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EXHIBIT 2(a)
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
XXX XXXXXXXX PRODUCTIONS, INC.
AND
MEDHEALTH IMAGING, INC.
Dated as of August 1, 1995
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TABLE OF CONTENTS
ARTICLE I
PRELIMINARY MATTERS
SECTION
1.1. Formation of Wholly-Owned JFP Subsidiary........................................................2
1.2. Reverse Split of JFP Common Stock...............................................................2
ARTICLE II
THE MERGER
SECTION
2.1. Meeting of JFP's Stockholders...................................................................3
2.2. The Merger......................................................................................3
2.3. Conversion of Outstanding Shares................................................................5
2.4. Voting Rights...................................................................................6
2.5. By-laws........................................................................................10
2.6. Directors and Officers.........................................................................10
2.7. Stock Transfer Books...........................................................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF MEDHEALTH
SECTION
3.1. Due Organization; Power; Qualification, etc....................................................10
3.2. Authorization and Validity of Agreement........................................................11
3.3. No Conflict or Violation.......................................................................11
3.4. Consents and Approvals.........................................................................12
3.5. Capitalization.................................................................................13
3.6. Restrictions on Disposition....................................................................13
3.7. Nature of Business.............................................................................14
3.8. Financial Statements; No Material Adverse Change...............................................14
3.9. Title to Properties............................................................................15
3.10. Party to Agreements............................................................................15
3.11. Other Agreements, Leases, Joint Ventures, etc..................................................15
3.12. Litigation.....................................................................................16
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3.13. Tax Matters....................................................................................16
3.14. Operations in Ordinary Course..................................................................16
3.15. Negative Covenants.............................................................................16
3.16. Records Service................................................................................17
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF JFP
SECTION
4.1. Due Organization; Power; Qualification, etc....................................................17
4.2. Authorization and Validity of Agreement........................................................17
4.3. Vote of MII Shareholders.......................................................................18
4.4. Completion of Preliminary Matters..............................................................18
4.5. No Conflict or Violation.......................................................................19
4.6. Consents and Approvals.........................................................................19
4.7. Capitalization.................................................................................20
4.8. Shares.........................................................................................20
4.9. Financial Statements; No Material Adverse Change...............................................20
4.10. Title to Properties............................................................................21
4.11. Party to Agreements............................................................................22
4.12. Other Agreements, Leases, Joint Ventures, etc..................................................22
4.13. Litigation.....................................................................................22
4.14. Tax Matters....................................................................................23
4.15. SEC Form 10-Q's and Form 10-K's................................................................23
ARTICLE V
COVENANTS OF JFP
SECTION
5.1. Conduct of JFP.................................................................................23
5.2. Access to Information..........................................................................25
5.3. Vote...........................................................................................25
ARTICLE VI
COVENANTS OF MEDHEALTH
SECTION
6.1. Conduct of Medhealth...........................................................................26
6.2. Access to Information..........................................................................26
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ARTICLE VII
OTHER AGREEMENTS
SECTION
7.1. Best Efforts...................................................................................27
7.2. Notification of Certain Matters................................................................27
7.3. Further Assurances.............................................................................28
7.4. Payment of Existing Liabilities................................................................28
7.5. Payment of Expenses............................................................................29
7.6. Finders and Consultants........................................................................30
7.7. Conditions Subsequent to Merger................................................................30
7.8. NASDAQ Listing.................................................................................31
7.9. JFP Venture with Sports Heroes, Inc............................................................32
7.10. Xxx Xxxxxxxx...................................................................................32
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION
8.1. Conditions to the Obligations of Each Party....................................................33
8.2. Conditions to the Obligation of JFP............................................................33
8.3. Conditions to the Obligation of Medhealth......................................................36
ARTICLE IX
TERMINATION
SECTION
9.1. Termination....................................................................................39
9.2. Effect of Termination..........................................................................40
ARTICLE X
MISCELLANEOUS
SECTION
10.1. Notices........................................................................................40
10.2. Survival.......................................................................................41
10.3. Amendment......................................................................................41
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10.4. Waiver.........................................................................................41
10.5. Successors and Assigns.........................................................................42
10.6. Governing Law..................................................................................42
10.7. Integration....................................................................................42
10.8. Headings and References........................................................................42
10.9. Counterparts; Effectiveness....................................................................43
SIGNATURES43
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of August 1, 1995, (this
"Agreement") by and among XXX XXXXXXXX PRODUCTIONS, INC., a Nevada corporation
("JFP") and MEDHEALTH IMAGING, INC., a Florida corporation ("Medhealth").
