme Concepts, Inc.
290 Wild Avenue
Staten Island, New York 10314
Daniel Buchanan (9) 15,000 *
c/o Fun Tyme Concepts, Inc
290 Wild Avenue
Staten Island, New York 10314
Imafina, S.A (10) 500,000 17.1% (11)
Route de Beaumont
4 case 952 ch 1700
Fribourg, Switzerland
All officers and directors 889,643 33.2%
as a group (3 persons) (2)-(4)(9)
</TABLE>
* Less than 1%
(1) Does not include (i) 1,500,000 shares issuable upon the exercise of the
Warrants (the 1,500,000 shares of Common Stock issuable upon the exercise of the
Warrants are included in the percentage calculation of Imafina, S.A.'s share
holdings) (ii) 250,000 shares issuable upon the exercise of the Underwriter's
Warrants and the Warrants issuable upon the exercise thereof and 150,000 shares
issuable under the Company's Senior Management Incentive Plan, of which 15,000
shares have been issued subject to a vesting schedule.
(2) Includes an aggregate of 151,365 shares of Common Stock owned by
members of Daniel Catalfumo's family, of which Mr. Catalfumo disclaims
beneficial ownership.
(3) Includes 6,278 shares of Common Stock owned by Richard Rosso's parents,
of which Mr. Rosso disclaims beneficial ownership.
(4) Includes 250,000 shares of Common Stock and 250,000 shares of Common
Stock issuable upon the exercise of outstanding Warrants.
Certain Reports
No person who, during the year ended March 31, 1996, was a director,
officer or beneficial owner of more than ten percent of the Corporation's Common
Stock (which is the only class of securities of the Corporation registered under
Section 12 of the Securities Exchange Act of 1934 (the "Act") (a "Reporting
Person") failed to file on a timely basis, reports required by Section 16 of the
Act during the most recent fiscal year or prior years. The foregoing is based
solely upon a review by the Corporation of Forms 3 and 4 during the most recent
fiscal year as furnished to the Corporation under Rule 16a-3(d) under the Act,
and Forms 5 and amendments thereto furnished to the Corporation with respect to
its most recent fiscal year, and any representation received by the Corporation
from any reporting person that no Form 5 is required, except as described
herein.
<PAGE>
RECENT DEVELOPMENTS
NEED TO UPDATE STATUS OF NEW BRUNSWICH LEASE, ONTARIO ACQUISITON,
CHINA PROJECTS AND DELTA PLY STRATEGIC ALLIANCE
It is expected that the following will be considered at the meeting and
action taken thereon.
I. ELECTION OF DIRECTORS
The Board of Directors currently consists of four members elected for
a term of one year and until their successors are duly elected and qualified.
An affirmative vote of a plurality of the shares of Common Stock,
present in person or represented by proxy at the Annual Meeting, and entitled to
vote thereon is required to elect the directors. All proxies received by the
Board of Directors will be voted for the election as directors of the nominees
listed below if no direction to the contrary is given. In the event any nominee
is unable to serve, the proxy solicited hereby may be voted, in the discretion
of the proxies, for the election of another person in his stead. The Board of
Directors knows of no reason to anticipate this will occur.
The following table sets forth as of April 1, 1997 with respect to the
three nominees for election as directors of the Corporation:
<TABLE>
<CAPTION>
Position with Corporation; Continually
Name Principal Occupation and Age Since
<S> <C> <C>
Daniel Catalfumo President and Director, 39 1993
Richard Rosso Secretary, Treasurer and Director, 39 1993
Dan Buchanan Director, 49 1995
</TABLE>
All directors hold office until the next annual meeting of stockholders or
until their successors are duly elected and qualified. Officers are elected
annually by, and serve at the discretion of the Board of Directors. Richard
Rosso is Daniel Catalfumo's uncle.
Daniel Catalfumo has been the president and a director of the Company since
its inception in 1993. From 1982 to November 1994, Mr. Catalfumo was the sole
shareholder, officer and director of Professional Tile Contracting Co., a tile
contracting company located in Brooklyn, New York. Professional Tile Contracting
Co. completed over 200 projects in fiscal
<PAGE>
1994, many of which were for homeowners in the New York area. The largest
project undertaken by Professional Tile Contracting Co. during fiscal 1994 was
the U.S. Navy Homeport Housing, which project represents the largest
construction site in the history of Staten Island. Mr. Catalfumo has overseen
all facets of Professional Tile Contracting Co.'s business, including management
of operations, supervision of employees on job sites, sales and marketing.
