-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QCBsJbbJ8Ejv6htoEjkKG/PbSq2dclRDHM2BY0kWlG8ZZlkLnbZgqtMD9X5Wpb3i o+x2lfdm/nwvzUHxAYy5FA== 0000950147-96-000161.txt : 19960509 0000950147-96-000161.hdr.sgml : 19960509 ACCESSION NUMBER: 0000950147-96-000161 CONFORMED SUBMISSION TYPE: 10KSB40 PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960508 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LITTLE PRINCE PRODUCTIONS LTD CENTRAL INDEX KEY: 0000318958 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE DEALERS (FOR THEIR OWN ACCOUNT) [6532] IRS NUMBER: 133045713 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB40 SEC ACT: 1934 Act SEC FILE NUMBER: 000-09455 FILM NUMBER: 96557940 BUSINESS ADDRESS: STREET 1: 555 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2129861110 MAIL ADDRESS: STREET 1: 38 SOUTH AUDLEY STREET STREET 2: MAYFAIR LONDON ENGLAND W1Y 5DH 10KSB40 1 FORM 10KSB40 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 10-KSB [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1995 Commission File Number 0-9455 LITTLE PRINCE PRODUCTIONS, LTD. (Name of small business issuer in its charter)
New York 13-3045713 - ------------------------------------------------------------- ------------------------------------ (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
38 South Audley Street Mayfair, London, England W1Y 5DH - --------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code: (4471) 629-7617 40 Lowndes Street, Belgravia, London, England -------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common stock, $.01 par value ---------------------------- (Title of Class) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X] Issuer's revenues for the year ended December 31, 1995 $(20,799). The aggregate market value of voting stock held by nonaffiliates of the Registrant as of March 31, 1996 was -0-. The number of shares of the Registrant's $.01 par value common stock outstanding as of March 31, 1996 was 24,999,236. DOCUMENTS INCORPORATED BY REFERENCE None PART I ITEM 1. DESCRIPTION OF BUSINESS General Little Prince Productions, Ltd. (the "Company" or the "Registrant") was originally formed to exploit certain ancillary and subsidiary rights to the literary work entitled "The Little Prince." Subsequent to its organization the Company has changed its business focus. The Company's current focus is on acquiring service or manufacturing businesses, as well as developing, selling, leasing and managing real estate in the United Kingdom, the United States and other foreign countries. In 1995 the Company was inactive except for administrative activities in connection with the preparation and filing of the periodic reports required under Section 13 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and in preparing the proxy statement for a Special Meeting of Shareholders that was held on February 29, 1996 (the "Meeting"). Developments Subsequent to December 31, 1995 At the Meeting the Company's shareholders by an affirmative vote of approximately 76% of the total shares outstanding adopted the following proposals: (i) change the Company's state of incorporation from New York to Colorado by means of a merger (the "Merger") of the Company into Atlantic Industries, Inc. ("Atlantic"), a Colorado corporation organized on January 31, 1996, which is wholly owned by the Company ("Proposal 1"); (ii) approve the terms of the merger agreement which provided for, among other things, a 10 for 1 reverse stock split and an increase in the number of authorized shares of the Company to 50,000,000 ("Proposal 2"); (iii) consented to and authorized the Company's Board of Directors (the "Board"), at the Board's discretion, to (a) sell the Company's interest in the common stock of its wholly owned subsidiary, LPPL Corp., to an independent third-party ("Proposal 3") or (b) to vote to dissolve LPPL Corp ("Proposal 4"). Proposals 1 through 4 are referred to herein as the "Proposals." The number of votes cast for, against or that abstained from each Proposal is set forth below: Description For Against Abstain ----------- --- ------- ------- Proposal 1 19,036,766 124,350 160 Proposal 2 19,036,766 124,350 160 Proposal 3 19,036,766 124,350 160 Proposal 4 19,036,666 124,450 160 To date, the Company has not consummated the Merger as it is presently waiting for the consent of the New York Commissioner of Taxation and Finance, which consent is required in order to file the Certificate of Merger with the Secretary of State of the State of New York,. By operation of law, at the effective date of the Merger, all assets, property, rights, liabilities and obligations of the Company will be transferred to and assumed by Atlantic. The principal effect of the Merger will be to (i) change the law applicable to the Company's corporate affairs from the New York Business Corporation Law to the Colorado Business Corporation Act, (ii) reduce the number of shares of the Company's $.01 par value common stock (the "Shares" or the "Common Stock") issued and outstanding, and (iii) increase the number of Shares authorized for issuance. Specifically, at the effective date of the Merger, the Company will be authorized to issue 50,000,000 shares of capital stock ("Atlantic Capital Stock" or "Atlantic Shares") of which 40,000,000 shares are reserved for issuance as common stock ("Atlantic Common Stock") and 10,000,000 shares are reserved for issuance as preferred stock ("Atlantic Preferred Stock"). The Board has entered into preliminary negotiations with an independent third-party for the purchase of all of the outstanding shares of common stock of LPPL Corp. Organization and History of Operations Original Theatrical Operations. Registrant was incorporated on April 3, 1980 pursuant to the laws of the State of New York for the purpose of exploiting certain ancillary and subsidiary rights to the literary work entitled "The Little Prince" by Antoine de Saint-Exupery (the "Work") and to engage in various other aspects of the theatrical production business. A. Joseph Tandet acquired the worldwide stage, television, radio, recording, motion picture, commercial and merchandising rights to the Work on July 9, 1965. All of the foregoing rights were assigned to the Company by Mr. Tandet in 1980. The Company believes that it holds the exclusive right to produce theatrical presentations based upon the Work in the U.S. and in Canada in the English language as well as the non-exclusive right to produce theatrical presentations in Canada in the French language. However, its claims to such rights are presently being disputed by two independent theatrical producers, John Scoullar and Rick Cummins and the Company has instituted litigation with respect to such dispute. See "LEGAL PROCEEDINGS-Scoullar and Cummins Matter." Past Events. On December 31, 1992, LPPL Corp. authorized Theatreworks USA Corp. ("Theatreworks"), a New York stage production company which produces plays for family audiences, to produce a new musical stage production based upon the Work and geared specifically for a juvenile audience. LPPL Corp. was paid $5,000 as an advance against two percent (2%) of all gross revenues derived by Theatreworks from the production. To date, revenues generated therefrom have not yet entitled LPPL Corp. to royalties in an amount equal to the $5,000 already advanced. On December 1, 1992, the Company also authorized two independent theatrical producers, John Scoullar and Rick Cummins, to produce another new musical stage production based upon the Work, in New York by December 31, 1993, geared for an adult audience (the "Scoullar Cummins Production"). The Scoullar/Cummins production opened on October 17, 1993 at the 28th Street Theater in New York City and ran through December 1993. During the fiscal year ended December 31, 1993, LPPL Corp. derived gross revenues from the this production in the amount of $2,000 by way of an advance payment against royalties. No further royalties have been paid to date. As a result of the foregoing, Messrs. Scoullar and Cummins claim to have obtained LPPL Corp.'s right to produce theatrical presentations of the Work in the United States and Canada. LPPL Corp. has instituted litigation to reform the agreement upon which Scoullar and Cummins base such claim. See "LEGAL PROCEEDINGS-Scoullar and Cummins Matter." Litigation with Gallimard and the Saint-Exupery Family. On February 6, 1992, the Company entered into an agreement with Gallimard and the Saint-Exupery family in settlement of litigation brought by Gallimard and the Saint-Exupery family against the Company in 1990. The settlement agreement provided, among other things, for the preservation of certain television production rights to the Work held by Pontaccio S.P.A. an Italian television production company ("Pontaccio"), payment to the Company of an aggregate amount of $200,000 (the "Settlement Fee") in six payments, a royalty to the Company of three percent (3%) of gross revenues derived from the proposed Pontaccio television production, and the Company's relinquishment of all of its rights to the Work except for the following: (a) the exclusive right to produce theatrical presentations of the Work in the United States of America and in Canada in the English language; and (b) the non-exclusive right to produce theatrical representations of the Work in Canada in the French language subject to the prior authorization of Gallimard. Pontaccio paid the final portion of the $200,000 Settlement Fee in 1994. In addition, Pontaccio remains obligated to pay LPPL Corp. a 3% television production royalty in the event that it mounts a television production of the Work. Plans for such a production currently include a budget of approximately $6,000,000. However, the Company is unable to state whether, if ever, such a production will be mounted. To date, Pontaccio has not generated any revenues from such proposed television production, and no royalty payments have been made to LPPL Corp. The Boys Next Door. In November 1987, in a joint venture with Duet Productions Inc., the Company produced an off-Broadway stage production of "The Boys Next Door" by Tom Griffen. The production was a clear critical, but not a financial, success. The production did however run for more than 70 performances in New York, as a result of which, the Company became entitled to certain subsidiary rights to subsequent performances of the production. There is no assurance that significant additional revenue, if any, will be earned by LPPL Corp. in connection with this property. The Company has entered into other licensing agreements with third-parties for which it does not expect to derive any future revenue. Reverse Acquisition-Tyne River Properties. On November 16, 1992 (the "Acquisition Date"), Registrant acquired and became the successor to Tyne River Properties, plc, an English company ("TRP") through a "Reverse Acquisition" pursuant to which the shareholders of TRP acquired an aggregate of 11,899,236 shares of Common Stock (the "Acquisition Shares"), comprising, upon issuance, approximately 85% of the issued and outstanding Common Stock, in exchange for all of the issued and outstanding capital stock of TRP. As a part of the Reverse Acquisition on November 16, 1992, Registrant's theatrical operations and assets were transferred and assigned to its wholly owned subsidiary, LPPL Corp. to be continued therein under the direction of A. Joseph Tandet. At this time (i) Mr. Tandet resigned his position as President of the Company and was appointed President of LPPL Corp., and (ii) Peter N. Chapman was appointed as an executive officer and Director of LPPL Corp. As a further consequence of the Reverse Acquisition, on February 4, 1993 Registrant changed its fiscal year end from March 31 to December 31 to coincide with the fiscal year end of TRP. Overview. Following the Acquisition Date, Registrant's business activities were intended to be conducted in three separate segments, with TRP's proposed real estate acquisition and investment operations constituting Registrant's principal business and the theatrical production operations of the Company constituting a smaller, but continuing area of operations. Certain real estate development projects and operations, owned and conducted by TRP at the Acquisition Date were intended to constitute a third segment which was to be phased out as promptly as practicable through the completion and/or disposition of all such projects. Through and until March 29, 1994 Registrant conducted or attempted to initiate operations in these three segments, in accordance with such intentions by: (a) attempting to obtain financing, through public or private sales of its equity securities, for its proposed real estate acquisition and investment business; (b) endeavoring to complete and/or dispose of its real estate development projects on favorable terms; and (c) continuing its operations in the field of theatrical production through LPPL Corp. Ultimately, however, Registrant was unable to raise any financing with which to commence its proposed real estate investment business. In addition, Registrant was forced by unforeseen circumstances to divest itself of all of its real estate development projects, and to enter into certain transactions, referred to below as a "Second Reorganization" which involved the issuance of a major block of stock to Riparian Securities, Ltd. ("RSL") and a change in the management of the Company. Discontinued Real Estate Development Projects-Sale of TRP. TRP was, from its inception in 1987 through March 29, 1994, engaged in the acquisition and development of property in the Newcastle-Upon-Tyne area in England. It conducted its business directly and indirectly through its operating subsidiaries, Exchange Buildings Limited ("EBL"), Pandon Developments Limited ("PDL"), and Selective Construction plc ("SCP"). Its development sites included the Pandon and Exchange building sites in central Newcastle-Upon-Tyne and a parcel of land adjacent to a car assembly plant approximately five miles south of Newcastle-Upon-Tyne. Towards the end of 1993, TRP began to encounter severe cash flow problems which accelerated from that point in a swift and unanticipated manner leaving TRP insolvent by early 1994. This was a result of a number of circumstances including, but not limited to, one of the most severe economic recessions experienced in the UK since World War II. Through most of 1993, however, TRP's management continued to believe that economic conditions would improve. This was not the case, and the property market generally continued to be adversely affected. During 1993, based upon management's belief that economic conditions would improve, TRP continued to move forward on its real estate development projects. One of such projects, the Exchange Building, is a listed (historical landmark), 150 year-old, 5-story brick building, was a major piece of real estate which TRP's management believed had enormous potential for development. Substantial expenditures had been made on the Exchange Building project prior to 1993, but considerable additional expenditures would have been required to bring this project to its full economic potential. Work on the Exchange Building had began in 1990 and before the end of 1992, TRP had obtained all permits required for the renovation of the property into 75,000 square feet of commercial office space. By the end of 1993, TRP had completed the complex legal and commercial negotiations which had been required to remove all of tenants from the building. This project was funded for over four years by Barclays Bank, which continued to extend credit to TRP until December of 1993. During 1993, however, TRP had begun to encounter severe cash flow problems which made it increasingly difficult to service the Barclays Bank debt. TRP's cash flow problems were caused and exacerbated by a number of factors. First, the economic recession cut badly into TRP's ability to reach projected sales goals for apartments which had been completed in another development project, "Pandon Development." The disappointing sales at the Pandon Development were the direct result of the downturn in the real estate market which had resulted from the economic recession noted above. Cash flow problems were further compounded by the drain on TRP's limited cash resources caused by the necessity to pay substantial settlement fees in order to get tenants to vacate the Exchange Building. Further, work on the renovation of that property which, if completed, might have enabled TRP to generate some income, was greatly curtailed, if not stopped entirely, because of TRP's inability to pay the contractors and professionals who would have been retained for such purposes. Moreover, because of poor general economic conditions in the area, TRP was unable to prelet any space in the planned renovation and was therefore further disabled from obtaining financing for the project. In addition, TRP's income was severely diminished as a result of the cessation of rental revenues which followed the removal of tenants from the Exchange Building. As a result of the foregoing cash flow problems, by early 1994 TRP began actively pursuing the negotiation of a joint venture agreement with terms that would have enabled it to meet its obligations in full. At about the same time, Barclays Bank indicated that they would like repayment of their loan, but that they would be reasonably flexible as to when repayment had to be made, as long as TRP took steps to sell the Exchange Building or make alternate plans to repay the Barclays Bank debt. Management believed that with Barclays Bank remaining flexible as to the time of payment, TRP would be able to realize a reasonable return on the Exchange Building. Plans were made to seek one or more partners for a joint venture which would fund and complete the renovations of the building, allowing TRP to at least share in the revenues to be derived from the completed project. Also at the same time, Vaux Breweries ("Vaux"), a former tenant in the Exchange Building, demanded payment of a (pound)35,000 settlement fee from TRP. This liability had arisen out of a settlement agreement which TRP had entered into for the purpose of getting Vaux to agree to vacate its facilities in the Exchange Building. Barclays Bank rejected TRP's request for a loan of (pound)35,000 to pay this liability. Thereupon TRP's management engaged in negotiations with Vaux aimed at getting Vaux to agree to delay payment until TRP was able