WHEREAS, JFP is a corporation duly organized and in good standing under
the laws of the State of Nevada, having been incorporated on January 14, 1987
under the name "Asset Development Corporation", and Xxx Xxxxxxxx Productions,
Inc., a Delaware corporation organized on June 26, 1987 having merged into Asset
Development Corporation and Asset Development Corporation having then changed
its name to Xxx Xxxxxxxx Productions, Inc.; and
WHEREAS, Medhealth is a corporation duly organized and in good standing
under the laws of the State of Florida having been incorporated on February 8,
1993, and was a wholly owned subsidiary of Medhealth Service Corporation, a
Nevada corporation until October 1, 1993 when Medhealth was spun-off from
Medhealth Service Corporation; and
WHEREAS, the parties hereto desire to effect the Merger of Medhealth
with and into a wholly owned subsidiary corporation of JFP to be formed in the
State of Nevada as hereinafter provided, on the terms and conditions hereinafter
set forth and in accordance with the applicable laws of the State of Nevada and
of the State of Florida; and
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WHEREAS, the Board of Directors of each of JFP and Medhealth have
determined that the Merger contemplated hereby is fair to and in the best
interests of JFP and its shareholders and Medhealth and its shareholders;
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
PRELIMINARY MATTERS
SECTION 1.1. Formation of Wholly-Owned JFP Subsidiary. Upon execution
of this Agreement, JFP will take all action necessary and cause the
incorporation in Nevada of a new wholly owned subsidiary corporation of JFP to
be named (if available) "Medhealth Imaging, Inc. ("MII") whose Board of
Directors will ratify the Merger and the approval and adoption of this
Agreement. MII shall be authorized to issue 1,000 shares of common stock of the
par value of $.001 per share of which 100 shares shall be duly issued and
outstanding in the name of JFP at the Effective Time of the Merger.
SECTION 1.2. Reverse Split of JFP Common Stock. At the Effective Time
of the Merger, JFP shall have completed a one for thirty-five (1:35) reverse
split of all issued and outstanding shares of common stock so, as a result of
the reverse split, the total number of issued and outstanding shares of common
stock of JFP, inclusive of the shares of common stock underlying the issued and
outstanding warrants, will be approximately 705,823.
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ARTICLE II
THE MERGER
SECTION 2.1. Meeting of JFP's Stockholders. JFP will take all action
necessary in accordance with applicable law to convene a meeting of its
stockholders (the "Special Meeting") as promptly as practicable after the date
hereof to consider and vote upon the Merger. The Board of Directors of JFP,
subject to its fiduciary duties as advised by counsel, will recommend that JFP's
stockholders vote in favor of the Merger and the approval and adoption of this
Agreement.
SECTION 2.2. The Merger. (a) At the Effective Time, the Merger shall
occur in accordance with the Nevada Revised Statutes of the State of Nevada
("Nevada Law") whereupon the separate existence of Medhealth shall cease,
Medhealth shall be merged into MII and MII shall be the surviving corporation
(the "Surviving Corporation").
(b) When the Merger has been effected, the Surviving Corporation shall
thereupon and thereafter possess all the rights, privileges, immunities and
franchises of a public as well as of a private nature, of Medhealth and MII (the
"Constituent Corporations"); all property, real, personal and mixed, and all
debts due on whatever account and all choses in action, and all and every other
interest, of or belonging to or due each of the Constituent Corporations shall
be vested in the Surviving Corporation without further act or deed; and the
title to any real estate, or any interest therein, vested in Medhealth and MII
or the Surviving Corporation shall not revert or be in any way impaired by
reason of the Merger. The Surviving Corporation shall thenceforth be responsible
and liable for all the liabilities and obligations of each of the Constituent
Corporations so merged; any claim existing or action or proceeding pending by or
against any of the Constituent Corporations
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may be prosecuted as if the Merger had not taken place, or the Surviving
Corporation may be substituted in its place. The Surviving Corporation shall
have all the rights, privileges, immunities and powers and shall be subject to
all the duties and liabilities of a corporation organized under the laws of the
State of Nevada; and neither the rights of creditors nor any liens upon the
respective properties of the Constituent Corporations and the Surviving
Corporation shall be impaired by the Merger; all with the effect set forth in
the law of the State of Nevada.