Richard Rosso has been the secretary, treasurer and a director of the
Company since its inception in 1993. From 1983 to November 1994, Mr. Rosso was
the owner of Dynamic Dental Labs located in Brooklyn, New York. Mr. Rosso
operated Dynamic Dental Labs for over ten years, servicing over 1,000 area
dentists. His experience includes everyday operations with employees, marketing
and sales, and dealing with many dentists in the Bay Ridge Business Association.
Dan Buchanan was engaged as a consultant to the Company and elected as
a Director in December 1995. Since 1990, Mr. Buchanan has been the President of
Delta Play Ltd., a Canadian corporation, which manufactures children's play
equipment, including the soft sculptured modular foam play mazes used by the
Company.
The directors of the Company are elected annually by the shareholders
and the officers are appointed annually by the board of directors. Vacancies on
the board of directors may be filled by the remaining directors. Each director
and officer will hold office until the next annual meeting of shareholders, or
until his successor is elected and qualifompany or to join with any such company
in acquiring another entity or business.
As permitted under New York Corporation Law, the Company's certificate
of incorporation eliminates the personal liability of the directors to the
Company or any of its shareholders for damages for breaches of their fiduciary
duty as directors. As a result of the inclusion of such provision, shareholders
may be unable to recover damages against directors for actions taken by them
which constitute negligence or gross negligence or that are in violation of
their fiduciary duties. The inclusion of this provision in the Company's
Certificate of Incorporation may reduce the likelihood of derivative litigation
against directors and other types of shareholder litigation.
Board Meetings, Committees and Compensation
During the year ended December 31, 1996, no meetings of the Board of
Directors were held and action was taken on four (4) occasions by unanimous
written consent of the Board of Directors in lieu of meeting. The Corporation
does not pays its directors for their attendance at meetings of the board of
Directors and committee meetings.
The Board of Directors recommends that you vote "FOR" the nominees for
Director.
<PAGE>
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION AND RELATED MATTERS
Executive Compensation
Summary Compensation Table
Annual Compensation
(a) (b) (c) (d) (e)
Name and Principal Year Ended Other
Annual
Position 12/31 Salary($) Bonus($)
Compensation
<S> <C> <C> <C> <C>
Daniel Catalfumo 1995 $ 75,489 -0- -0-
President and Director 1994 15,235 -0- -0-
Richard Rosso 1995 $ 86,553 -0- -0-
Secretary, Treasurer 1994 15,235 -0- -0-
and Director
</TABLE>
Employment and Consulting Agreements
In April 1995, the Company entered into employment agreements with both
of its officers, Daniel Catalfumo and Richard Rosso. Such officers are presently
full-time and pursuant to the terms of their agreements shall receive
compensation at a rate of $100,000 annually, with 10% yearly escalations during
the term of the agreement. The agreements are for a term of five years expiring
April 2000. Pursuant to the terms of the agreements each employee is to receive
a yearly bonus equal to five percent (5%) of the first $200,000 (only after
reaching $100,000), seven and one-half percent (7 1/2%) for all amounts between
$200,000 and $400,000 and ten percent (10%) of all amounts over $400,000, of the
after-tax profit of the Company.
In March 1995, the Company entered into a two-year consulting agreement
with two individuals for the purpose of managing, designing and teaching the
toddler classes and programs. Pursuant to the terms of the agreement, the
consultants jointly receive 25% of the net profit received from the operation of
such classes.
In December 1995, the Company entered into a two-year consulting
agreement with Dan Buchanan to become a member of the Company's Board of
Directors and to provide the Company with consulting services in locating and
designing additional Fun Bubble facilities and with respect to informing the
Company as to changes and innovations in the children's entertainment industry.
Pursuant to the terms of the consulting agreement, the Company issued
<PAGE>
15,000 restricted shares of Common Stock to the consultant under its Senior
Management Incentive Plan. The consultant and Company entered into a restrictive
share agreement whereby 3,750 shares vested 30 days from grant and 3,750 shares
vest six months from the execution of the agreement and each six month period
thereafter until the shares are fully vested. Pending the vesting of these
shares, the Company's counsel shall hold such shares in escrow.
Senior Management Incentive Plan
In February 1995, the board of directors adopted the Senior Management
Incentive Plan (the "Management Plan"), which was adopted by shareholder
consent. The Management Plan provides for the issuance of up to 150,000 shares
of the Company's Common Stock in connection with the issuance of stock options
and other stock purchase rights to executive officers and other key employees.