to liquidate the Exchange Building on favorable terms. Vaux refused to agree to such delay and, instead, issued a petition to the Court to dissolve Exchange Buildings, Limited ("EBL") (the wholly owned subsidiary of TRP which held ownership of the Exchange Building) and liquidate its assets. This step was roughly equivalent to Vaux's bringing a petition for involuntary bankruptcy under Chapter VII of the U.S. Bankruptcy Code. As a direct result of the actions taken by Vaux, Barclays Bank was constrained to demand immediate payment in full of all moneys owned to it by EBL, which at that time equaled (pound)489,000, (or approximately $724,000). Thus, the Vaux petition effectively made it impossible for TRP to negotiate either a joint venture agreement for the renovation of the Exchange Building or a sale of the Exchange Building under favorable, or even reasonable, circumstances. It was clear that the combination of the foregoing circumstances was inevitably going to result in a forced sale of the Exchange Building at a price substantially lower than TRP's previous valuation of that property. As a direct result of the foregoing circumstances it was necessary to reduce the value at which the Exchange Building was included in the accounts of Registrant by $970,000 to reflect its much reduced value on the basis of the requirement for a forced sale. This reduction in the asset value of the Exchange Building attributed to TRP having a negative net worth of approximately (pound)199,000 by early 1994. TRP's financial condition was further worsened by a diminishment in the value of its two other development projects, the property known as the Padon Development and a parcel of twenty acres of undeveloped land with one two-story brick farmhouse situated thereon, located near a major highway (the "A19 Property"). With respect to the Padon Development, as noted above, the general downturn in the real estate market throughout the UK made it extremely difficult to sell the apartments into which the Padon Development had been convened. Moreover, because of TRP's overall poor financial condition, it was forced to remit any net proceeds, from such sales as it was able to effect, to creditors. The A19 Property was also revalued downward during fiscal 1993 in the amount of $120,000. This was the direct result of the refusal of a planning permission for a parcel of property adjacent to the A19 Property, owned by unrelated persons. To the best knowledge of TRP's management, it was assured before 1994 that the adjacent property was to be the site of a new football stadium. Unfortunately, however, unexpected opposition to construction of such a facility at that site, from an unrelated party, prevented the issuance of a permit for such purpose. Appeals to the local planning commission were brought by the football club and the final, adverse decision was not handed down until March of 1994. As a result of the foregoing, by March 29, 1994, the value of the A19 Property had been significantly diminished from TRP's original estimate thereof. Commencing in January of 1994, the Riparian Group (as defined below) had begun to explore the feasibility of acquiring a major stock position in, and management control of, Registrant. They were interested in a publicly traded corporation because they believed it would be an effective vehicle for the effectuation of their proposed business plan. In the interest of such potential affiliation with Registrant, the Riparian Group agreed with TRP, to use its best efforts to protect the Company from the anticipated adverse effects of the dissolution of TRP's subsidiaries, and the liquidation of properties held thereby, under the unfavorable conditions then obtaining. On March 29, 1994, Registrant sold all of the issued and outstanding stock of TRP to Bravecorp Limited ("Bravecorp"), a U.K. company wholly owned by Riparian Investments Limited ("RIL") and formed specifically for the purpose of purchasing TRP for the nominal consideration of (pound)1. RIL is a company affiliated with Riparian Securities Limited ("RSL") through common ownership and management (RIL and RSL, as well as their controlling persons, will sometimes be referred to herein, collectively, as the "Riparian Group"). The events which followed confirmed the expectations of all the parties. Specifically, on April 15, 1994, Barclays Bank, foreclosed on EBL and took legal possession of the Exchange Building. On April 18, 1994, Bravecorp sold EBL to Lacebury Limited, a firm which specializes in dealing with insolvent companies, for a price of (pound)2. On April 26, 1994, Bravecorp sold all of the remaining assets of TRP, except for PDL (and the Pandon Development owned by PDL) to Lacebury Limited for a price of (pound)2. At approximately the same point in time, Bravecorp sold PDL for the same nominal sum to Gracelord Limited ("Gracelord"). Neither Lacebury nor Gracelord is affiliated with Registrant, the Riparian Group, or any affiliate of Registrant or the Riparian Group. In connection with their services in respect of the foregoing transactions and dealing with outstanding creditors and the appointment of company receivers and liquidators, Bravecorp incurred unreimbursed expenses of approximately (pound)3,525 (approximately $5,000). At the time of Bravecorp's purchase of TRP, the Riparian Group was not affiliated with Registrant and all of the foregoing transactions were made at arm's-length. In September of 1994, RSL acquired approximately 25% of issued and outstanding Common Stock by way of new issuances and transfers of shares from certain of Registrant's past and present officers and directors. In connection therewith, certain members of Registrant's management, who were associated with TRP, resigned and in their place, members of RSL's management were appointed as officers and directors of Registrant. See the "RSL Agreement" below. Lack of Working Capital-Second Reorganization. As noted above, after the Reverse Acquisition, Registrant was not able to raise any funds through private or public sales of its securities, or otherwise, TRP was therefore unable to institute its real estate investment business plan and the lack of available working capital resulted in Registrant's overall inability to conduct operations in any of its three proposed business segments during 1993 or subsequently thereto, except on a minimal level. On August 22, 1994, in an effort to improve Registrant's business prospects, Registrant and certain members of its then current management entered into an agreement with RSL. RSL Agreement. On August 22, 1994, Registrant entered into an agreement (the "RSL Agreement") with RSL. RSL is a company incorporated and registered in England (Company No. 2855251). Its registered office is located at 38 South Audley Street, Mayfair, London, W1Y 5DH, England. RSL is engaged in the business of real estate investment and management, principally in the area encompassing London and the Southwest of England. The RSL Agreement principally provided for: (a) a loan by RSL to Registrant of GB(pound)25,000, to be used to satisfy financial, tax and regulatory obligations of Registrant; (b) the sale by Registrant to RSL of 3,250,000 newly issued shares of Common Stock at a price of $.01 per share in conjunction with the sale by Peter N. Chapman and William J. Peacock to RSL of an additional 2,990,402 shares for the nominal price of $.0001 per share; (c) the resignation of four of the five then present directors of Registrant, pursuant to which Terence G. Galgey, William J. Peacock, A. Joseph Tandet, and Carl Kuehner resigned as directors of Registrant, which resignations became effective as of October 1, 1994; (d) the replacement of the resigning directors by two designees of RSL, Adrian P. Kirby and Christopher N.C. Jones, and the reduction in the size of the board from five to three persons; and (e) the resignations of Messrs. Galgey, Peacock, Tandet, and Kuekner as officers of Registrant, which resignations became effective as of October 1, 1994. The closing of the RSL Agreement took place on September 9, 1994. The newly constituted board of directors took office on October 1, 1994, ten days after a Notice to Shareholders, prepared in accordance with Rule 14f-1 of the Securities and Exchange Act of 1934, as amended (the "34 Act") was mailed to Registrant's shareholders. Thereafter, Adrian P. Kirby was appointed as Chairman and Chief Executive Officer of Registrant and Christopher N.C. Jones was appointed as its Executive Vice President. Prior to their taking office, neither Mr. Kirby nor Mr. Jones held any offices, employments, directorships or other affiliations with Registrant. Peter N. Chapman continued to hold the positions of Secretary, Treasurer and a Director of Registrant. On February 15, 1995, Mr. Jones was removed for cause by the remaining members of the board and Robert D. Evans was appointed to fill the vacancies created by Mr. Jones's removal. Proposed Business Plan of RSL. RSL originally entered into the RSL Agreement with the intention of arranging, within six months, for the Company to acquire through the issuance of large blocks of common stock sufficient investment properties and related business activities to enable the Company to satisfy the minimum financial criteria for inclusion in the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ"). Circumstances Resulting in Delay. Upon consummation of the RSL Agreement and related transactions, the Company lacked a sufficient amount of authorized but unissued Shares to acquire suitable investment properties. In order to increase the number of authorized Shares, the Company needed to amend its Certificate of Incorporation, which in turn required holding a shareholders meeting and distributing a proxy statement soliciting the approval of the Company's shareholders owning a majority of the Shares outstanding. In order to distribute the proxy statement, however, the Company first had to prepare and file its past and currently due annual reports on Forms 10-K and quarterly reports on Forms 10-Q with the Securities and Exchange Commission (the "Commission"). During the past year the Company worked on achieving this goal and on preparing the proxy statement for the Meeting held on February 29, 1996. See "BUSINESS OF THE COMPANY-Developments Subsequent to December 31, 1995." The Company's Business Plan The Company has expanded its business plan to encompass the potential acquisition of service or manufacturing businesses, as well as commercial real estate properties for equity in the Company. After the sale or dissolution of LPPL Corp., the Board does not intend to engage in any additional theatrical productions. Upon consummation of the merger, the Company's current acquisition strategy involves the possibility of acquiring, in exchange for Atlantic Capital Stock, existing businesses that management believes will offer the opportunity of sound sustainable earnings with the potential for growth. Such acquisitions may result in the merger of another corporation into the Company in return for Atlantic Common Stock. See "PROPERTIES" for a description of the Company's investment strategies. Competition Real Estate Business. Management believes that Registrant may face competition for the most attractive real estate investment opportunities from other investors who are aware of the opportunities available at this time to purchase properties at significantly deflated prices. Other investors, some of whom may have greater resources than Registrant, are in the market for real estate investment and present intense competition perforce of their being considerably better established and larger than Registrant in total assets and resources. There cannot be any assurance that Registrant will, in fact, be able to raise equity capital on terms favorable to it or at times necessary to enable it to take advantage of attractive real estate investment opportunities against potential competitors. Theatrical Production Business. The entertainment industry in general, and the production of stage productions on or off-Broadway or in Regional or other theaters in particular, is extremely speculative. Only a small percentage of theatrical productions ever make a profit. Revenues from the Company's theatrical production business are dependent on a variety of factors over which it has no control, including critical and consumer reaction, competition from other productions and the advertising and publicity which the Company and parties external to the Company, such as theatrical reviews, etc. provide for the Company's productions. Audience appeal depends, among other things, upon unpredictable critical reviews and changeable public tastes, factors which cannot be reliably ascertained in advance and over which the Company has no control. The Company's principal competitive disadvantage in this field has been, and continues to be, its extremely limited capital resources. The Company's shareholders have approved proposals granting the Board the authority to either sell the common stock of LPPL Corp. to an independent third party or vote to dissolve LPPL Corp. Upon the sale or dissolution of LPPL Corp., the Board does not intend to engage in the theatrical production business. Personnel During the fiscal year ended December 31, 1995, Registrant had no employees other than its officers and directors. ITEM 2. PROPERTIES The executive offices of Registrant have been maintained at the headquarters of the Riparian Group at 38 South Audley Street, Mayfair, London, W1Y 5DH, England. Registrant has no formal lease or agreement with respect to its office facilities and pays no rent or other remuneration for their use. LPPL Corp. maintains its headquarters at the office of its president, Mr. A. Joseph Tandet, at 555 Fifth Avenue, New York, NY 10017. Mr. Tandet receives no remuneration from LPPL Corp. or Registrant for the use of this facility or for the clerical and other incidental services provided to LPPL Corp. by Mr. Tandet. Nature of Investments/Investment Strategy Upon consummation of the Merger, the Company does not intend to seek investments that involve a high degree of dependence on specialized skills or market conditions or which will be at risk from rapid changes in market conditions or from technological change. All potential acquisitions will be analyzed in depth by the executive officers of the Company and approved by the Board. Advice from independent advisors will be sought as deemed appropriate by the executive officers. In evaluating potential investments, the Company will consider, among other factors: (a) the current anticipated cash flows and their ability to meet operational needs and provide a competitive market return on the equity invested; (b) the potential for capital appreciation; (c) the geographical area and location of the business and/or property (which businesses or properties may be located in the United Kingdom, the United States or elsewhere); (d) the ability to increase cash flow through a capable management; (e) the capability of existing management; (f) the market positions and relative strengths of the business related to its competitors; (g) the general economic growth and tax and regulatory environment of the communities in which the business operates; and (h) the prospects for liquidity, through sale, financing or refinancing. The Company further intends to keep debt to conservative levels relative to equity with regard to both mature investments and new acquisitions. The Company also may raise funds by selling Atlantic Common Stock in public or private transactions. The Company's shareholders do not and will not have any preemptive rights with respect to any such issues of Atlantic Common Stock. Moreover, there can be no assurance that the Company will be able to raise any funds through the sale of Atlantic Common Stock. In accordance with their fiduciary duties to the Company and its shareholders, the Board may determine that a change from the Company's current investment strategies and policies is in the best interest of the Company and its shareholders and shareholder approval will not be necessary for a change in the Company's investment policies. Although the Company currently does not anticipate such a change, should the Board deem it advisable, changes will be made. Alternative methods of financing, which could be adopted by the Board in the future, could include the issuance, in public or private transactions, of up to 10,000,000 shares of Atlantic Preferred Stock in addition to short, intermediate or long-term borrowings, on secured or unsecured basis. Such borrowings could be in the form of bank borrowings, including unsecured borrowings or borrowings secured on the Company's then existing assets and/or assets being acquired with borrowed funds. Borrowings could also be made by the Company by way of the issuance of senior or subordinated notes or debentures, including notes or debentures convertible into shares of Atlantic Common Stock. The Company may also combine any of the above financing methods. ITEM 3. LEGAL PROCEEDINGS Scoullar and Cummins Matter On May 10, 1994, Little Prince Productions, Ltd. commenced an action in the Supreme Court of the State of New York, New York County, entitled Little Prince Productions, Ltd. vs. John Scoullar and Rick Cummins by serving a summons and complaint which demanded reformation of an agreement (The "Scoullar/Cummins Agreement), dated September 30, 1992 by and between Little Prince Productions, Ltd. and two independent theatrical producers, John Scoullar ("Scoullar") and Rick Cummins ("Cummins"). This agreement gave Scoullar and Cummins the right to produce a new musical production based upon the Work. The Company filed the summons and complaint in response to claims by Scoullar and Cummins that the Scoullar/Cummins Agreement grants to them the unqualified right to produce theatrical productions based upon the Work, throughout the United States and Canada, utilizing materials from all sources, including those directly connected to the Work. The Company claims that the rights of Scoullar and Cummins to mount theatrical productions of the Work in the United States and Canada is limited to productions based solely upon their own materials. Defendants filed an answer containing a general denial and a counterclaim requesting declaratory judgment in their favor. Depositions are expected to be taken in April 1995 with a trial expected to follow several months thereafter. The Company considers the claims of Scoullar and Cummins to be spurious. The Company is unable to state at this time, what the outcome of this litigation will be. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS During the fourth quarter of the fiscal year ended December 31, 1995, no matters were submitted to a vote of security holders. The Company, however, did hold the Meeting on February 29, 1996. See "DESCRIPTION OF BUSINESS-Developments Subsequent to December 31, 1995." PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Common Stock is traded in the over-the-counter market under the symbol "LTLP." Because the Company did not meet the revised financial criteria for continued inclusion in the National Association of Securities Dealers' Automated Quotation System ("NASDAQ"), it was delisted therefrom, effective May 27, 1992. Since such date, Registrant's common stock has been quoted on the OTC Bulletin Board, provided however that since April 1, 1994, there has been so little trading activity in Registrant's stock that no bids are shown for the quarters subsequent thereto. The following table sets forth representative high and low closing bid prices by calendar quarters as reported by the National Quotation Bureau and the OTC Bulletin Board from December 31, 1993 through March 31, 1996(2). Bid quotations represent prices between dealers, do not include retail mark-ups, mark-downs or other fees or commissions, and do not necessarily represent actual transactions. Bid Prices -------------------------- Calendar Quarter Ended High Bid Low Bid ---------------------- -------- ------- December 31, 1993 1/8 .01(1) March 31, 1994 3/8 .10(1) June 30, 1994 N/A(2) N/A(2) September 30, 1994 N/A(2) N/A(2) December 31, 1994 N/A(2) N/A(2) March 31, 1995 N/A(2) N/A(2) June 30, 1995 N/A(2) N/A(2) September 30, 1995 N/A(2) N/A(2) December 31, 1995 N/A(2) N/A(2) March 31, 1996 N/A(2) N/A(2) - --------------- (1) As reported by the National Quotation Bureau (2) Management has been advised by the National Association of Securities Dealers, Inc. that no dealer submitted bid prices for registrant's stock from April 1, 1994 through March 31, 1996. As of March 31, 1996, there were 340 record holders of the Common Stock. The Registrant has not declared or paid any form of dividends on the Common Stock during the last two fiscal years and does not contemplate declaring any and paying any dividends on the Common Stock in the near future. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS Overview On November 16, 1992 (the "Acquisition Date") the Company acquired all of the issued and outstanding capital stock of Tyne River Properties plc, a company incorporated in England ("TRP"), from the holders thereof in exchange for eleven million, eight hundred ninety-nine thousand, two hundred thirty-six (11,899,236) newly issued shares of the Common Stock. The scale of this acquisition was such that the activities of TRP formed the major part of the Company's activities until the sale on March 29, 1994. As required by U.S. accounting standards, the financial statements for the years ended December 31, 1993 and December 31, 1994, have been prepared to treat TRP as the parent company with balance sheet data and results of operations of Little Prince Productions included only with effect from the Acquisition Date. All the comparative financial information for periods prior to the Acquisition Date through December 31, 1994 therefore relate solely to TRP and its subsidiaries. The balance sheets also reflect the effects of accounting for the acquisition as a merger (purchase type). Balance sheet amounts originally denominated in United Kingdom sterling have been translated into U.S. dollars using the veer-end rate of exchange. Operational results originally denominated in United Kingdom sterling have been translated into U.S. dollars using the average annual rate of exchange. All business transactions effected by TRP are made in United Kingdom sterling. Fluctuations in foreign exchange rates could have, and in the past have at various times had, either negative or positive impacts on the Company's balance sheet and results of operations. The Consolidated Statement of Shareholders' Equity included in the financial statements, which form a part of this report, shows the impact of changes in the dollar/sterling exchange rate on the value of TRP's assets and results of operations over this and prior periods. Such Statement for the years ended December 31, 1995 and December 31, 1994 show no exchange gain or loss on translation. Results of Operations Generally, the decrease in the Company's net loss from discontinued operations in 1994 resulted from the Company's decision to sell TRP, in part, due to the additional decrease in the value of the A19 Property (a property previously held by TRP). The sale of TRP resulted in a gain of $287,428. Following discontinuance of the real estate development activities, the Company's continuing business comprises its theatrical operations. The results have been restated accordingly. All of this income derives from arrangements whereby the Company receives revenue dependent on the successful staging of theatrical productions. If the theatrical productions are not successful then the Company's revenue is severely reduced. The timing of receipt of the income is also dependent on the timing of staging the theatrical productions and can therefore fluctuate year on year. Whereas income was received during the 2 years ended December 31, 1995 there is no guarantee that income will continue to be received into the future. Revenue is not sensitive to changes in prices nor the effects of inflation. During the fiscal year ended December 31, 1995, management's primary task has been to deal with the preparation and completion of the various financial and regulatory documentation which the Company has been required to file, some of which had been overdue. All filings are now up to date. The majority of the operating costs of $104,947 incurred during the year related specifically to the audit, accounting, secretarial and legal costs associated with the preparation of the aforementioned documentation. Liquidity and Capital Resources Throughout the 2 years ended December 31, 1995 and 1994, albeit without success, the Company sought to raise additional liquidity through the issuance of additional shares of its Common Stock in order to further the property development segment of its business. This business was characterized by large fluctuations in working capital requirements arising from the relatively long duration of projects. In the initial stages, projects would absorb significant cash as properties were under construction. The Company would receive a return on its investment when the completed properties were sold. Given the lack of success in raising funds through the issuance of Common Stock, the Company had to substantially increase its borrowings. On March 29, 1994, the Company disposed of its interest in the share capital of TRP. The effect of this disposal is set out in detail in the Notes to the Financial Statements. On August 22, 1994, the Company reached agreement with its officers and directors and a firm of professional advisors to issue shares of its Common Stock in full and final settlement of any claims they may have had against the Company. A total of 7,750,000 shares of common stock were issued in settlement of liabilities totalling $462,656. On the same day, an additional 3,250,000 shares of common stock were issued for $32,500 to Riparian Securities Limited who, in addition to acquiring the shares in the common stock, had indicated their intention to give short term financial support to the Company throughout the period of reorganization. The combined effect of both of these transactions was to improve the liquidity of the Company by $495,146. In order to reduce outstanding liabilities relating to legal, audit and secretarial services and also to meet the excess of continuing operating costs of the Company over income, including those costs associated with meeting the regulatory requirements of the Company, $10,900 was realized from the sale of investments at book value during 1995. During 1995, Patchouli advanced fund by way of loans to the Company totalling $92,355. The Company had no material commitments for capital expenditure at any of the years ended December 31, 1995 and 1994. Future Liquidity Management does not believe that the Company has the ability to raise adequate resources from its existing revenue operations. The Company is therefore dependent in the short term from continued loans from Patchouli. Upon consummation of the Merger the Company intends to acquire through the issuance of additional shares of Atlantic Capital Stock a suitable business or businesses and/or to obtain additional funds through the sale of Common Stock in public or private transactions. The future liquidity of the Company may also be adversely effected when the Company either sells or dissolves LPPL Corp.-the only current source of revenue for the Company. ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements of the company required by Regulation S-B are attached to this Report. Reference is made to Item 13 below for an index to the financial statements. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT Directors and Executive Officers Directors and Executive Officers During the Year Ended December 31, 1995. The table below sets forth the persons who were the directors and executive officers of Registrant during the year ended December 31, 1995 together with their respective ages, their respective dates of service, the year in which each was first elected or appointed an officer or director, and any other office in Registrant held by each such person. All persons who served as officers of Registrant during this period also served as executive officers.
Officer and Director ------------------------------ Name of Director Other Offices Held Age From To ---------------- ------------------ --- ---- -- Adrian P. Kirby(1) Chief Executive Office, Chairman, President 36 October 1, 1994 Present Peter N. Chapman Treasurer, Secretary 39 November 16, 1992 Present Robert D. Evans Executive Vice President 40 February 15, 1995 Present A. Joseph Tandet President, Director LPPL Corp. 63 November 16, 1992 Present
- --------------- (1) Mr. Kirby took office on October 1, 1994 in connection with RSL's acquisition of approximately 25% of Registrant's issued and outstanding common stock. Messrs. Kirby, Chapman, and Evans, Registrant's current officers and directors, devote such of their time to Registrant's business and affairs as is required for their executive duties and meetings of the board of directors. On average, this requires an expenditure of 36 hours per week on the Registrant's business. Family Relationships No family relationship exists between any director or executive officer of Registrant or person contemplated to become such. Business Experience The following summarizes the present occupation and business experience during the past five years for each person who is currently a director or executive officer of Registrant. No other persons have been nominated or chosen to become directors of Registrant. Adrian P. Kirby has been the President, Chief Executive Officer and Chairman of the Board of Directors of Registrant since October 1, 1994. He was a founder and is a major shareholder of Atlantic Properties, Ltd., and has served as a Director and as Treasurer of such corporation since its inception on February 15, 1995. In 1993, Mr. Kirby founded The Riparian Group, consisting of Riparian Securities, Ltd., Riparian Investments, Ltd. ("RIL"), and Riparian Properties, Ltd. Mr. Kirby is the Chief Executive Officer of all of the constituent corporations of the Riparian Group. In 1984, Mr. Kirby incorporated Guardacre Investments Limited, and subsequently, Guardacre Securities and Guardacre Properties Limited. Collectively, these corporations were known as the "Guardacre Group." From 1984 through November 1993, Mr. Kirby was the Chief Executive Officer of the Guardacre Group. Peter N. Chapman has served as Treasurer, Secretary, and a Director of Registrant from November 16, 1992 through the present. He also served as a Director and the Secretary of TRP from 1986 until March 29, 1994. On April 15, 1994, Barclays Bank foreclosed on Exchange Buildings, Ltd., a principal subsidiary of TRP. Chapman has been employed as a chartered accountant since 1979. He has been self employed since 1990, first independently and subsequently as a partner in Chapman & Chapman, a firm of chartered accountants. From 1988 through January 1990, Mr. Chapman worked for William A. Swales Limited where, commencing in January 1989, he served as Finance Director. Effective November 16, 1992, Mr. Chapman was appointed as an officer and director of LPPL Corp., a wholly owned subsidiary of Registrant. Mr. Chapman was admitted as a Fellow of the Institute of Chartered Accountants in England and Wales in 1979. Robert David Evans has been the Executive Vice President and a Director of Registrant since February 15, 1995. He has also served as the President and a Director of Atlantic Properties, Ltd. since its inception on February 15, 1995. Since 1993, Mr. Evans has been self-employed as a business consultant, assisting with acquisitions and disposals of various business entities and with financing of various projects, principally involving gold, diamonds, and oil properties in Russia. From 1988 through 1992, Mr. Evans was Chairman and Chief Executive Officer and a major shareholder of Enterprise Computer Holdings, Plc ("ECH"). ECH is involved in the marketing of computer hardware and software. A. Joseph Tandet served as President, Treasurer, and a Director of the Company from its inception in April 1980 until November 16, 1992, when he resigned from his positions as President and Treasurer and was appointed Vice President of the Registrant. He served as Vice President and a Director of Registrant until October 1, 1994 when he resigned his positions as required under the terms of the RSL Agreement. Mr. Tandet has been President and a Director of LPPL Corp. since its inception in 1992, and continues to serve as such. For more than the past twenty years, Mr. Tandet has been an attorney practicing in New York City. Mr. Tandet presently serves as Chairman Emeritus of the Manhattan Theater Club, Inc. Compliance with Section 16(a) of the Exchange Act Section 16(a) of the Securities Exchange Act of 1934 and the rules thereunder require the Company's officers and directors, and persons who own more than ten percent of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and with the NASDAQ and to furnish the Company with copies. Based on its review of the copies of the Section 16(a) forms received by it, or written representations from certain reporting persons, the Company believes that, during the last fiscal year, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten-percent beneficial owners were complied with. ITEM 10. EXECUTIVE COMPENSATION Current Remuneration Registrant has no stock option or stock appreciation rights, long term or other incentive compensation plans, deferred compensation plans, stock bonus plans, pension plans, or any other type of compensation plan in place for its executive officers, directors, or other employees and none of its executive officers or directors have ever received compensation of any such types from Registrant pursuant to plans or otherwise. The following table sets forth information concerning the annual compensation received or accrued for services provided in all capacities to Registrant for the years ended December 31, 1995 and 1994 by Registrant's chief executive officer. None of Registrant's executive officers received or accrued annual compensation in excess of $100,000 in any of such years. All of Registrant's current executive officers have agreed to render services to Registrant solely for the purpose of enhancing the value of their shareholdings in Registrant, until such time as Registrant has the financial resources available to compensate such persons for their services. Summary Compensation Table Annual All Other Compensation Compensation ------------ ------------ Fiscal Year Name Position December 31, Salary ---- -------- ------------ ------ Adrian P. Kirby(1) President and 1995 $ -0- $ -0- CEO 1994 $ -0- $ -0- - --------------- (1) Mr. Kirby became president and chief executive officer of Registrant on October 1, 1994. Mr. Kirby has agreed to render his services to Registrant solely for the purpose of enhancing the value of his shareholdings in Registrant until such time as Registrant has the financial resources available to compensate him for his services. Directors Remuneration The directors of Registrant are not compensated for their services as such. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Security Ownership of Certain Beneficial Owners The following table sets forth information with respect to the beneficial share ownership, as of March 31, 1996 of Registrant's common stock, $.01 par value, by each person who is known by Registrant to own beneficially more than 5% of Registrant's common stock. Name and Address Amount and Nature of of Beneficial Owner Beneficial Ownership Percent of Class(3) ------------------- -------------------- ------------------- Patchouli Foundation(1) 6,240,402 25% c/o Von Erlach & Partners Strasse 7, Postfach 4088 8022 Zurich Adrian P. Kirby(2) 6,240,402 25 40 Lowndes Street Belgravia, London SW1X9HX, England Terence G. Galgey(3) 2,250,000 9 Little Lodge Great Bardfield Braintree, Essex CM7 4QB England John L. Milling(3) 1,250,000 5 115 River Road, Bldg. 12 Edgewater, NJ 07020 Frances Katz Levine(3) 1,250,000 5 115 River Road, Bldg. 12 Edgewater, NJ 07020 - --------------- (1) Includes 3,250,000 shares issued to RSL pursuant to the RSL Agreement and an aggregate of additional 2,990,402 shares, transferred to RSL by Messrs. Peacock and Chapman, for the nominal consideration of $.0001 per share. All of such shares were transferred by RSL to the Patchouli Foundation on January 17, 1995. Both RSL and the Patchouli Foundation are under the control of Adrian P. Kirby and such transfer was therefore deemed not to involve a change in beneficial ownership. (2) Includes 6,240,402 shares beneficially owned by the Patchouli Foundation; Mr. Kirby may be deemed to be a beneficial owner of such shares through the investment and voting powers which Mr. Kirby was over such shares through his position as attorney-in-fact for the administrator of the Patchouli Foundation. (3) Issued in September 1994 in partial satisfaction of unpaid fees for legal services rendered and unreimbursed expenses incurred. Security Ownership of Management The following table sets forth information with respect to the share ownership, as of March 31, 1996, of each person who served as an executive officer and/or director of Registrant during the fiscal year ended December 31, 1994, individually and as a group. Name and Address Amount and Nature of of Beneficial Owner Beneficial Ownership Percent of Class(1) ------------------- -------------------- ------------------- Adrian P. Kirby 6,240,402 25.0 All directors and officers as a group 6,565,402 26.3 (3 persons) - --------------- (1) Based upon 24,999,236 shares of common stock, $.01 par value, issued and outstanding as of March 31, 1996. Changes in Control On September 9, 1994, RSL acquired 25% of the issued and outstanding stock of Registrant. On October 1, 1994, changes in the management of Registrant made pursuant to such stock acquisition took effect. See the discussion thereof contained in the subtopic "RSL Agreement" in Item 1 of this Report. Registrant is not aware of any arrangements which may at a subsequent date result in a change in control of Registrant. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Transactions and Business Relationships with Management Settlements with Officers and Directors. Registrant was unable in varying degrees to meet its financial obligations under the service and employment agreements. As a result, Registrant accrued contractual liabilities arising from unpaid salaries and unreimbursed expenses. In connection with the RSL Agreement, Registrant entered into separate settlement agreements with the contracting parties under the respective service and employment agreements. Specifically, Messrs. Galgey, Peacock, Chapman, Tandet and Kuekner entered into separate settlement and release agreements with Registrant whereby they accepted, in full and final settlement of any claims they may have had against Registrant respecting accrued but unpaid compensation and reimbursable expenses, shares of Registrant's common stock, valued at approximately $.06 per share, as follows: Amount of Number of Name Liability Shares Issued ---- --------- ------------- Terence G. Galgey $83,352 1,250,000 William J. Peacock 98,103 1,575,000 Peter N. Chapman 100,648 1,625,000 Carl Kuehner 46,354 800,000 In addition, Registrant agreed to issue 500,000 shares to Mr. Tandet, at such time as Registrant's certificate of incorporation is amended so as to increase its authorized capital stock, in consideration of Mr. Tandet's agreeing to render extensive legal services in connection with certain litigation matters of Registrant and its subsidiary LPPL Corp. Loan From Affiliate. During the year ended December 31, 1995 and the period subsequent thereto, the Patchouli Foundation his made loans to Registrant to cover costs and expenses incurred in connection with various corporate activities, including without limitation, legal, accounting, and filing fees incurred in connection with the preparation of Registrants annual reports on Form's 10-K for the years ended December 31, 1993 and 1994 and the proxy statement for the Special Meeting of Shareholders held on February 29, 1996. As of December 31, 1995 such loans were $92,355. Relationship Between the Company and Atlantic Properties, Ltd. On February 15, 1995, the Company's current officers and directors, founded Atlantic Properties, Ltd., a Delaware corporation, for the purpose of engaging in business of acquiring, developing, re-developing, owning, selling, leasing and managing residential leisure and other types of real estate properties. In consideration of the services rendered and unreimbursed expenses incurred in connection with its organization, Atlantic Properties, Ltd. issued 105,000 shares, constituting approximately 2.5% of its total issued and outstanding common stock to the Company. On March 30, 1995, Atlantic Properties, Ltd. filed a registration statement on Form S-11 with the Securities and Exchange Commission (SEC File No. 33-90790), which was declared effective on November 11, 1995. The 105,000 shares owned by the Company were included therein to be registered under the Securities Act of 1933, as amended, for distribution, on a pro rata basis, to the holders of Company's common stock of record, on a date to be determined, at the rate of one share of common stock for every two hundred thirty-eight (238) shares of the Company's Common Stock, without any Consideration being paid by such shareholders. Notwithstanding the foregoing, any person who holds Shares of the Company as of the initial record date in an amount of less than two hundred thirty-eight (238) will receive one share of Atlantic Properties, Ltd. common stock. PART IV ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K (a) The following documents are filed as part of this Report. Financial Statements. See Index to financial statements on page F-1 of this Report. Exhibits. Exhibits filed as part of this report are as follows (for electronic filing purposes only, this report contains Exhibit 27, Financial Data Schedule): Exhibit No. Description - ----------- ----------- 2.1(1) Offer Document relating to the Recommended Offers by RAS Securities Corp. on behalf of Little Prince Productions, Ltd. to acquire the entire issued share capital of Tyne River Properties plc and Notice of Extraordinary General Meeting of Tyne River Properties plc 2.2(1) Announcement; dated November 16, 1992, by RAS Securities Corp. respecting valid acceptances of the Exchange Offer (mailed to TRP shareholders) 2.2(1) Agreement and Plan of Merger dated February 9, 1996, between Registrant and Atlantic Industries, Inc. 3.1* Certificate of Incorporation, as amended 3.2* Bylaws 4.1* A description of the rights of the Registrant's shareholders is contained in the Certificate of Incorporation, as amended, filed as Exhibit 3.1 and is incorporated herein by reference. 10.1(1) Agreement, dated October 21, 1992, by and among Little Prince Productions, Ltd., Tyne River Properties plc, Terence G. Galgey, William J. Peacock, and Peter N. Chapman 10.2(1) Letter, dated November 16, 1992, from the directors of TRP to Registrant consenting to Registrant's declaring the Exchange Offer unconditional and delivering certificate from Barclays Registrars respecting the receipt of acceptances of the Exchange Offer from the holders of 90.38% of the TRP Ordinary shares, and 100% of the TRP Founder and Deferred Shares 10.3(2) Agreement, dated August 22, 1994, between Little Prince Productions, Ltd. and Riparian Securities Limited - --------------- *Filed herewith. (1) Filed with the Securities and Exchange Commission as an exhibit, to Registrant's Form 10-K, dated November 16, 1992, which exhibit is incorporated herein by reference. (2) Filed with the Securities and Exchange Commission as an exhibit, to Registrant's Form 8-K, dated August 22, 1994, which exhibit is incorporated herein by reference. (b) Reports on Form 8-K No reports on Form 8-K have been filed by Registrant during the last quarter of the period covered by this report. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LITTLE PRINCE PRODUCTIONS, LTD. May 3, 1996 By /s/ Adrian P. Kirby ------------------- ADRIAN P. KIRBY, Chairman of the Board, Chief Executive Officer and President In accordance with the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. May 3, 1996 By /s/ Adrian P. Kirby ------------------- ADRIAN P. KIRBY, Chairman of the Board, Chief Executive Officer and President May 3, 1996 By /s/ Peter N. Chapman -------------------- PETER N. CHAPMAN, Director, Treasurer and Secretary May 3, 1996 By /s/ Robert D. Evans ------------------- ROBERT D. EVANS, Director and Executive Vice President Little Prince Productions, Ltd. and Subsidiaries December 31, 1995 ----------------------------------------------------- TABLE OF CONTENTS ----------------------------------------------------- Independent Auditor's Report..............................................F-2 Financial Statements: Consolidated Balance Sheets......................................F-3 Consolidated Statements of Operations............................F-4 Consolidated Statement of Shareholders Deficit.................. F-5 Consolidated Statements of Cash Flows............................F-6 Notes to Financial Statements....................................F-8 F-1 Independent Auditor's Report The Directors and Shareholders, Little Prince Productions, Ltd. We have audited the consolidated balance sheets of Little Prince Productions, Ltd.. and subsidiaries at 31st December 1995 and 1994 and the related consolidated statements of operations, shareholders' deficit and cash flows for each of the three years ended 31st December 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Little Prince Productions, Ltd.. and subsidiaries as at 31st December 1995 and 1994, and the consolidated results of their operations and cash flows for each of the three years ended 31st December 1995, in conformity with generally accepted accounting principles. /s/ Moore Stephens, LLP New York, New York 3rd May, 1996 F-2 Little Prince Productions, Ltd. and Subsidiaries Consolidated Balance Sheets 31st December 31st December 1995 1994 ---- ---- $ $ Assets Current Assets Cash and cash equivalents 946 5,241 Investment in US Government Bond Fund -0- 10,900 Prepaid expenses and taxes 612 612 Other debtors 6,629 23,700 ----------- ----------- Total Current Assets 8,187 40,453 ----------- ----------- Other Assets Production rights 5,000 7,500 Investment in joint ventures 3,728 3,728 ----------- ----------- Total Other Assets 8,728 11,228 ----------- ----------- Total Assets 16,915 51,681 =========== =========== Liabilities and Shareholders' Deficit Current Liabilities Accounts payable 159,145 159,145 Accrued professional fees 32,826 55,000 Due to shareholder 92,355 -0- ----------- ----------- Total Current Liabilities 284,326 214,145 ----------- ----------- Shareholders' Deficit Common stock $0.01 par value Authorized - 25,000,000 shares Issued and outstanding - 24,999,236 shares 249,992 249,992 Additional paid-in capital 3,006,891 3,006,891 Accumulated deficit (3,524,294) (3,419,347) ----------- ----------- Total Shareholders' Deficit (267,411) (162,464) ----------- ----------- Total Liabilities and Shareholders' Deficit 16,915 51,681 =========== =========== The accompanying notes are an integral part of these financial statements. F-3 Little Prince Productions, Ltd. and Subsidiaries Consolidated Statements of Operations
Year ended 31st December ---------------------------------------------- 1995 1994 1993 ---- ---- ---- $ $ $ Net Sales 20,779 7,029 12,726 Operating costs (125,726) (102,434) (189,594) ------- -------- -------- Loss from continuing operations (104,947) (95,405) (176,868) Interest income -0- 663 698 -------- ------- -------- Loss from operations before (104,947) (94,742) (176,170) provision for income taxes Provision for income taxes -0- -0- -0- ------- ------- --------- Loss from continuing operations after (104,947) (94,742) (176,170) provision for income taxes Discontinued Operations Loss from discontinued operations -0- (324,878) (2,195,149) Gain on disposal of subsidiary -0- 287,428 -0- -------- -------- --------- Net Loss (104,947) (132,192) (2,371,319) ======= ======= ========= Loss per share: Continuing Operations (0.004) (0.01) (0.01) Discontinued Operations 0.00 (0.02) (0.16) Gain on disposal of subsidiary 0.00 0.02 0.00 ---- ---- ---- Net Loss (0.004) (0.01) (0.17) ======= ====== ====== Average number of shares outstanding 24,999,236 16,711,564 13,999,236 ========== ========== ==========
The accompanying notes are an integral part of these financial statements. F-4 Little Prince Productions, Ltd. an Subsidiaries Consolidated Statements of Shareholders' Deficit
Common Stock Foreign Number Additional Currency of Paid-in Translation Accumulated Shares Amount Capital Adjustment Deficit Total ------ ------ ------- ---------- ------- ----- $ $ $ $ $ Balance - 31st December 1992 13,999,236 139,992 2,621,735 (246,168) (647,932) 1,867,627 Translation adjustment - - - (21,736) - (21,736) Net loss for the year - - - - (2,371,319) (2,371,319) ----------- ------------ ------------- --------------- ----------- ----------- Balance - 31st December 1993 13,999,236 139,992 2,621,735 (267,904) (3,019,251) (525,428) Issuance of ordinary shares - 3rd October 1994 11,000,000 110,000 385,156 - - 495,156 Transfer through reserves on disposal of subsidiary - - - 267,904 (267,904) -0- Net loss for the year - - - - (132,192) (132,192) ----------- ------------ ------------- --------------- --------- --------- Balance - 31st December 1994 24,999,236 249,992 3,006,891 -0- (3,419,347) (162,464) Net loss for the year - - - - (104,947) (104,947) ----------- ------------ ------------- --------------- --------- --------- Balance - 31st December 1995 24,999,236 249,992 3,006,891 -0- (3,524,294) (267,411) ========== ======= ========= ============= =========== =========
The accompanying notes are an integral part of these financial statements. F-5 Little Prince Productions, Ltd. and Subsidiaries Consolidated Statements of Cash Flows
Year ended 31st December ----------------------------------- 1995 1994 1993 ---- ---- ---- $ $ $ Operating Activities Net loss (104,947) (132,192) (2,371,319) Adjustments to reconcile net loss to Net Cash Provided by Operating Activities: Depreciation and amortization 2,500 3,048 36,090 Bad debt expense 18,930 Effect of foreign currency exchange rate changes on cash and cash equivalents -0- -0- 25,019 Adjustment on disposal of fixed assets -0- -0- (148) Minority interests -0- 12 (3,799) Capitalization of interest as development properties cost -0- -0- 207,678 Adjustment on disposal of subsidiary -0- (287,428) -0- Change in Assets and Liabilities: (Increase)/Decrease in Assets: Accounts Receivable and other debtors (1,859) 94,413 1,951,428 Development properties -0- 406,163 2,522,337 Increase/(Decrease) in Liabilities: Accounts payable and other current liabilities: (22,174) 151,640 (1,026,516) Due to shareholder 92,355 -0- -0- United Kingdom Corporation Tax refunds -0- -0- 13,579 ------- ------- --------- Net Cash Provided/(Used) - Operating Activities (15,195) 235,656 1,354,349 ------- ------- --------- Investing Activities: Proceeds on disposal of assets -0- -0- 148 Capital expenditure -0- -0- (703) Purchase of US Government Bonds -0- -0- (20,000) Proceeds on disposal of subsidiary -0- 1 -0- Proceeds on disposal of US Government Bonds 10,900 9,100 -0- Investment in joint venture -0- (3,000) -0- Cash released on disposal of subsidiary -0- (2,290) -0- -------- ----------- --------- Net Cash Provided/(Used) - Investing Activities 10,900 3,811 (20,555) ------ ----- --------
The accompanying notes are an integral part of these financial statements. F-6 Little Prince Productions, Ltd. and Subsidiaries Consolidated Statements of Cash Flows (Continued)
Year ended 31st December ------------------------ 1995 1994 1993 ---- ---- ---- $ $ $ Financing Activities Issuance of common stock -0- 32,500 -0- New short term loans -0- -0- -0- Repayment of loans -0- (315,283) (1,360,235) Bank overdrafts -0- 18,624 -0- -------- --------- ----------- Net Cash Used - Financing Activities -0- (264,159) (1,360,235) -------- --------- ----------- Net Decrease in Cash and Cash Equivalents (4,295) (24,692) (26,441) Cash and Cash Equivalents - Beginning of Years 5,241 29,933 56,374 -------- --------- ---------- Cash and Cash Equivalents - End of Years 946 5,241 29,933 ======== ========= ==========