(c) As soon as practicable after all of the conditions set forth herein
have been satisfied or waived, JFP, Medhealth and MII will file, or cause to be
filed, with the Secretary of State of the State of Nevada a certificate of
merger for the Merger in accordance with Nevada Law (the "Certificate of
Merger"). The Merger shall become effective at the time such filing is made or
at such other time as is set forth in the Certificate of Merger (the "Effective
Time").
(d) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, powers and franchises and be subject to all
of the restrictions, disabilities and duties of Medhealth and MII, all as
provided under Nevada Law.
(e) The laws which are to govern MII as the Surviving Corporation are
Nevada Law. The certificate of incorporation of the Surviving Corporation shall
be the certificate of incorporation of MII, and the by-laws of the Surviving
Corporation shall be the by-laws of MII, until the same shall be further amended
or altered in accordance with the provisions thereof and Nevada Law.
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SECTION 2.3. Conversion of Outstanding Shares.
(a) At the Effective Time:
(i) Each share of the common stock, par value $.001 per share,
of Medhealth issued and outstanding on the Effective Time of the Merger shall,
by virtue of the Merger, and without any further consideration, automatically be
converted into and become .68392 (sixty-eight and three hundred ninety-two one
hundredth) of a share of the common stock, par value $.001 per share, of JFP. No
fractional shares will be issued and all share amounts will be rounded to the
next lowest whole number.
(ii) Prior to the Effective Time of the Merger, each holder of
an outstanding certificate representing shares of Medhealth common stock shall
deliver same, together with an investment letter in the form annexed hereto as
Exhibit "A" to counsel for Medhealth who shall hold same in escrow, and, upon
said counsel's receipt of certificates representing at least 80% of the issued
and outstanding common stock of Medhealth, together with investment letters
signed by the holders thereof, he shall deliver and surrender same to JFP, or an
agent appointed by it, and thereafter, upon the Effective Time of the Merger,
such holder shall be entitled to receive in exchange therefore a certificate
representing the number of shares of common stock of JFP into which the shares
of Medhealth, theretofore represented by the certificate so surrendered, shall
have been converted and changed. It shall be condition to such delivery that the
certificates so surrendered shall be properly endorsed or be otherwise in proper
form for transfer and that the person requesting such delivery shall pay any
required transfer or other taxes.
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(iii) All authorized shares of common stock of MII, whether
issued or unissued, shall continue unchanged as shares of common stock of the
Surviving Corporation, and all authorized shares of common stock of JFP, whether
issued before or, as contemplated hereby, after the Effective Time of the Merger
shall continue unchanged as shares of common stock of JFP.
SECTION 2.4. Voting Rights. (a) In accordance with the laws of the
State of Nevada and of the State of Florida, the holder of each share of the
common stock of Medhealth and MII is entitled to vote upon the adoption of this
Agreement of Merger and Plan of Reorganization, each such share being entitled
to one (1) vote. The approval of the holders of a majority of the outstanding
shares of common stock of Medhealth and of the holders of a majority of the
outstanding shares of common stock of MII, is required. Notwithstanding that all
outstanding common stock of MII shall be held by JFP, it is agreed that the
shareholders of JFP shall be entitled to vote upon the matters herein set forth,
and that the vote of the holders of a majority of the outstanding shares of
common stock of JFP shall be required.
(b) Special Meetings of the shareholders of Medhealth, JFP and MII
shall be called and held in accordance with the laws of their respective states
of incorporation as soon as may be practicable after the execution of this
Agreement for the purpose of voting upon the approval and adoption of this
Agreement.
(c) JFP shall include in its notice to its shareholders of the Special
Meeting that the purposes of the meeting are (1) to authorize its Officers to
execute and file a Certificate of Amendment of its Certificate of Incorporation
whereby the name Xxx Xxxxxxxx Productions, Inc. shall
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be changed (if available) to Universal Medical Systems, Inc.; (2) to authorize a
one for thirty-five (1:35) reverse split of all issued and outstanding shares of
common stock resulting in a pro-rata reduction of the number of the issued and
outstanding shares; and (3) to adopt and approve this Agreement of Merger and
Plan of Reorganization.