The adoption of the Management Plan was prompted by its desire to
provide the board with sufficient flexibility regarding the forms of incentive
compensation which the Company will have at its disposal in rewarding executive
officers, key employees and consultants who render significant services to the
Company. The board of directors intends to offer key personnel equity ownership
in the Company through the grant of stock options and other rights pursuant to
the Management Plan to enable the Company to attract and retain qualified
personnel without unnecessarily depleting the Company's cash reserves. The
Management Plan is designed to augment the Company's existing compensation
programs and is intended to enable the Company to oonsultants a personal
interest in the Company's growth and success through awards of either shares of
Common Stock or rights to acquire shares of Common Stock.
The Management Plan is intended to attract and retain key executive
management personnel whose performance is expected to have a substantial impact
on the Company's long-term profit and growth potential by encouraging and
assisting those persons to acquire equity in the Company. It is contemplated
that only those executive management employees (generally the Chairman of the
Board, Vice-Chairman, Chief Executive Officer, Chief Operating Officer,
President, and Vice-Presidents of the Company) who perform services of special
importance to the Company will be additional management employees and has not
engaged in any solicitations or negotiations with respect to the hiring of any
management employees. As of the date of this Prospectus, the Company's officers
and directors are Daniel Catalfumo, Richard Rosso and Dan Buchanan. A total of
150,000 shares of Common Stock have been reserved for issuance under the
Management Plan. Pursuant to the terms of his consulting agreement, Dan Buchanan
received 15,000 restricted shares under the Management Plan, which shares vest
pursuant to a two year vesting schedule, currently 3,750 have vested. In
December 1996 the Company granted to each of Daniel Catalfumo and Richard Rosso
options to purchase 5,000 shares at the then current market price. It is
anticipated that awards made under the Management Plan will be subject to
three-year vesting periods, although the vesting periods are subject to the
discretion of the Administrator.
<PAGE>
Unless otherwise indicated, the Management Plan is to be administered
by the Board of Directors or a committee of the Board, if one is appointed for
this purpose (the Board or such committee, as the case may be, shall be referred
to in the following description as the "Administrator"). Subject to the specific
provisions of the Management Plan, the Administrator will have the discretion to
determine the recipients of the awards, the nature of the awards to be granted,
the dates such awards will be granted, the terms and conditions of awards and
the interpretation of the Management Plan, except that any award granted to any
employee of the Company who is also a director of the Company shall also be
subject, in the event the persons serving as members of the Administrator of
such plan at the time such award is proposed to be granted do not satisfy the
requirements regarding the participation of "disinterested persons" set forth in
Rule 16b-3 ("Rule 16b-3") promulgated under the Exchange Act, to the approval of
an auxiliary committee consisting of not less than two individuals who are
considered "disinterested persons" as defined under Rule 16b-3. As of the date
hereof, the Company has not yet determined who will serve on such auxiliary
committee, if one is required. The Management Plan generally provides that,
unless the Administrator determines otherwise, each option or right granted
under a plan shall become exercisable in full upon certain "change of control"
events as described in the Management Plan, or subject to any right or option
granted under the Management Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Administrator will make
appropriate adjustments to such plans and the classes, number of shares and
price per share of stock subject to outstanding rights or options. Generally,
the Management Plan may be amended by action of the Board of Directors, except
that any amendment which would increase the total number of shares subject to
such plan, extend the duration of such plan, materially increase the benefits
accruing to participants under such plan, or would change the category of
persons who can be eligible for awards under such plan must be approved by
affirmative vote of a majority of shareholders entitled to vote. The Management
Plan permits awards to be made thereunder until November, 2004.
Directors who are not otherwise employed by the Company will not be
eligible for participation in the Management Plan. The Management Plan provides
for four types of awards: stocks options, incentive stock rights, stock
appreciation rights (including limited stock appreciation rights) and restricted
stock purchase agreements, as described below.
Certain Relationships and Related Transactions
The Company was incorporated in the State of New York on April 19, 1993
and filed an amendment to its Certificate of Incorporation changing its
authorized capital and providing for a 19,000-to-1 stock split, in May 1995.
In November 1993, the Company loaned $2,500 to Richard Rosso, which
loan accrued interest at 6% per annum. The loan was evidenced by a note issued
by Mr. Rosso to the Company. The principal amount and accrued interest on the
loan was repaid in November, 1994.