Supplemental Disclosure - ----------------------- During 1994, 7,750,000 common shares of $0.01 each were issued in respect of cancellation of liabilities amounting to $462,657. 1995 1994 1993 ---- ---- ---- $ $ $ Cash paid during the year for: Interest (net of amount capitalized) -0- 34 876 - --------- The accompanying notes are an integral part of these financial statements. F-7 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 1. Summary of Significant Accounting Policies The Company/Business Combination The Company's principal business is real estate, including acquiring, developing, selling, leasing and managing, mainly in the United Kingdom. In 1995 the Company was inactive except for administration activities in connection with its required filings. LPPL Corp., its wholly-owned subsidiary, is involved in the presentation of theatrical performances. All of the revenue earned in 1995 was from royalties in connection with these productions. The accompanying consolidated financial statements give effect to the business combination of Little Prince Productions, Ltd. and Tyne River Properties plc as a reverse acquisition on 16th November 1992 under the purchase method of accounting. Tyne River Properties plc was as at 31st December 1993 a subsidiary of Little Prince Productions, Ltd.. On 29th March 1994, Tyne River Properties plc and all other United Kingdom subsidiaries were sold for (pound)1 (see note 5). The financial results in respect of each of the two years ended 31st December 1994 have been restated so as to show the financial results of Tyne River Properties Plc as a discontinued operation. The financial results included in respect of Tyne River Properties Plc are for the year ended 31st December 1993, and for the period up to 29th March 1994. On 16th November 1992 Little Prince Productions, Ltd. acquired 100% of the issued share capital of Tyne River Properties plc, a company incorporated in the United Kingdom, in exchange for 11,899,236 shares of Little Prince Productions, Ltd. common stock, comprising upon their issuance, approximately 85% of the common stock of the Company, issued and outstanding. Due to the relative size of the companies, Tyne River Properties plc was deemed the purchaser. For accounting purposes, the acquisition was treated as a recapitalization of Tyne River Properties plc with Tyne River Properties plc the acquirer (reverse acquisition). As at 31st December 1993 Tyne River Properties plc owned all of the issued and outstanding capital stock of the following companies, all of which are incorporated in England, and whose principal activity was property development, unless otherwise indicated: Exchange Buildings Limited Pandon Developments Limited Selective Construction Projects plc (88.8% interest) Period and Country Estates Limited (Dormant) The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and balances have been eliminated on consolidation. The accompanying notes are an integral part of these financial statements. F-8 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 (Continued) 1. Summary of Significant Accounting Policies (con't) Management Estimates The preparation of these financial statements in accordance with generally accepted accounting principles requires the use of management estimates. Depreciation Fixtures and fittings are depreciated over four years on the straight line basis. Development Properties Development properties are included in the balance sheet date at the lower of cost (including attributable interest and overheads) and net realizable value. Production Rights Production rights are amortized by systematic charges to income over the estimated remaining life of such rights pursuant to APB17 and the provisions of FAS63. Usually capitalized rights are amortized based on the estimated number of future showings, however, the rights provide for unlimited showings over the period of the agreement and in management's opinion, the estimated number of future showings are not determinable. Where applicable, an additional charge is made in order to write down the value of the rights to their perceived value. Foreign Currency Translation Balance sheet amounts denominated in United Kingdom sterling have been translated into U.S. dollars using the year end rate of exchange. Operational results denominated in United Kingdom sterling have been translated into U.S. Dollars using the average annual rate of exchange. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The accompanying notes are an integral part of these financial statements. F-9 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 (Continued) 2. Net Sales Net sales comprised: 1995 1994 1993 ---- ---- ---- $ $ $ Royalty income 20,779 7,029 12,726 ====== ===== ====== Virtually all royalty income is derived from one payer. The income arises from the Company's interest in various theatrical productions. 3. Interest Income 1995 1994 1993 ---- ---- ---- $ $ $ Bank interest -0- 663 698 === === === 4. Provision for Income Taxes No liability to income taxes arises due to the losses of the Company and its subsidiary. As of January 1, 1993 the Company adopted Statement of Accounting Standards No. 109 ("FAS 109"), Accounting for Income Taxes. In prior years the Company followed the provisions of Accounting Principles Board Opinion 11. Prior year financial statements have not been restated to reflect the provisions of FAS 109. No cumulative effect of the change in accounting principle to FAS 109 is recorded in the statement of operations as the gross deferred asset resulting from the change has been offset by a valuation allowance of the same amount. The gross asset of $1,202,000 in 1995 ($1,160,000 in 1994) arises from net operating loss carryovers; however, management believes that there will not be enough taxable income in the future to utilize the losses and therefore a valuation allowance has been established for the full amount of the asset. The accompanying notes are an integral part of these financial statements. F-10 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 (Continued) 4. Provision for Income Taxes (con't) The Company has approximately $3,015,400 of net operating losses which can be used to offset future federal taxable income. The losses expire as follows: $ 1996 671,000 1997 50,000 1998 14,200 1999 12,600 2003 236,400 Thereafter 2,031,200 --------- 3,015,400 ========= 5. (Loss)/Income from Discontinued Operations (Loss)/income from discontinued operations relates to the financial results of Tyne River Properties Plc., which company was sold on 29th March 1994. The results comprised: 1994 1993 ---- ---- $ $ Net sales: Sale of properties 524,175 3,062,958 Rental income 1,222 28,307 ------- --------- 524,297 3,091,265 Operating costs: Provision of foreseeable losses on development contracts (509,190) Write down of land and buildings held for development to net realizable value (152,494) Other operating costs (849,365) (4,744,123) ------- --------- (849,365) (5,405,807) ------- --------- The accompanying notes are an integral part of these financial statements. F-11 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 (Continued) 5. (Loss)/Income from Discontinued Operations (con't) 1994 1993 ---- ---- $ $ (Loss)/Income from operations (325,068) (2,314,542) Interest income 212 3,370 Interest expense (34) (876) -------- --------- (Loss)/Income before provision for income taxes (324,890) (2,312,048) Provision for income taxes -0- 113,056 -------- --------- (Loss)/income after provisions for income taxes (324,890) (2,198,992) Minority interests 12 3,843 -------- --------- Net (loss)/income (324,878) (2,195,149) ========= ========= Interest Costs: 1994 1993 ---- ---- $ $ On bank loans and overdrafts 74,042 404,459 On other loans 34 876 -------- -------- 74,076 405,335 Transfer to development properties (note 7) (74,042) (404,459) --------- -------- Interest expense 34 876 ========= ======= Provision for Income Taxes: 1994 1993 ---- ---- $ $ United Kingdom corporation tax on profits for the year at 33% -0- -0- United Kingdom corporation tax recoverable -0- 113,056 --------- -------- -0- $113,056 ========= ======== The accompanying notes are an integral part of these financial statements. F-12 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 (Continued) 6. Investment in US Government Bond Fund The investment in the US Government Bond Fund relates to an investment in a mutual fund comprised of short term debt securities issued by the US Treasury and other US Government agencies. As a mutual fund, the investment has no stated maturity date. On 1st January 1994, the Company adopted Statement of Accounting Standards No. 115 (FAS 115), Accounting for Certain Investments in Debt and Equity Securities; the cumulative effect of the change in accounting principle was immaterial. The investment is classified as available for sale securities. The entire investment was sold in 1995 with no resulting gain or loss. At 31st December 1994 cost approximates market. During 1994 there were no material gross unrealized gains. 7. Development Properties 1994 1993 ---- ---- $ $ Development properties -0- 3,229,950 Land held for development -0- 318,200 --- --------- -0- 3,548,150 === ========= Cumulative interest included in development properties -0- 894,941 On 29th March 1994 Tyne River Properties plc and all other United Kingdom subsidiaries were sold. 8. Production Rights On 4th April 1980, the then President of the Company assigned to the Company all of the Rights relating to theatrical productions which he had received, in connection with an agreement with TLP Productions, Ltd., Editions Gallimard and Solifilm S.A. Such Rights and the related value of the shares then issued were recorded in the Company's books at $80,000 plus additional costs of $6,500 for an extension of the Rights and legal fees totalling $86,500. These Rights were subsequently transferred to LPPL Corp. As at 31st December 1995, the unamortized portion of the Rights was $5,000. (1994: $7,500 after a write down of $28,925 in 1993). The accompanying notes are an integral part of these financial statements. F-13 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 (Continued) 9. Mortgage and Bank Loans The mortgage loan was a revolving facility and was secured on a development property. No repayment date was set for this facility. Interest was charged at the prevailing United Kingdom base mortgage rate as charged to owner occupiers plus 2 per cent. The bank loan was secured on a development property. No fixed maturity date existed, but the loan was repayable on demand. Interest was charged at the prevailing United Kingdom bank base rate plus 2 1/2 per cent. 1994 1993 ---- ---- Mortgage Loan Maximum amount outstanding ((pound)) 1,700,398 2,806,857 Weighted average interest rate (%) 10.3 10.6 Weighted average loan balance ((pound)) 1,566,310 1,768,265 Weighted average interest by value (%) 10.3 10.6 Bank Loan Maximum amount outstanding ((pound)) 488,733 488,733 Weighted average loan balance ((pound)) 488,733 488,733 Due to the nature of the bank loan whereby interest is charged directly to the bank account, no details of the weighted average interest rate and weighted average interest rate by value have been calculated. On 29th March 1994, Tyne River Properties plc was sold and consequently the mortgage no longer remains within the group. The accompanying notes are an integral part of these financial statements. F-14 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 (Continued) 10. Related Parties 1995 1994 1993 ---- ---- ---- $ $ $ Transactions with related parties comprised: Emoluments $18,500 $43,229 $56,250 Consideration to third parties for making available the services of directors 14,500 171,355 264,375 Other payments -0- -0- 35,766 ------ ------- ------- $33,000 $214,584 $356,391 ====== ======= ======= The accompanying notes are an integral part of these financial statements. F-15 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 (Continued) 10. Related Parties (con't) Transactions with related parties are as follows: 1995 1994 1993 ---- ---- ---- $ $ $ Mr. A.P. Kirby -0- -0- -0- Mr. C.N.C. Jones -0- -0- -0- Mr. T. Galgey -0- 61,979 95,625 Mr. W.J. Peacock -0- 54,688 120,141 Mr. P.N. Chapman 14,500 54,688 84,375 Mr. J. Tandet 18,500 25,000 28,125 Mr. C. Kuehner -0- 18,229 28,125 -------- -------- -------- $33,000 $214,584 $356,391 ====== ======= ======= Mr. W.J. Peacock was a director of the Company until his resignation in August 1994. Oform Associates Limited, a company incorporated in England, of which Mr. W.J. Peacock is a minority shareholder and non-executive director, provided project management, engineering, design and costing services in respect of the development projects carried out by Pandon Developments Limited (a subsidiary of the Company) and was entitled to receive 5.5 per cent of the construction costs of the project (capped at (pound)6,000,000; $8,880,000 at 1993 year end exchange rates). During the year ended 31st December 1993, $35,766 was paid in respect of these services. From this sum, disbursements were made to the Consulting Engineers and Quantity Surveyors employed by Oform Associates Limited for the provision of their services as follows: the Consulting Engineers were entitled to receive 0.67 per cent of the construction costs of the project and Quantity Surveyors were entitled to receive 1.0035 per cent of the construction costs (capped at (pound)6,000,000; $8,880,000 at 1993 year end exchange rates) from the fee paid to Oform Associates Limited. Fees payable in respect of consultancy services provided by Mr. W.J. Peacock in 1994 amounted to $54,688 (1993: $84,375) (see note 17). Mr. T. Galgey was a director of the Company until his resignation in August 1994. Galgey Financial Services Limited, of which Mr. T. Galgey is a director and shareholder, provided consultancy services to the Group. Fees payable in respect of such services in 1994 amounted to $61,979 (1993: $95,625) (see note 17). Mr. P.N. Chapman is a director of the Company. Chapman & Chapman, a firm of Chartered Accountants in which Mr. P.N. Chapman is a partner, provided consultancy and accounting services to the Group. Fees payable in respect of such services in the year amounted to $14,500 (1994: $54,688; 1993: 84,375) (see note 17). The accompanying notes are an integral part of these financial statements. F-16 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 (Continued) 10. Related Parties (con't) LPPL Corp. maintains its office at 555 Fifth Avenue, New York, N.Y., the office of Mr. J. Tandet, who was the President of the Company until his resignation in August 1994. Mr. Tandet receives no remuneration for this facility from the Company or from LPPL Corp. Fees payable in respect of his services as a director in the year and for managing the affairs of the Company's operating subsidiary, LPPL Corp, amounted to $18,500 (1994: $25,000; 1993: $28,125) (see note 18). In addition, a noninterest bearing advance of $6,629 (1994: $2,000) has been made to Mr. Tandet. This amount is included with Other debtors on the balance sheet. Mr. C. Kuehner was a director of the Company until his resignation in August 1994. Fees payable in respect of such services in 1994 amounted to $18,229 (1993: $28,125) (see note 17). A 25% shareholder has paid $92,355 to creditors on behalf of the Company. 11. Litigation Settlement Agreements On 18th December 1990, an action against Little Prince Productions, Ltd. commenced before the Tribunal de Grande Instance of Paris, France. The Plaintiff was seeking a judicial declaration of the termination of an agreement, along with reimbursement of all sums received and damages and legal fees of approximately $200,000. In February 1992, an agreement was reached to settle the above matter whereby Little Prince Productions, Ltd. was to receive $200,000 in return for giving up certain foreign rights to the "Rights" as follows: $50,000 receivable upon full performance of the Settlement Agreement and four receipts of $25,000 each every three months thereafter with a final receipt of $50,000 by November 1993. This settlement was fully satisfied in 1995. The Settlement also stipulated that the Company must abandon the corporate name "Little Prince Productions, Ltd." within 18 months from 6th February 1992. As at the date of the signing of these financial statements, the name of the Company has not been changed nor has any action been commenced by the plaintiff. The Company's former Counsel for a rescinded business combination instituted a lawsuit for legal fees of $81,000 in connection therewith. The Company filed a counterclaim against the plaintiff. In December 1992, all parties entered into a settlement agreement and in March 1993, the Group paid $25,000 in full settlement of this matter. In connection with the Group's 41% investment in the production of the musical play "Hearts Desire", the Cleveland Playhouse brought an action in the United States District Court for the Northern District of Ohio for the total sum of $75,000. The litigation was settled for $73,000 in April 1993, with $29,930 applicable to the Group and paid in 1993. The accompanying notes are an integral part of these financial statements. F-17 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 (Continued) 12. Royalty Agreements On 31st December 1992, LPPL Corp. authorized Theatreworks USA Corp, a New York stage production company which produces plays for family audiences, to produce a new musical stage production based upon the literary work entitled 'The Little Prince' ('the Work') and geared specifically for a juvenile audience. LPPL Corp. was paid $5,000 in January 1993 as an advance against two per cent (2%) of all gross revenues derived by Theatreworks from the production. No production has yet been mounted. On 1st December 1992 LPPL Corp. authorized two independent theatrical producers to produce another new musical stage production based upon the Work, in New York by 31st December 1993, geared for an adult audience. LPPL Corp. received a $2,000 advance in May 1993 against royalties of 1 1/2 per cent of gross weekly box office receipts increasing to 2% upon recoupment of production costs derived from the production. A production was mounted for one week in October 1993. The show was subsequently closed in order to move to a more suitable location and was reopened on 13th November 1993. Pursuant to the terms of their respective agreements with LPPL Corp, the two productions will not be staged at the same time or in the same location. 