(d) Medhealth shall include in its notice to its shareholders of the
Special Meeting to be called to consider the adoption of this Agreement that
all shares of common stock of JFP to be received by them hereunder in exchange
for their shares of common stock of Medhealth is to be received and acquired,
and shall be deemed upon the Effective Time of the Merger, to have been
acquired for investment purposes only and not for the purpose of resale or with
a view to the distribution of any thereof. Each shareholder of Medhealth shall
be notified that he shall be required to execute and deliver, together with his
outstanding stock certificate, an investment letter, in form and substance
satisfactory to JFP and its counsel, and in the form annexed hereto as Exhibit
"A", in which such shareholder represents that the shares of JFP common stock
that such shareholder will receive upon consummation of the Merger are not
being acquired with a view to the distribution thereof, and agrees not to sell,
transfer or otherwise dispose of any interest in such shares except in
compliance with the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, and unless and until there shall be an
effective registration statement covering such sale, transfer or other
disposition, or JFP shall have received either an opinion of its counsel or an
opinion of counsel satisfactory to JFP to the effect that any such proposed
sale, transfer or other disposition may be effected without such violation.
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Further, each shareholder of Medhealth shall be notified that each
certificate representing capital stock of JFP to be issued pursuant to this
Agreement shall bear on its face a legend in substantially the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933. The shares have been acquired for
investment and may not be sold, transferred of assigned in the absence
of an effective registration statement for these shares under the
Securities Act of 1933 or an opinion of the Company's counsel that
registration is not required under such Act."
(e) Notwithstanding the provisions of this Agreement, shareholders of
JFP, Medhealth and MII who have not voted in favor of the Merger or consented
thereto in writing and have demanded appraisal rights, shall have all such
appraisal rights or dissenting shareholder rights as may be provided under the
laws of the respective states of incorporation, and the respective Directors
and Officers of the corporations hereto shall do all things required by said
laws to notify said shareholders of their respective appraisal rights.
Accordingly, and notwithstanding the provisions of Section "2.3. (a)(i)
of Article II", shares of common stock of Medhealth held by any shareholder of
Medhealth who shall have advised Medhealth of his dissent, and who shall have
perfected his appraisal rights as a dissenting shareholder pursuant to the laws
of the State of Florida and who, at the Effective Time of the Merger, shall not
have withdrawn such notice, shall not be deemed to receive shares of JFP, and
shall not be entitled to the rights, privileges or participation thereof or to
JFP common shares. If
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after the Effective Time such holder fails to perfect or withdraws or loses his
right to appraisal, such common shares shall thereupon be deemed to have been
converted into and to represent the right to receive, at the Effective Time, the
shares of common stock of JFP pursuant to the terms of subsection (a)(i) of this
Section 2.3, without any interest thereon or addition thereto. Medhealth shall
give JFP prompt notice of any demands received by Medhealth for appraisal of
shares, and JFP shall have the right to participate in all negotiations and
proceedings with respect to such demands. Medhealth shall not, except with the
prior written consent of JFP, make any payment with respect to, or settle or
offer to settle, any such demands.
(f) If this Agreement is approved and adopted by the shareholders of
Medhealth, JFP and MII, as provided herein, that fact shall be certified on
this Agreement by the Secretary of each of Medhealth, JFP and MII, and this
Agreement so adopted, approved, certified, executed and acknowledged by and on
behalf of Medhealth, JFP and MII shall, if the Merger is not abandoned or
terminated as herein permitted, be submitted for filing and recording in
accordance with Nevada Law and as may be required under the laws of the State
of Florida.
(g) This Agreement shall become effective on the date and at the time
when this Agreement, duly certified, signed, sealed and acknowledged, is filed
in the office of the Secretary of State of the State of Nevada and becomes
effective pursuant of Nevada Law. Counsel for Medhealth, JFP and MII shall
mutually agree upon the date and time on which this Agreement shall be
submitted for filing to the Secretary of State of State of Nevada, which date
shall be no later than thirty (30) days after the requisite shareholder
approvals have been obtained, unless further extended by mutual agreement.