<PAGE>
In August 1994, the Company sold in a private placement 3,800,000
shares of its Common Stock for stock subscriptions of $886,902, of which
$295,900 of the proceeds were received between May 1993 and March 31, 1994 and
the balance was received between April 1994 and April 30, 1995. This offering
was made by the Officers and directors of the Company to family members,
relatives and friends. Daniel Catalfumo and Richard Rosso each purchased 722,000
shares in said private placement. $13,300 of the subscription price for the
shares purchased by Daniel Catalfumo was paid in the form of tile work provided
to the Staten Island Fun Bubble by Professional Tile Contracting Co., a company
wholly owned by Mr. Catalfumo. As partial payment for the shares purchased by
Daniel Catalfumo and Richard Rosso, was the issuance of a promissory note in the
amount of $50,000 to Delta Play Ltd., for the purchase of play equipment, which
equipment is used in the Staten Island Fun Bubble.
In purchasing the play maze from Delta Play, Ltd., the officers of the
Company personally executed a $50,000 promissory note and the Company paid
$80,000 in cash and had a leasing company purchase the balance of the equipment.
The Company executed a capital lease with Manufacturer's Lease Company for
$75,000, which lease is guaranteed by the Company's officers. Dan Buchanan, a
director of the Company is the president and principal shareholder of Delta Play
Ltd. The note executed by the officers accrues interest at 10% per annum.
Principal and interest are payable in 24 equal monthly payments of $2,307.25
commencing October 15, 1994.
Payments under this note are current.
In addition to the personal note executed, the Company paid $80,000 to
Delta Play Ltd., and entered into a lease agreement with Manufacturer's Lease
Company. Messrs Catalfumo and Rosso personally guaranteed the payment of the
lease. The lease is for a term of 60 months,
commencing September, 1994 at a cost of $2,079.05 per month. The perest at
22.18% per annum. Upon the payment of the lease in full, the Company will have
an option to purchase the equipment upon the payment of $1.00.
In November 1994 and December 1994, the Company issued promissory notes
of $25,000 and $8,300 to Joseph Rosso and Frank Catalfumo, respectively. The
notes accrued interest at the rate of 18% per annum. The notes and accrued
interest were repaid in August 1995. The proceeds of the loans were utilized for
working capital.
In February 1995, the Company advanced $3,000 to each of Messrs.
Catalfumo and Rosso, the Company's officers, which advances were repaid during
July 1995 and December 1995. The advances accrued interest at a rate of 6% per
annum.
In March 1995, the Company issued 50,000 shares of Common Stock to
Lampert & Lampert the Company's prior counsel in lieu of legal fees and expenses
aggregating $500.
In May 1995, but prior to the 19,000-to-1 stock split, the Selling
Shareholders returned to the Company's treasury an aggregate of 1,767,000 or 75%
of the shares of Common Stock owned by such Shareholders, on a pro-rata basis,
whereby they retained an aggregate of 589,000 shares of Common Stock. As
compensation for the return of their shares of Common Stock, the Selling
Shareholders received "piggyback" registration rights. At the same time, each
officer
<PAGE>
returned 361,000 shares of Common Stock to the Company's treasury, for no
remuneration or compensation. In connection with the return of a portion of
their shares of Common Stock held by the Selling Shareholders, the Company
recorded a compensation charge of $229,500, which charge was based on the
increase in percentage ownership of the Company received by the officers.
In July 1995, the Company issued a promissory note of $6,500 to Daniel
Catalfumo, which accrued interest at the rate of 18% per annum. During this
period, Daniel Catalfumo advanced an additional $5,000 to the Company, which
advance did not accrue interest. In addition, the Company issued notes in the
amount of $6,500 and $17,000 to Sal Catalfumo and Frank Catalfumo, respectively,
which notes accrued interest at the rate of 18% per annum. All of these notes
and the advance from Daniel Catalfumo were repaid in August 1995. The proceeds
of the loans were utilized for working capital.
In December 1995, the Company entered into a two-year consulting
agreement with Dan Buchanan to become a member of the Company's Board of
Directors and to provide the Company with consulting services in locating and
designing additional Fun Bubble facilities, and with respect to informing the
Company as to changes and innovations in the children's entertainment industry.
Pursuant to the terms of the consulting agreement, the Company issued 15,000
restricted shares of Common Stock to the consultant under its Senior Management
Incentive Plan. The consultant and Company entered into a restrictive share
agreement whereby 3,750 shares vested 30 days from grant and 3,750 shares vest
six months from the execution of the agreement and each six month period
thereafter until the shares are fully vested. Pending the vesting of these
shares, the Company's counsel shall hold such shares in escrow.