13. Other Debtors The following components of Other Debtors comprised at least 5% of total current assets: 1995 1994 ---- ---- $ $ Due from A. J. Tandet 6,629 2,000 Due from Riparian Securities Limited -0- 2,770 Due from former joint venture partner -0- 18,930 ----- ------ 6,629 23,700 ===== ====== 14. Post Balance Sheet Events A proxy statement was filed with the Securities and Exchange Commission in February 1996 detailing, among other things, a special meeting of shareholders to be held on February 29, 1996. At this meeting, the following resolutions were passed: to change the Company's state of incorporation from New York to Colorado by means of a merger of the Company into Atlantic; to authorize a ten for one reverse stock split and an increase in a number of authorized shares of the Company from 25,000,000 to 50,000,000; to sell the Company's interest in the common stock and its wholly owned subsidiary, LPPL Corp., to an independent third party; to authorize the Board of Directors of the Company to vote to dissolve LPPL Corp. The accompanying notes are an integral part of these financial statements. F-18 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 (Continued) 15. Additional Information on Cash Flows 1994 ---- $ Disposal of subsidiary Cash and cash equivalents (2,290) Development properties (3,141,987) Accounts receivable and other debtors (33,263) Property and equipment (1,415) Accounts payable and accrued income 437,804 Loans 2,924,631 Bank overdraft 18,626 Minority shareholders' interest 85,321 --------- 287,427 Proceeds of disposal 1 --------- Gain on disposal 287,428 ========= 16. Currency Translation Adjustment Changes in the currency translation adjustment included in the Shareholders' deficit section of the Consolidated Balance Sheet are as follows: 1995 1994 1993 ---- ---- ---- $ $ $ Currency translation adjustment 1st January -0- (267,904) (246,168) Translation adjustments -0- -0- (21,736) Adjustment through reserves -0- 267,904 -0- ------ -------- ------- Currency translation adjustment 31st December -0- -0- (267,904) ====== ======== ======= The accompanying notes are an integral part of these financial statements. F-19 Little Prince Productions, Ltd. and Subsidiaries Notes to the Financial Statements 31st December 1995 (Continued) 17. Major Shareholdings On August 22, 1994, the Company entered into certain agreements (the "Agreements") with Riparian Securities Limited ("Riparian"), a firm of professional advisers and the then directors of the Company. Pursuant to these Agreements, a total of 11 million shares of the Registrant's common stock were issued for $495,156. Of the 11 million shares, a total of 7,750,000 were issued to the following individuals and entities in settlement of liabilities totalling $462,656: Amount of Number of Name Liability Shares issued ---- --------- ------------- $ Terence G. Galgey 83,352 1,250,000 William J. Peacock 98,103 1,575,000 Peter N. Chapman 100,648 1,625,000 Carl Kuehner 46,354 800,000 John Milling 134,199 2,500,000 The remaining 3,250,000 shares were issued to Riparian for $32,500. Subsequent to August 22, 1994, Riparian acquired an additional 3,000,000 shares of common stock, resulting in Riparian owning 25% of the issued and outstanding common stock of the Company. On January 17, 1995 Riparian transferred its entire holding to the Patchouli Foundation, a Liechtenstein Stiftung. As of April 3, 1996, the Patchouli Foundation owned 25% of the issued and outstanding common stock of the Company. The Agreements also required, among other things, that Messrs. Galgey, Peacock, Kuehner and Tandet resign as directors of the Company, and that Messrs. Kirby and Jones be appointed as directors. The Company also entered into an agreement on August 22, 1994 to issue 500,000 shares to Mr. J. Tandet, at such time as the Company's certificate of incorporation is amended so as to increase its authorized capital stock, in consideration of Mr. Tandet's agreement to render extensive legal services in connection with certain litigation matters of the group. At the date of the signing of these financial statements, these shares have not been issued. In conjunction with the shareholders' authorizing a ten for one reverse stock split and an increase in the authorized shares, Mr. Tandet will receive 50,000 shares when these are issued (see Note 14). The accompanying notes are an integral part of these financial statements. F-20 EXHIBIT INDEX Certain of the following exhibits, designated with an asterisk (*), are filed herewith. The exhibits not so designated have been filed previously and are incorporated herein by reference to the documents indicated in brackets following the descriptions of such exhibits (for electronic filing purposes only, this report contains Exhibit 27, Financial Data Schedule). Exhibit No. Description - ----------- ----------- 2.1(1) Offer Document relating to the Recommended Offers by RAS Securities Corp. on behalf of Little Prince Productions, Ltd. to acquire the entire issued share capital of Tyne River Properties plc and Notice of Extraordinary General Meeting of Tyne River Properties plc 2.2(1 Announcement; dated November 16, 1992, by RAS Securities Corp. respecting valid acceptances of the Exchange Offer (mailed to TRP shareholders) 2.3* Agreement and Plan of Merger dated February 9, 1996, between Registrant and Atlantic Industries, Inc. 3.1* Certificate of Incorporation, as amended 3.2* Bylaws 4.1* A description of the rights of the Registrant's shareholders is contained in the Certificate of Incorporation, as amended, filed as Exhibit 3.1 and is incorporated herein by reference. 10.1(1) Agreement, dated October 21, 1992, by and among Little Prince Productions, Ltd., Tyne River Properties plc, Terence G. Galgey, William J. Peacock, and Peter N. Chapman 10.2(1) Letter, dated November 16, 1992, from the directors of TRP to Registrant consenting to Registrant's declaring the Exchange Offer unconditional and delivering certificate from Barclays Registrars respecting the receipt of acceptances of the Exchange Offer from the holders of 90.38% of the TRP Ordinary shares, and 100% of the TRP Founder and Deferred Shares 10.3(2) Agreement, dated August 22, 1994, between Little Prince Productions, Ltd. and Riparian Securities Limited - --------------- *Filed herewith. (1) Filed with the Securities and Exchange Commission as an exhibit, to Registrant's Form 10-K, dated November 16, 1992, which exhibit is incorporated herein by reference. (2) Filed with the Securities and Exchange Commission as an exhibit, to Registrant's Form 8-K, dated August 22, 1994, which exhibit is incorporated herein by reference. EX-2.3 2 AGREEMENT AND PLAN OF MERGER EXHIBIT 2.3 Agreement and Plan of Merger dated February 9, 1996, between Registrant and Atlantic Industries, Inc. AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER (this "Merger Agreement") dated as of February 9, 1996, by and between Little Prince Productions, Ltd., a New York corporation ("Little Prince"), and Atlantic Industries, Inc., a Colorado corporation and a wholly owned subsidiary of Little Prince ("Atlantic"). W I T N E S S E T H: WHEREAS, Little Prince has an authorized capitalization of (a) 25,000,000 shares of common stock, par value $.01 per share ("LP Common"), of which 24,999,236 shares are issued and outstanding on the date hereof and (b) no shares of Preferred Stock; WHEREAS, Atlantic has an authorized capitalization of (a) 40,000,000 shares of Common Stock, par value $.01 per share ("Atlantic Common"), of which 100 shares are issued and outstanding as of the date hereof and all of such shares are held by Little Prince, and (b) 10,000,000 shares of Preferred Stock, none of which are issued and outstanding; WHEREAS, the respective Boards of Directors of Little Prince and Atlantic deem it advisable and in the best interest of each such corporation and its stockholders that Little Prince reincorporate in Colorado by means of a merger of such corporations as herein contemplated, and, in accordance therewith, that Little Prince be merged into Atlantic in the manner contemplated herein (the "Merger"), with Atlantic surviving and that the LP Common be exchanged for Atlantic Common, on the basis of one share of Atlantic Common for every 10 shares of LP Common, with the result that the holders of LP Common will become the holders of Atlantic Common upon consummation of the transactions provided for herein, and that such Merger be submitted to and approved and adopted by the holders of LP Common and by Little Prince as sole stockholder of Atlantic; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and subject to the conditions herein set forth and for the purpose of stating the terms and conditions of the Merger, the mode of effecting the same, the manner of converting the shares of LP Common issued and outstanding immediately prior to the filing of the Articles of Merger and the Certificate of Merger with the Secretary of the State of the State of Colorado and with the Department of State of the State of New York, respectively (the date and time of the last to occur of such filings being herein called the "Effective Date"), into shares of Atlantic Common, the manner of exchanging the shares of LP Common issued and outstanding immediately prior to the Effective Date for shares of Atlantic Common, and such other details and provisions as are deemed desirable, the parties hereto have agreed, subject to the terms and conditions hereinafter set forth and in accordance with the terms and provisions of the Colorado Business Corporation Act (the "Colorado Law") and the New York Business Corporation Law (the "New York Law"), as follows: ARTICLE I MERGER OF LITTLE PRINCE AND ATLANTIC Section 1.01. Effect of Merger. On the Effective Date hereof, pursuant to the provisions of the Colorado Law and the New York Law, Little Prince and Atlantic shall be merged into a single corporation by Little Prince merging into Atlantic, with Atlantic surviving as the surviving corporation (hereinafter sometimes referred to as the "Surviving Corporation"). Upon consummation of the Merger, the separate corporate existence of Little Prince shall cease and the Surviving Corporation shall become the owner, without transfer, of all rights, powers, assets, qualifications and property of Little Prince, and the Surviving Corporation shall become subject to all debts and liabilities of Little Prince in the same manner as if the Surviving Corporation had itself incurred them. Section 1.02. Name of Surviving Corporation. The name of the Surviving Corporation shall be "Atlantic Industries, Inc." The purposes, county where the principal office for the transaction of business shall be located, number and classification of directors, and capital stock of the Surviving Corporation shall be as appears in the Articles of Incorporation of Atlantic and as hereinafter set forth. Section 1.03. Charter and Bylaws of Atlantic. From and after the Effective Date and until thereafter duly amended as provided by law, the Articles in Incorporation of Atlantic and the Bylaws of Atlantic, in each case as in effect at the Effective Date, shall become the Articles of Incorporation and Bylaws of the Surviving Corporation. Section 1.04. Directors and Officers of Atlantic. (a) The number of directors in each class of directors of Atlantic immediately prior to the Effective Date shall be the number of directors in each class of directors of the Surviving Corporation, and the directors of Atlantic immediately prior to the Effective Date shall be the directors of the Surviving Corporation, to hold office in the same classes as in effect immediately prior to the Effective Date, in accordance with the Bylaws of the Surviving Corporation, until their respective successors are duly appointed or elected and qualified, or their prior death, resignation or removal. (b) The officers of Little Prince immediately prior to the Effective Date shall be the officers of the Surviving Corporation until their respective successors are duly elected and qualified, or their prior resignation, removal or death. ARTICLE II EXCHANGE AND ISSUANCE OF STOCK Section 2.01. The manner of effecting the Merger contemplated herein, including the conversion of the shares of LP Common issued and outstanding immediately prior to the Effective Date into shares of Atlantic Common shall be as follows: 2 (a) At the Effective Date each of the following transactions shall be deemed to occur simultaneously: (i) Every 10 shares of LP Common issued and outstanding immediately prior to the Effective Date shall, by virtue of the Merger and without any action on the part of the holder thereof, automatically be cancelled and converted into and shall be one fully paid and non-assessable share of Atlantic Common. (ii) All shares of LP Common which shall then be held in Little Prince's treasury, if any, shall cease to exist, and all certificates representing such shares shall be cancelled by virtue of the Merger. (iii) Each share of Atlantic Common presently issued in the name of Little Prince shall be cancelled and retired and shall resume the status of authorized and unissued shares of Atlantic Common and no shares of Atlantic Common or other securities of Atlantic shall be issued in respect thereof. (b) After the Effective Date: (i) Each holder of a certificate or certificates representing issued and outstanding shares of LP Common (a "Former Holder"), may, but is not required to, surrender the same to American Stock Transfer & Trust Company, or such other agent or agents as may be appointed by Atlantic (the "Exchange Agent") for cancellation or transfer, and each such holder or transferee will be entitled to receive a certificate or certificates representing one shares of Atlantic Common for every 10 shares of LP Common previously represented by the stock certificates surrendered until so surrendered or presented for transfer, each certificate which, prior to the Effective Date, represented issued and outstanding shares of LP Common, shall be deemed and treated for all corporate purposes to represent the ownership of one-tenth (1/10) of a share of Atlantic Common for each share of LP Common represented by the certificate as though such surrender or transfer and exchange had taken place. The stock transfer books for LP Common Stock shall be deemed to be closed at the Effective Date with respect to each such share of LP Common, and no transfer of such shares shall thereafter be made on such books. (ii) If any certificate for Atlantic Common is to be issued in a name other than that in which the certificate for LP Common surrendered for exchange is registered, shall be a condition of such exchange that the certificate so surrendered shall be properly endorsed and otherwise in proper form for transfer and that the person requesting such exchange shall pay to the Exchange Agent any transfer or other taxes required by reason of the issuance of such Atlantic Common in any name other than that of the registered holder of the certificate surrendered, or established to the satisfaction of the Exchange Agent that such tax has been paid or is not applicable. 3 Section 2.02. Dissenting Stockholders. Notwithstanding the provisions of Section 2.01, any outstanding shares of LP Common held by stockholders who shall have elected to dissent from the Merger and who shall have exercised and perfected appraisal rights with respect to such shares in accordance with Section 623 of the New York Law ("Dissenting Stockholders") shall not be converted into shares of Atlantic Common but shall be entitled to receive only such consideration as shall be provided in said Section 623, except that LP Common outstanding on the Effective Date and held by a Dissenting Stockholder who shall thereafter withdraw his election to dissent from the Merger or lose his right to dissent from the Merger as provided in said Section 623, shall be deemed converted, as the Effective Date, into such number of shares of Atlantic Common as such holder otherwise would have been entitled to receive as a result of the Merger. ARTICLE III STOCKHOLDER APPROVAL Section 3.01. Approval by Stockholders of Little Prince. Little Prince shall duly convene the Special Meeting of Stockholders of Little Prince (the "Special Meeting") in connection with which, among other things, the approval by such stockholders of this Merger Agreement, and the transactions contemplated hereby, shall be solicited. Little Prince shall use its reasonable best efforts to obtain such approval. Section 3.02. Approval by Stockholders of Atlantic. Little Prince, as sole stockholder of Atlantic, shall consent in writing to the execution of this Merger Agreement prior to the Effective Date. ARTICLE IV CLOSING CONDITIONS; CLOSING Section 4.01. Closing Conditions. The consummation of the Merger and the transactions set forth in this Merger Agreement are subject to the satisfaction on or prior to the Effective Date of the following conditions: (a) The transactions contemplated by this Merger Agreement shall have received the approval by affirmative vote of the holders of two-thirds of the shares of LP Common outstanding at the record date of the Special Meeting. (b) The absence of any material pending or threatened litigation concerning the Merger or any other transaction contemplated by the Merger Agreement (unless such condition shall be waived by the Board of Directors of Little Prince); (c) Statutory dissent and appraisal rights not having been exercised by the holders or more than 5% of the outstanding LP Common Stock (unless such condition shall be waived by the Board of Directors of Little Prince). 4 Section 4.02. Closing. The closing under this Merger Agreement shall occur on the Effective Date at a place mutually convenient to all the parties hereto. ARTICLE V TERMINATION OR ABANDONMENT OF MERGER This Merger Agreement may be terminated and the Merger abandoned at any time prior to the Effective Date by the Board of Directors of Little Prince, if the Board of Directors of Little Prince shall determine for any reason that the consummation of the transaction contemplated hereby would be inadvisable or not in the best interests of Little Prince and its stockholders. ARTICLE VI AMENDMENTS At any time prior to the Effective Date, the parties hereto may by written agreement amend, modify or supplement any provision of this Merger Agreement, provided that no such amendment, modification or supplement may be made if, in the sole judgment of the Board of Directors of Little Prince, it will materially and adversely affect the rights and interests of Little Prince's stockholders. ARTICLE VII GOVERNING LAW This Merger Agreement has been delivered in, and shall be construed under and in accordance with the laws of the State of New York except to the extent the laws of Colorado shall apply to the Merger. ARTICLE VIII HEADINGS The headings set forth herein are for convenience only and shall not be used in interpreting the text of the section in which they appear. ARTICLE IX SUCCESSORS AND ASSIGNS This Merger Agreement may not be assigned by either party without the consent of the other party hereto, and this Merger Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto. ARTICLE X 5 COUNTERPARTS For the convenience of the parties hereto, this Merger Agreement may be executed in separate counterparts, each of which, when so executed, shall be deemed to be an original, and such counterparts when taken together shall constitute but one and the same instrument. ARTICLE XI EXTENSIONS OF TIME; WAIVERS Any time prior to the Effective Date the parties hereto may, by written agreement (a) extend time for the performance of any of the obligations or other acts of the parties hereto, (b) waive any breach or inaccuracy in the representations and warranties contained in this Merger Agreement or in any document delivered pursuant hereto, or (c) waive compliance with any of the covenants, conditions or agreements contained in this Merger Agreement, except as set forth in Section 4.01 hereof. 