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(vii) take any other action that would cause any of
the representations and warranties made in this Agreement not to remain true
and correct; or
(viii) commit itself to do any of the foregoing.
SECTION 5.2. Access to Information. From and after the date hereof and
subject to the execution of such confidentiality agreements as JFP shall
reasonably require, JFP will give Medhealth and its counsel, financial advisors,
auditors and other authorized representatives reasonable access to the offices,
properties, books and records of JFP and will instruct JFP's employees, counsel,
financial advisors and financing sources to cooperate with any such person in
its investigation of JFP.
SECTION 5.3. Vote. From and after the date hereof, JFP will, to the
extent required by applicable law or as otherwise reasonably requested by
Medhealth and in accordance with Nevada Law and its certificate of incorporation
and By-laws, use its efforts to take all action necessary or helpful to secure a
vote of shareholders in favor of the Merger and to approve this Agreement.
ARTICLE VI
COVENANTS OF MEDHEALTH
Medhealth agrees that:
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SECTION 6.1. Conduct of Medhealth. From and after the date of this
Agreement and until the Effective Time, Medhealth shall conduct its business
solely in the ordinary course consistent with past practice and, without the
prior written consent of JFP, will not, except as required or permitted pursuant
to the terms hereof or as may occur in the ordinary course of business
consistent with past practice:
(i) make any change in its Certificate of Incorporation; or
(ii) take any other action that would cause any of the
representations and warranties made in this Agreement not to remain true and
correct; or
(iii) commit itself to do any of the foregoing.
SECTION 6.2. Access to Information. From and after the date hereof and
subject to the execution of such confidentiality agreements as Medhealth shall
reasonably require, Medhealth will give JFP and its counsel, financial advisors,
auditors and other authorized representatives reasonable access to the offices,
properties, books and records of Medhealth and will instruct Medhealth's
employees, counsel, financial advisors and financing sources to cooperate with
any such person in its investigation of Medhealth.
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ARTICLE VII
OTHER AGREEMENTS
The parties hereto agree that:
SECTION 7.1. Best Efforts. Upon the terms and subject to the conditions
set forth in this Agreement, each party shall use its best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement as promptly as
possible.
SECTION 7.2. Notification of Certain Matters. Each party to this
Agreement will give prompt notice to the other parties hereof of:
(i) any notice or other communication from any person or
entity alleging that the consent of such person or entity is or may be required
in connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental
or regulatory agency or authority in connection with the transactions
contemplated by this Agreement;
(iii) any action, suit, claim, investigation or proceeding
commenced or, to its knowledge, threatened against, relating to or involving or
otherwise affecting JFP on the one hand, or Medhealth on the other hand, which
is reasonably likely to affect materially the transactions contemplated by this
Agreement;
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(iv) the occurrence, or failure to occur, of any event or
change in circumstances where such occurrence or failure to occur would be
likely to cause any representation or warranty contained in this Agreement to be
untrue and inaccurate in any material respect at any time from the date hereof
to the Effective Time; and
(v) any material failure of such party to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder.
No such notification shall affect the representations or warranties of the
parties or the conditions to the obligations of the parties hereunder.
SECTION 7.3. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of Medhealth or MII, any deeds,
bills of sale, assignments or assurances and to take and do in the name and on
behalf of Medhealth or MII any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Corporation any and all right,
title and interest in, to and under any of the rights, properties or assets of
Medhealth acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger.
SECTION 7.4. Payment of Existing Liabilities. JFP has certain existing
liabilities in the amount of $21,514.13 enumerated in Exhibit "F" annexed hereto
(the "Enumerated Liabilities") which taken together with estimated additional
existing liabilities not exceeding $40,000 in amount (the "Additional
Liabilities") constitutes, to the best knowledge of JFP, all of JFP's
liabilities as of
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the date hereof. As additional consideration for the conversion of the issued
and outstanding shares of common stock of Medhealth into common shares of JFP,
Medhealth has agreed to pay all of the Enumerated Liabilities on or prior to the
Effective Time of the Merger with the exception that concurrently herewith
payment of the following Enumerated Liabilities shall be made: (1) $2,000 to
Xxxxxx X. Xxxxxx, C.P.A. (2) $1,670 to Lehman, Newman, Xxxxx & Xxxxx and (3)
$5,562.75 to American Stock Transfer & Trust Company. All of such payments are
non-refundable and non-reimbursable whether or not the Merger is consummated.