The Company issued three promissory notes in the aggregate amount of
$200,000, two notes in the aggregate principal amount of $100,000 in January
1996 and one note in the principal amount of $100,000 in February, 1996, to
unaffiliated parties, bearing interest at 18% per annum. The principal amount of
each note was payable together with accrued interest, on the earlier of July 1,
1997 and the consummation of an initial public offering of the Company's
securities, which was repaid upon the closing of the Company's initial public
offering. Initially the notes matured on the earlier of six months from issuance
and the consummation of an initial public offering of the Company's securities.
The Company requested that holders of the notes amend the term of maturity of
the notes to the earlier of July 1997 and the consummation of an initial public
offering. The two notes issued in January 1996 were personally guaranteed by the
Company's officers.
For information on the Company's employment agreements, see "Employment and
Consulting Agreements."
II. REVERSE-STOCK SPLIT
Management of the Corporation is of the opinion that a reverse-spilt of
the Corporation's stock 1 for 3 (1 new share for every 3 old shares) is in the
best interests of the Corporation's
<PAGE>
shareholders. All fractional shares will be rounded up or down to the
nearest whole shares. No cash will be paid for any fractions of shares.
Currently, the Corporation's Common Stock is quoted on the Nasdaq
SmallCap Stock Market ("Nasdaq"). The Corporation has recently received notice
from Nasdaq that the bid price of the Corporation's Common Stock has traded
below the minimum bid price of $1.00 for over ten consecutive days, thus
subjecting the Corporation to possible de-listing. In order to continue to have
its Common Stock listed on Nasdaq, the Corporation is required to maintain (i)
total assets of at least $2,000,000, (ii) total stockholders' equity of
$1,000,000, (iii) a minimum bid price of $1.00, (iv) one market maker, (v) 300
stockholders, (vi) at least 100,000 shares in the public float and (vii) a
minimum market value for the public float of $200,000. In the event the
Corporation's Common Stock is delisted from the Nasdaq, trading, if any, of the
Corporation's securities would thereafter be conducted in the over-the-counter
market on the OTC Bulletin Board. Consequently, an investor may find it less
liquid, therefore being more difficult to dispose of, or to obtain accurate
quotations as to the price of the Company's securities.
At present, the bid price of the Corporation's Common Stock is below
$1.00. The proposed reverse-split is necessary to keep the Corporation in
compliance with Nasdaq's continued listing requirements. Management believes
that a reverse-split of the Corporation's stock is the best strategy to keep the
Corporation in compliance with the continued listing requirements of the Nasdaq
SmallCap Market.
The reverse-split will be effected by an amendment to the Corporation's
Certificate of Incorporation whereby the Corporation will reduce its present
issued and outstanding shares from 2,676,000 shares to 892,000 shares. The
record date for purposes of calculating the reverse-split will be April __,
1997, and the effective date of the reverse-split will be the commencement of
business the day after the Amendment to the Corporation's Amendment to its
Certificate of Incorporation is filed.
FINANCIAL INFORMATION
A COPY OF THE CORPORATION'S ANNUAL REPORTS ON FORM 10-KSB FOR THE
FISCAL YEAR ENDED MARCH 31, 1996 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION WILL BE FURNISHED WITHOUT THE ACCOMPANYING EXHIBITS TO STOCKHOLDERS
WITHOUT CHARGE UPON WRITTEN REQUEST THEREFOR SENT TO ALLEAN GOODE, SECRETARY,
FUN TYME CONCEPTS, INC., 448 WEST 16TH STREET, NEW YORK, NY 10011. EACH SUCH
REQUEST MUST SET FORTH A GOOD FAITH REPRESENTATION THAT AS OF MARCH 21, 1997 THE
PERSON MAKING THE REQUEST WAS THE BENEFICIAL OWNER OF COMMON SHARES OF THE
CORPORATION ENTITLED TO VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS.
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III. OTHER BUSINESS
As of the date of this proxy statement, the only business which the
Board of Directors intends to present, and knows that others will present, at
the Annual Meeting is that herein above set forth. If any other matter or
matters are properly brought before the Annual Meeting, or any adjournments
thereof, it is the intention of the persons named in the accompanying form of
proxy to vote the proxy on such matters in accordance with their judgment.
Stockholder Proposals
Proposals of stockholders intended to be presented at the
Corporation's 1997 Annual Meeting of Stockholders must be received by the
Corporation on or prior to __________, 1997 to be eligible for inclusion in the
Corporation's proxy statement and form of proxy to be used in connection with
the 1997 Annual Meeting of Stockholders.
By Order of the Board of Directors,
Richard Rosso
Secretary
April 1, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE
COMPLETE AND RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF IT IS MAILED IN THE UNITED
STATES OF AMERICA.
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