6 IN WITNESS WHEREOF, Little Prince and Atlantic, pursuant to the approval and authority duly given by resolutions adopted by their respective Boards of Directors, each have caused this Merger Agreement to be executed by a duly authorized officer thereof, each of whom affirms the statements made herein by his respective company under penalty of perjury, and has further caused its respective corporate seal to be hereunto affixed, as of the date first above written. Little Prince Productions, Ltd., a New York corporation By /s/ Adrian P. Kirby ---------------------- Name:Adrian P. Kirby -------------------- Title:Chairman, President and Chief Executive --------------------------------------------- Officer ------- Atlantic Industries, Inc., a Colorado corporation By /s/ Adrian P. Kirby ---------------------- Name:Adrian P. Kirby -------------------- Title:Chairman, President and Chief Executive --------------------------------------------- Officer ------- 7 EX-3.1 3 CERTIFICATE OF INCORPORATION EXHIBIT 3.1 Certificate of Incorporation, as amended CERTIFICATE OF INCORPORATION OF LITTLE PRINCE PRODUCTIONS, LTD. Under Section 402 of the Business Corporation Law The undersigned, natural persons of the age of eighteen years or over, desiring to form a corporation pursuant to the provisions of the Business Corporation Law of the State of New York, hereby certify as follows: FIRST: The name of the corporation is LITTLE PRINCE PRODUCTIONS, LTD. SECOND: The purposes for which it is formed are as follows: To engage in a general business of literary, motion picture, theatrical distributors and agencies and producers and in connection therewith, to present, manage, conduct, and represent authors, actors, actresses, singers, and musicians and to purchase or otherwise acquire and obtain exclusive and other interests in the copyrights and rights of representation, and any other rights of or in any literary works of all kinds, including, but not limited to, plays, music, songs, words, operas, comedies, burlesques, and compositions. To purchase, manufacture, produce, assemble, receive, lease or in any manner acquire, hold, own, use, operate, install, maintain, service, repair, process, alter, improve, import,, export, sell, lease, assign, transfer and generally to trade and deal in and with, raw materials, natural or manufactured articles or products, machinery, equipment, devices, systems, parts, supplies, apparatus and personal property of every kind, nature or description, tangible or intangible, used or capable of being used for any purpose whatsoever and to engage and participate in any mercantile, manufacturing or trading business of any kind or character. To purchase, receive, lease or otherwise require and to manage, hold, own, use, improve, convey, sell, mortgage, or otherwise deal in and with lands, buildings and real property of every description, or any interest therein. To adopt, apply for, obtain, register, purchase, lease or otherwise acquire and to maintain, protect, hold, use, own, exercise, develop, manufacture under, operate and introduce, and to sell and grant licenses or other rights in respect of, assign or otherwise dispose of, turn to account, or in any manner deal with and contract with references to, any trade marks, trade names, patents, patent rights, concessions, franchises, designs, copyrights and distinctive marks and rights analogous thereto, and inventions, devices, improvements, processes, recipes, formulae and the like, including such thereof as may be covered by, used in connection with, or secured or received under, Letters of Patent of the United States of America or elsewhere or otherwise, and any licenses in respect thereof and any or all rights connected therewith or appertaining thereto. In furtherance of its corporation business and subject to the limitations prescribed by statute, to acquire by purchase, exchange or otherwise, all or any part of, or any interest in, the properties, assets, business and goodwill of any one or more corporations, associations, partnerships, firms, syndicates or individuals and to pay for the same in cash, property or its own or other securities; to hold, operate, reorganize, liquidate, mortgage, pledge, sell, exchange, or in any manner dispose of the whole or any part thereof; and in connection therewith, to assume or guarantee performance of any liabilities, obligations or contracts of corporations, associations, partnerships, firms, syndicates or individuals, and to conduct in any lawful manner the whole or any part of any similar business thus acquired. To acquire or become interest in, whether by subscription, purchase, underwriting, loan, participation in syndicates or otherwise, to own, hold, to sell, assign or otherwise dispose of, or in any manner to deal in or with stocks, bonds, debentures, warrants, rights, scrip, notes, evidences of indebtedness, or other securities or obligations of any kind by whomsoever issued, to exercise in respect thereof all powers and privileges of individual ownership or interest therein, including, the right to vote thereon for any and all purposes; to consent, or otherwise act with respect thereto, without limitations; and to issue in exchange therefor the corporation's stock, bonds, debentures, warrants, rights, scrip, notes, evidences of indebtedness or other securities or obligations of any kind. To borrow money for its corporate purposes, and to make, accept, endorse, execute and issue promissory notes, bills of exchange, bonds, debentures or other obligations from time to time, for the purchase of property, or for any purpose relating to the business of the corporation, and if deemed proper, to secure the payment of any such obligations by mortgage, pledge, guarantee, deed of trust or otherwise. To lend its uninvested funds from time to time to such extent, on such terms and on such security, if any, as the Board of Directors of the corporation may determine. In furtherance of its corporate business and subject to the limitations prescribed by statute, to be a promoter, partner, member, associate or manager of other business enterprises or ventures, or to the extent permitted in any other jurisdiction to be an incorporator of other corporations of any type or kind and to organize, or in any way participate in the organization, reorganization, merger or liquidation of any corporation, association or venture and the management thereof. Subject to the limitations prescribed by statute and in furtherance of its corporate business, to pay pensions, establish and carry out pension, profit sharing, share bonus, share purchase, share option, savings, thrift and other retirement, incentive and benefit plans, trusts and provisions for any or all of its directors, officers and employees. To conduct its business in all or any of its branches, so far as permitted by law, in the State of New York and in all other states of the United States of America, in the territories and the District of Columbia and in any or all dependencies or possessions of the United States of America, and in foreign countries; and to hold, possess, purchase, lease, mortgage and convey real and personal property and to maintain offices and agencies either within or outside the State of New York To carry out all or any part of the foregoing purposes as principal, factor, agent, broker, contractor or otherwise either along or in conjunction with any persons, firms, associations, corporations or others in any part of the world; and in carrying on its business and for the purpose of attaining or furthering any of its purposes, to make and perform contracts of any kind and description, and to do anything and everything necessary, suitable, convenient or proper for the accomplishment of any of the purposes herein enumerated. For the accomplishment of the aforesaid purposes, and in furtherance thereof, the corporation shall have and may exercise all of the powers conferred by the Business Corporation Law upon corporations formed thereunder, subject to any limitations contained in Article 2 of said law or in accordance with the provisions of any other statute of the State of New York. THIRD: The office of the corporation in the State of New York shall be located in the City of New York, County of New York. FOURTH: The aggregate number of shares which the corporation shall have authority to issue is two hundred (200) shares all of which are without par value. FIFTH: The Secretary of State is designated as the agent of the corporation upon whom process against the corporation may be served, and the address to which the Secretary of State shall mail a copy of any process against the corporation served upon him is c/o Gersten, Scherer and Kaplowitz, 150 East 58th Street, New York, New York 10022. SIXTH: The shareholders, or the Board of Directors of the corporation without the assent or vote of the shareholders, shall have the power to adopt, alter, amend or repeal the ByLaws of the corporation. IN WITNESS WHEREOF, we hereunto sign our names and affirm that the statements made herein are true under the penalties of perjury, this 24th day of March, 1980. Name Address ---- ------- /s/ Mark Skubick 9 East 40th Street - --------------------------- New York, New York 10016 Mark Skubick - Incorporator /s/ Maria Silvestri 9 East 40th Street - --------------------------- New York, New York 10016 Maria Silvestri - Incorporator CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF LITTLE PRINCE PRODUCTS, LTD. Under Section 805 of the Business Corporation Law Pursuant to the provisions of Section 805 of the Business Corporation law, the undersigned, being the incorporators of the corporation, hereby certify: FIRST: The name of the corporation is LITTLE PRINCE PRODUCTIONS, LTD. SECOND: That the Certificate of Incorporation was filed by the Secretary of State of New York on the 3rd day of April, 1980. THIRD: That the amendment to the Certificate of Incorporation effected by this Certificate is as follows: Paragraph FOURTH of the Certificate of Incorporation, relating to the authorized shares of the corporation, is hereby amended to change as a unit the authorized shares from two hundred (200) no par to two million five hundred thousand (2,500,000) shares, par value one cent ($0.01), so as to read as follows: "FOURTH: (a) The aggregate number of shares which the corporation shall have authority to issue is two million five hundred thousand (2,500,000) shares all of which have a par value of one cent ($0.01) per share. (b) No holder of any share of the corporation shall, because of his ownership of shares have a preemptive or other right, to purchase, subscribe for or take any part or other securities convertible into or carrying options or warrants to purchase shares of the corporation issued, optioned or sold by it after its incorporation, whether the shares be authorized by this certificate of incorporation or be authorized by an amended certificate duly filed and in effect at the time of the issuance or sale of such shares or of such notes, debentures, bonds or other securities convertible into or carrying options or warrants to purchase shares of the corporation. Any part of the shares authorized by this certificate of incorporation, or by an amended certificate duly filed, and any part of the notes, debentures, bonds or other securities convertible into or carrying options or warrants to purchase shares of the corporation may at any time be issued, optioned for sale and sold or disposed of by the corporation pursuant to resolution of its Board of Directors to such persons and upon such terms and conditions as may, to such Board, seem proper and advisable without first offering to existing shareholders the said shares or the said notes, debentures, bonds or other securities convertible into or carrying options or warrants to purchase shares of the corporation, or any part of any thereof." FOURTH: That the amendment of the Certificate of Incorporation is authorized by the written consent of the incorporators of the corporation there being no officers, directors, shareholders of record or subscribers to shares whose subscriptions have been accepted. IN WITNESS WHEREOF, we hereunto sign our names and affirm that the statements made herein are true under the penalties of perjury, this 23rd day of April, 1980. LITTLE PRINCE PRODUCTIONS, LTD. /s/ Mark Skubicki ----------------- Mark Skubicki, Incorporator /s/ Maria Silvestri ------------------- Maria Silvestri, Incorporator 2 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF LITTLE PRINCE PRODUCTIONS, LTD. Under Section 805 of the Business Corporation Law Pursuant to the provisions of Section 805 of the Business Corporation Law, we, the undersigned, Adrian P. Kirby and Peter N. Chapman, being respectively the Chairman of the Board, Chief Executive Officer and President, and Secretary of Little Prince Productions, Ltd., a New York corporation, hereby certify: FIRST: The name of the corporation is LITTLE PRINCE PRODUCTIONS, LTD. SECOND: That the Certificate of Incorporation was filed by the Secretary of State of New York on the 3rd day of April, 1980. THIRD: That the amendment to the Certificate of Incorporation effected by this Certificate is as follows: Paragraph FOURTH of the Certificate of Incorporation, relating to the authorized shares of the corporation, is hereby amended to change the authorized shares from two million five hundred thousand (2,500,000) shares, par value one cent ($0.01) to twenty-five million (25,000,000) shares, par value one cent ($0.01), so as to read as follows: "FOURTH: (a) The aggregate number of shares which the corporation shall have authority to issue is twenty-five million (25,000,000) shares all of which have a par value of one cent ($0.01) per share. (b) No holder of any share of the corporation shall, because of his ownership of shares have a preemptive or other right, to purchase, subscribe for or take any part or other securities convertible into or carrying options or warrants to purchase shares of the corporation issued, optioned or sold by it after its incorporation, whether the shares be authorized by this certificate of incorporation or be authorized by an amended certificate duly filed and in effect at the time of the issuance or sale of such shares or of such notes, debentures, bonds or other securities convertible into or carrying options or warrants to purchase shares of the corporation. Any part of the shares authorized by this certificate of incorporation, or by an amended certificate duly filed, and any part of the notes, debentures, bonds or other securities convertible into or carrying options or warrants to purchase shares of the corporation may at any time be issued, optioned for sale and sold or disposed of by the corporation pursuant to resolution of its Board of Directors to such persons and upon such terms and conditions as may, to such Board, seem proper and advisable without first offering to existing shareholders the said shares or the said notes, debentures, bonds or other securities convertible into or carrying options or warrants to purchase shares of the corporation, or any part of any thereof." FOURTH: That the amendment of the Certificate of Incorporation has been authorized by the board of directors and approved by a vote of the holders of a majority of all outstanding shares entitled to vote thereon at a meeting of shareholders. IN WITNESS WHEREOF, we hereunto sign our names and affirm that the statements made herein are true under the penalties of perjury, this 30th day of November, 1995. LITTLE PRINCE PRODUCTIONS, LTD. By/s/ Adrian P. Kirby --------------------- Adrian P. Kirby, Chairman of the Board, Chief Executive Officer and President By/s/ Peter N. Chapman ---------------------- Peter N. Chapman, Secretary 2 EX-3.2 4 BYLAWS EXHIBIT 3.2 Bylaws BYLAWS OF LITTLE PRINCE PRODUCTIONS, LTD. (a New York corporation) ARTICLE SHAREHOLDERS 1. CERTIFICATES REPRESENTING SHARES. Certificates representing shares shall set forth thereon the statements prescribed by Section 508, and, where applicable, by Sections 505, 616, 620, 709, and 1002, of the Business Corporation Law and by any other applicable provision of law and shall be signed by the Chairman or a Vice Chairman of the Board of Directors, if any, or by the President or a Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer and may be sealed with the corporate seal or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar other than the corporation itself or its employee. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if she were such officer at the date of its issue. A certificate representing shares shall not be issued until the full amount of consideration therefor has been paid except as Section 504 of the Business Corporation Law may otherwise permit. The corporation may issue a new certificate for shares in place of any certificate theretofore issued by it, alleged to have been lost or destroyed, and the Board of Directors may require the owner of any lost or destroyed certificate, or his legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against it on account of the alleged loss or destruction of any such certificate or the issuance of any such new certificate. 2. FRACTIONAL SHARE INTERESTS. The corporation may issue certificates for fractions of a share where necessary to effect transactions authorized by the Business Corporation Law which shall entitle the holder, in proportion to his fractional holdings, to exercise voting rights, receive dividends and participate in liquidating distributions; or it may pay in cash the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined; or it may issue scrip in registered or bearer form over the manual or facsimile signature of an officer of the corporation or of its agent, exchangeable as therein provided for full shares, but such scrip shall not entitle the holder to any rights of a shareholder except as therein provided. 3. SHARE TRANSFERS. Upon compliance with provisions restricting the transferability of shares, if any, transfers of shares of the corporation shall be made only on the shares record of the corporation by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the corporation or with a transfer agent or a registrar, if any, and on surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes due thereon. 4. RECORD DATE FOR SHAREHOLDERS. For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or the allotment of any rights, or for the purpose of any other action, the directors may fix, in advance, a date as the record date for any such determination of shareholders. Such date shall not be more than fifty days nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action. If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the date next preceding the day on which notice is given, or, if no notice is given, the day on which the meeting is held; the record date for determining shareholders for any purpose other than that specified in the preceding clause shall be at the close of business on the day on which the resolution of the directors relating thereto is adopted. When a determination of shareholders of record entitled to notice of or to vote at any meeting of shareholders has been made as provided in this paragraph, such determination shall apply to any adjournment thereof, unless directors fix a new record date under this paragraph for the adjourned meeting. 