SECTION 7.5. Payment of Expenses. In connection with the transactions
contemplated by this Agreement and whether or not the Merger is consummated,
from and after the date hereof and without the execution of any further
instrument, Medhealth will pay (1) all attorney's fees of JFP's counsel, Doros &
Brescia, P.C. ("D&B") which shall not exceed $25,000 in amount plus all
disbursements incurred payable upon billing of which $10,000 has heretofore been
paid by Medhealth to D&B, (2) all accountant's fees of JFP's accountant(s) to be
selected for the preparation of the required JFP Form 10-Q's and Form 10-K's and
all tax returns which shall not exceed $10,000 in amount of which $2,000 shall
be paid by Medhealth concurrently herewith and the balance upon billing after
completion of the work and (3) all miscellaneous expenses including blue sky
fees in connection with the transactions contemplated herein. In addition,
concurrently herewith Medhealth shall pay to Xxx Xxxxx, Xxxxxxxx Xxxxxxx &
Company, the sum of $3,500 for the balance of consulting fees due and payable to
date and $750 to Doros & Brescia, P.C. on account of expenses to be advanced by
them.
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SECTION 7.6. Finders and Consultants. (a) This Agreement is made, and
the negotiations leading to it were initiated with the assistance of both Xx.
Xxx Xxxxx and Xx. Xxxxxx X. Xxxxxxx (the "Consultants"). In consideration for
consulting services rendered in connection with the transactions contemplated
herein and after taking into effect the dilution of the common shares as a
result of the proposed reverse split and subsequent thereto Xx. Xxx Xxxxx
("Vahab") will receive 235,274 shares and Xx. Xxxxxx X. Xxxxxxx ("Brescia") will
receive 188,219 shares of the fully paid and nonassessable common stock of JFP
(collectively the "Consulting Fee Shares").
(b) The Consulting Fee Shares shall be included in a Form S-8
Registration Statement (the "Registration Statement") with Vahab and Brescia as
selling shareholders to be prepared by JFP and filed by JFP with the SEC within
ninety (90) days from the Effective Time of the Merger and JFP will use its best
efforts to have such Registration Statement declared effective until the earlier
of when all of the Consulting Fee Shares are sold or become capable of being
publicly sold without registration under the 1933 Act. All expenses incurred in
such registration shall be paid by JFP including, without limitation, printing
expenses, fees and disbursements of counsel for Medhealth, expenses of any
audits to which Medhealth shall agree or which shall be necessary to comply with
registration requirements, all registration and filing fees under federal and
state laws.
SECTION 7.7. Conditions Subsequent to Merger. If required, no later
than fifteen (15) days after the Effective Time of the Merger counsel for
Medhealth shall cooperate with and assist counsel for JFP and MII in the
preparation and filing with the Securities and Exchange Commission, of Form D,
to be filed pursuant to Regulation D promulgated under Section 3(b) of the
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Securities Act of 1933, as amended, in said counsels' joint reliance upon the
exemption from registration requirements afforded with respect to Regulation D
and the securities of JFP to be issued hereunder; and in all other respects said
counsel shall cooperate with each other in order to insure that the provisions
and intent of this Agreement are carried out.
SECTION 7.8. NASDAQ Listing. Both JFP and Medhealth acknowledge that it
is the intent of both parties that, following completion of the acquisition
described herein, the directors and officers of JFP will pursue immediately all
steps required to make application to NASDAQ and or the American Stock Exchange
("Amex") so the shares of common stock of JFP may be traded on the NASDAQ and/or
the Amex exchange. Thirty (30%) percent of the 3,576,170 shares of JFP common
stock to be issued to the Medhealth shareholders hereunder constituting
1,072,851 common shares (the "JFP/Medhealth Escrowed Shares") shall be held in
escrow with stock power signature guaranteed with Doros & Brescia, P.C. as
escrow agent. In the event that on or prior to two years from the date of
closing of the transactions contemplated herein the shares of common stock of
JFP are approved, listed and trading on NASDAQ and/or the Amex as required
hereinabove (or such other association or exchange as may be mutually agreed in
writing between all of the respective parties hereto), the JFP/Medhealth
Escrowed Shares shall be returned to the holders thereof. In the event that the
NASDAQ and/or Amex approval, listing and trading does not occur on or prior to
the expiration of such two year period, the Medhealth Escrowed Shares shall be
released from escrow and delivered to JFP for cancellation and reissuance to the
pre-acquisition shareholders of JFP. During the first two years following the
Effective Time of the Merger no additional shares of common stock including,
without limitation, warrants, options or any other securities convertible into
common shares shall be issued without the written consent of JFP's consultant,
Xxxxxxxx
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Xxxxxxx & Company, Inc. ("JD"). During such period, the record holders, not the
escrow agent, shall have the right to vote the JFP/Medhealth Escrowed Shares.