5. MEANING OF CERTAIN TERMS. As used herein in respect of the right to notice of a meeting of shareholders or a waiver thereof or to participate or vote thereat or to consent or dissent in writing in lieu of a meeting, as the case may be, the term "share" or "shares" or "shareholder" or "shareholders" refers to an outstanding share or shares and to a holder or holders of record of outstanding shares when the corporation is authorized to issue only one class of shares, and said reference is also intended to include any outstanding share or shares and any holder or holders of record of outstanding shares of any class upon which or upon whom the Certificate of Incorporation confers such rights where there are two or more classes or series of shares or upon which or upon whom the Business Corporation Law confers such rights notwithstanding that the Certificate of Incorporation may provide for more than one class or series of shares, one or more of which are limited or denied such rights thereunder. 6. SHAREHOLDER MEETINGS. TIME. The annual meeting shall be held on the date fixed, from time to time, by the directors, provided, that the first annual meeting shall be held on a date within thirteen months after the formation of the corporation, and each successive annual meeting shall be held on a date within thirteen months after the date of the preceding annual meeting. A special meeting shall be held on the date fixed by the directors except when the Business Corporation Law confers the right to fix the date upon shareholders. 2 PLACE. Annual meetings and special meetings shall be held at such place, within or without the State of New York, as the directors may, from time to time, fix. Whenever the directors shall fail to fix such place, or, whenever shareholders entitled to call a special meeting shall call the same, the meeting shall be held at the office of the corporation in the State of New York. CALL. Annual meetings may be called by the directors or by any officer instructed by the directors to call the meeting. Special meetings may be called in like manner except when the directors are required by the Business Corporation Law to call a meeting, or except when the shareholders are entitled by said Law to demand the call of a meeting. NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. Written notice of all meetings shall be given, stating the place, date and hour of the meeting, and, unless it is an annual meeting, indicating that it is being issued by or at the direction of the person or persons calling the meeting. The notice of an annual meeting shall state that the meeting is called for the election of directors and for the transaction of other business which may properly come before the meeting, and shall, (if any other action which could be taken at a special meeting is to be taken at such annual meeting) state the purpose or purposes. The notice of a special meeting shall in all instances state the purpose or purposes for which the meeting is called; and, at any such meeting, only such business may be transacted which is related to the purpose or purposes set forth in the notice. If the directors shall adopt, amend or repeal a bylaw regulating an impending election of directors, the notice of the next meeting for election of directors shall contain the statements prescribed by Section 601(b) of the Business Corporation Law. If any action is proposed to be taken which would, if taken, entitle shareholders to receive payment for their shares, the notice shall include a statement of that purpose and to that effect and shall be accompanied by a copy of Section 623 of the Business Corporation law or an outline of its material terms. A copy of the notice of any meeting shall be given, personally or by first-class mail, not less than ten days nor more than fifty days before the date of the meeting, unless the lapse of the prescribed period of time shall have been waived, to each shareholder at his record address or at such other address which he may have furnished by request in writing to the Secretary of the corporation. Notice by mail shall be deemed to be given when deposited, with postage thereon prepaid, in a post office or official depository under the exclusive care and custody of the United States post office department. If a meeting is adjourned to another time or place, and, if any announcement of the adjourned time or place is made at the meeting, it shall not be necessary to give notice of the adjourned meeting unless the directors, after adjournment, fix a new record date for the adjourned meeting. Notice of a meeting need not be given to any shareholder who submits a signed waiver of notice before or after the meeting. The attendance of a shareholder at a meeting without protesting prior to the conclusion of the meeting the lack of notice of such meeting shall constitute a waiver of notice by him. SHAREHOLDER LIST AND CHALLENGE. A list of shareholders as of the record date, certified by the Secretary or other officer responsible for its preparation or by the transfer agent, if any, shall be produced at any meeting of shareholders upon the request thereat or prior thereto of any shareholder. If the right to vote at any meeting is challenged, the inspectors of election, if any, or the person presiding thereat, shall require such list of 3 shareholders to be produced as evidence of the right of the persons challenged to vote at such meeting, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting. CONDUCT OF MEETING. Meetings of the shareholders shall be presided over by one of the following officers in the order of seniority and if present and acting - the Chairman of the Board, if any, the Vice Chairman of the Board, if any, the President, a Vice President, or if none of the foregoing is in office and present and acting, by a Chairman to be chosen by the shareholders. The Secretary of the corporation, or in his absence, an Assistant Secretary, shall act as secretary of every meeting, but if neither the Secretary nor an Assistant Secretary is present the Chairman of the meeting shall appoint a secretary of the meeting. PROXY REPRESENTATION. Every shareholder may authorize another person or persons to act for him by proxy in all matters in which a shareholder is entitled to participate, whether by waiving notice of any meeting, voting or participating at a meeting, or expressing consent or dissent without a meeting. Every proxy must be signed by the shareholder or his attorney-in-fact. No proxy shall be valid after the expiration of eleven months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the shareholder executing it, except as otherwise provided by the Business Corporation Law. INSPECTORS - APPOINTMENT. The directors, in advance of any meeting, may, but need not, appoint one or more inspectors to act at the meeting or any adjournment thereof. If an inspector or inspectors are not appointed, the person presiding at the meeting may, but need not, appoint one or more inspectors. In case any person who may be appointed as an inspector fails to appear or act, the vacancy may be filled by appointment made by the directors in advance of the meeting or at the meeting by the person presiding thereat. Each inspector, if any, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors, if any, shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result and do such acts as are proper to conduct the election or vote with fairness to all shareholders. On request of the person presiding at the meeting or any shareholder, the inspector or inspectors, if any, shall make a report in writing of any challenge, question or matter determined by him or them and execute a certificate of any fact found by him or them. QUORUM. Except for a special election of directors pursuant to Section 603(b) of the Business Corporation Law, and except as herein otherwise provided, the holders of a majority of the outstanding shares shall constitute a quorum at a meeting of shareholders for the transaction of any business. When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders. The shareholders present may adjourn the meeting despite the absence of a quorum. 4 VOTING. Each share shall entitle the holder thereof to one vote. In the election of directors, a plurality of the votes cast shall elect. Any other action shall be authorized by a majority of the votes cast except where the Business Corporation Law prescribes a different proportion of votes. 7. SHAREHOLDER ACTION WITHOUT MEETINGS. Whenever shareholders are required or permitted to take any action by vote, such action may be taken without a meeting on written consent, setting forth the action so taken, signed by the holders of all shares. ARTICLE II GOVERNING BOARD 1. FUNCTIONS AND DEFINITIONS. The business of the corporation shall be managed under the direction of a governing board, which is herein referred to as the "Board of Directors" or "directors" notwithstanding that the members thereof may otherwise bear the titles of trustees, managers or governors or any other designated title, and notwithstanding that only one director legally constitutes the Board. The word "director" or "directors" likewise herein refers to a member or to members of the governing board notwithstanding the designation of a different official title or titles. The use of the phrase "entire board" herein refers to the total number of directors which the corporation would have if there were no vacancies. 2. QUALIFICATIONS AND NUMBER. Each director shall be at least eighteen years of age. A director need not be a shareholder, a citizen of the United States, or a resident of the State of New York. The number of directors constituting the entire board shall be at least three, except that, where all the shares continue to be owned beneficially and of record by less than three shareholders, the number of directors may be less than three but not less than the number of such shareholders. Subject to the foregoing limitation and except for the first Board of Directors, such number may be fixed from time to time by action of the shareholders of or the directors, or, if the number is not so fixed, the number shall be one where there continues to be only one person who or which owns all of the shares of the corporation beneficially and of record. The number of directors may be increased or decreased by action of shareholders or of the directors, provided that any action of the directors to effect such increase or decrease shall require the vote of a majority of the entire Board. No decrease shall shorten the term of any incumbent director. 3. ELECTION AND TERM. The first Board of Directors shall be elected by the incorporator or incorporators and shall hold office until the first annual meeting of shareholders slid until their successors have been elected and qualified. Thereafter, directors who are elected at an annual meeting of shareholders, and directors who are elected in the interim by the shareholders to fill vacancies and newly created directorships, shall hold office until the next annual meeting of shareholders and until their successors have been elected and qualified; and directors who are elected in the interim by the directors to fill vacancies and newly created directorships shall hold office until the next meeting of shareholders at which the election of directors is in the regular order of business and until their successors have been elected and qualified. In the interim between annual meetings of shareholders or of special meetings of 5 shareholders called for the election of directors, newly created directorships and any vacancies in the Board of Directors, including vacancies resulting from the removal of directors for cause or without cause, may be filled by the vote of the remaining directors then in office, although less than a quorum exists. 4. MEETINGS. TIME. Meetings shall be held at such time as the Board shall fix, except that the first meeting of a newly elected Board shall be held as soon after its election as the directors may conveniently assemble. PLACE. Meetings shall be held at such place within or without the State of New York as shall be fixed by the Board. CALL. No call shall be required for regular meetings for which the time and place have been fixed. Special meetings may be called by or at the direction of the Chairman of the Board, if any, of the President, or of a majority of the directors in office. NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required for regular meetings for which the time and place have been fixed. Written, oral or any other mode of notice of time and place shall be given for special meetings in sufficient time for the convenient assembly of the directors thereat. The notice of any meeting need not specify the purpose of the meeting. Any requirement of furnishing a notice shall be waived by any director who signs a waiver of notice before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to him. QUORUM AND ACTION. A majority of the entire Board shall constitute a quorum except when a vacancy or vacancies prevents such majority, whereupon a majority of the directors in office shall constitute a quorum, provided such majority shall constitute at least one-third of the entire Board. A majority of the directors present, whether or not a quorum is present, may adjourn a meeting to another time and place. Except as herein otherwise provided, the act of the Board shall be the act, at a meeting duly assembled, by vote of a majority of the directors present at the time of the vote, a quorum being present at such time. Any one or more members of the Board of Directors or of any committee thereof may participate in a meeting of said Board or of any such committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time, and participation by such means shall constitute presence in person at the meeting. CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if present and acting, shall preside at all meetings. Otherwise, the President, if present and acting, or any other director chosen by the Board, shall preside. 6 5. REMOVAL OF DIRECTORS. Any or all of the directors may be removed for cause or without cause by the shareholders. One or more of the directors may be removed for cause by the Board of Directors. 6. COMMITTEES. Whenever the Board of Directors shall consist of more than three members, the Board of Directors, by resolution adopted by a majority of the entire Board of Directors, may designate from their number three or more directors to constitute an Executive Committee and other committees, each of which, to the extent provided in the resolution designating it, shall have the authority of the Board of Directors with the exception of any authority the delegation of which is prohibited by Section 712 of the Business Corporation Law. 7. WRITTEN ACTION. Any action required or permitted to be taken by the Board of Directors or by any committee thereof maybe taken without a meeting if all of the members of the Board of Directors or of any committee thereof consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the Board of Directors or of any such committee shall be filed with the minutes of the proceeding of the Board of Directors or of any such committee. ARTICLE III OFFICERS The directors may elect or appoint a Chairman of the Board of Directors, a President, one or more Vice Presidents, a Secretary, one or more Assistant Secretaries, a Treasurer, one or more Assistant Treasurers, and such other officers as they may determine. The President may but need not be a director. Any two or more offices may be held by the same person except the offices of President and Secretary; or, when all of the issued and outstanding shares of the corporation are owned by one person, such person may hold all or any combination of offices. Unless otherwise provided in the resolution of election or appointment, each officer shall hold office until the meeting of the Board of Directors following the next annual meeting of shareholders and until his successor has been elected and qualified. Officers shall have the powers and duties defined in the resolutions appointing them. The Board of Directors may remove any officer for cause or without cause. ARTICLE IV STATUTORY NOTICES TO SHAREHOLDERS The directors may appoint the Treasurer or other fiscal officer and/or the Secretary or any other officer to cause to be prepared and furnished to shareholders entitled thereto any special financial notice and/or any financial statement, as the case may be, which may be 7 required by any provision of law, and which, more specifically, may be required by Sections 510, 511, 515, 516, 517, 519 and 520 of the Business Corporation Law. ARTICLE V BOOKS AND RECORDS The corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of the shareholders, of the Board of Directors, and/or any committee which the directors may appoint, and shall keep at the office of the corporation in the State of New York or at the office of the transfer agent or registrar, if any, in said state, a record containing the names and addresses of all shareholders, the number and class of shares held by each, and the dates when they respectively became the owners of record thereof. Any of the foregoing books, minutes or records may be in written form or in any other form capable of being converted into written form within a reasonable time. ARTICLE VI CORPORATE SEAL The corporate seal, if any, shall be in such form as the Board of Directors shall prescribe. ARTICLE VII FISCAL YEAR The fiscal year of the corporation shall be fixed, and shall be subject to change from time to time, by the Board of Directors. ARTICLE VIII CONTROL OVER BYLAWS The shareholders entitled to vote in the election of directors or the directors upon compliance with any statutory requisite may amend or repeal the Bylaws and may adopt new Bylaws, except that the directors may not amend or repeal any Bylaw or adopt any new Bylaw, the statutory control over which is vested exclusively in the said shareholders or in the incorporators. Bylaws adopted by the incorporators or directors may be amended or repealed by the said shareholders. 8 EX-27 5 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994 AND THE CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS CONTAINED IN REGISTRANT'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995. 1 U.S. DOLLARS 12-MOS DEC-31-1995 JAN-01-1995 DEC-31-1995 1 946 0 6,629 0 0 8,187 0 0 16,915 284,326 0 0 0 249,992 (517,403) 16,915 0 20,779 0 125,726 0 0 0 (104,947) 0 (104,947) 0 0 0 (104,947) (.04) (.04)
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