SECTION 7.9. JFP Venture with Sports Heroes, Inc. Medhealth
acknowledges that it has been advised that King of Nostalgia, Inc., a New York
corporation and wholly-owned subsidiary of JFP, and Entertainment Heroes, Ltd.,
a Delaware corporation and wholly-owned subsidiary of Sports Heroes, Inc.
("SHI"), are the general partners of Entertainment Legends, L.P., a New Jersey
limited partnership with JFP, SHI and Xxxxxxxx X. Xxxxxxxxx ("Xxxxxxxxx") as its
limited partners, all as more fully set forth in agreements annexed hereto as
Exhibit "F" including a finders fee agreement between JFP and Xxxxxxxxx
(concerning the JFP venture with SHI (the "Finders Fee Agreement"). Arising out
of such agreements there is issued and outstanding in the name of JFP share
certificate No. 523 for 87,404 restricted common shares of SHI of which 15,000
SHI common shares are in the process of being transferred by JFP to Xxxxxxxxx as
payment, in part, of his finders fee pursuant to the Finders Fee Agreement
which, when completed, will leave JFP a share balance of 72,404.
SECTION 7.10. Xxx Xxxxxxxx. Medhealth acknowledges that it has been
advised that by letter dated October 5, 1994, Xxx Xxxxxxxx tendered his
resignation as an officer and director of JFP and has requested that JFP change
its name by dropping the name "Xxx Xxxxxxxx". Medhealth further acknowledges
that Xxx Xxxxxxxx is a party to an Employment Agreement dated September 25,
1992, between JFP and Xxx Xxxxxxxx, a copy of which is annexed hereto as Exhibit
"G". In lieu of $3,846.20 in salary arrears due under the Employment Agreement
from JFP to Xxx Xxxxxxxx for the period March 25, 1993 to August 11, 1993, both
dates inclusive, in consideration of payment thereof
-32-
23
JFP issued to Xxx Xxxxxxxx Warrant No. 101 to purchase on or after August 12,
1993, and on or prior to July 31, 1998, but not thereafter, an aggregate of
600,000 shares of common stock of JFP at a purchase price of $.75 (75(cent)) per
share. Since August 11, 1993, no salary payments have been made to Xxx Xxxxxxxx.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.1. Conditions to the Obligations of Each Party. The
obligations of JFP and Medhealth to consummate the Merger are subject to (a) the
approval of the Merger and this Agreement at the Special Meeting by the
affirmative vote of at least the holders of a majority of the Shares outstanding
on the record date of such Special Meeting; (b) the absence of any statute, rule
or regulation which makes consummation of the Merger illegal or otherwise
prohibited or any order, decree, injunction or judgment enjoining the
consummation of the Merger, and (c) the receipt of an opinion of counsel to JFP,
in form and substance reasonably satisfactory to JFP and Medhealth, as to the
validity of the Merger under Florida and Nevada Law.
SECTION 8.2. Conditions to the Obligation of JFP. The obligation of JFP
to consummate the Merger is subject to the satisfaction or waiver of the
following further conditions:
(a) Medhealth shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Effective Time;
-33-
24
(b) the representations and warranties of Medhealth contained in this
Agreement and in any certificate or other writing delivered by Medhealth
pursuant hereto shall be true in all material respects at and as of the
Effective Time as if made at and as of such time (other than any inaccuracies in
such representations or warranties that are attributable to JFP);
(c) receipt by JFP of a certificate signed by an executive officer of
Medhealth to the effect set forth in paragraphs (a) and (b) of this Section; and
(d) no action or proceeding shall have been commenced or threatened for
the purpose of obtaining an injunction, order or damages before any court or
governmental agency or other regulatory or administrative agency or commission,
domestic or foreign, which JFP shall on advice of counsel, reasonably determine
would (1) result in the imposition of material limitations on the ability of JFP
or Medhealth effectively to consummate the Merger, (2) have the effect of
rendering the Merger violative of any applicable law, or (3) have a material
adverse effect on the business, assets or financial condition of the Surviving
Corporation.
(e) there shall have been delivered to JFP and MII the opinion of
counsel for Medhealth, satisfactory in form and substance to counsel for JFP and
MII, to the effect that (1) Medhealth is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Florida being the
state of its incorporation and has the corporate power to own its property and
to carry on its business as presently being conducted and has qualified to
transact business in all other states requiring qualification therein, (2) that
all necessary corporate proceedings of Medhealth as set forth herein have been
duly taken to authorize and enable the
-34-
25
Merger and the exchange of the shares provided for herein, (3) that this
Agreement has been duly executed and delivered by the Directors of Medhealth and
has been approved and adopted by the holders of at least a majority of the
outstanding shares of common stock of Medhealth at a Special Meeting duly called
for such purpose, and therefore constitutes the legal, valid and binding
obligation of Medhealth in accordance with its terms, (4) that this Agreement
does not, and the carrying out of the transactions herein provided for will not,
to the best of such counsel's knowledge, violate or conflict with any statute,
charter or their corporate restriction to which Medhealth is subject or any
agreement or instrument to which Medhealth is a part or by which it is bound,
(5) that the delivery of the shares of common stock of JFP to the shareholders
of Medhealth pursuant to this Agreement is exempted from the registration
requirements under the Securities Act of 1933, as amended, by reasons of the
applicability of Section 4(2) of the Act and/or Regulation D promulgated under
Section 3(b) of the Act, and (6) that the transactions herein provided for will
not result in the recognition of taxable gain to the shareholders of Medhealth
or to Medhealth upon the transfer of their stock of Medhealth in exchange solely
for stock of JFP, nor in the recognition of taxable gain to JFP, MII, or their
shareholders upon said transfer, by reasons of the transaction qualifying as a
tax-free reorganization under the Internal Revenue Code of 1954, as amended.
(f) counsel for JFP and MII, and counsel for Medhealth, shall have
mutually determined that the provisions of the Blue Sky Laws of the various
jurisdictions herein the shareholders of Medhealth reside have been complied
with, or shall have received "no-action letters", or shall have otherwise
determined and/or filed with such jurisdictions all such documents and paid all
such fees required in order to obtain an exemption from the registration
requirements
-35-
26
of the various jurisdictions, and shall have delivered to the parties hereto
their written opinion to such effect.
(g) counsel for JFP and MII and counsel for Medhealth shall have
determined the delivery of the shares of common stock to JFP to the shareholders
of Medhealth pursuant to this Agreement is exempted from registration afforded
under Rule 505 of Regulation D promulgated under Section 3(b) of the Securities
Act of 1933, as amended.
SECTION 8.3. Conditions to the Obligation of Medhealth. The obligation
of Medhealth to consummate the Merger is subject to the satisfaction or waiver
of the following further conditions:
(a) JFP shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Effective Time;
(b) the representations and warranties of JFP contained in this
Agreement and in any certificate or other writing delivered by JFP pursuant
hereto shall be true in all material respects at and as of the Effective Time as
if made at and as of such time;
(c) receipt by Medhealth of a certificate signed by an executive
officer of JFP to the effect set forth in paragraphs (a) and (b) of this
Section;
-36-
27
(d) the holders of not more than 5% of the outstanding shares of common
stock shall have exercised their appraisal rights in the Merger in accordance
with Florida and Nevada Law;
(e) no action or proceeding shall have been commenced or threatened for
the purpose of obtaining an injunction, order or damages before any court or
governmental agency or other regulatory or administrative agency or commission,
domestic or foreign, which Medhealth shall on advice of counsel, reasonably
determine would (1) result in the imposition of material limitations on the
ability of JFP or Medhealth effectively to consummate the Merger, (2) have the
effect of rendering the Merger violative of any applicable law, or (3) have a
material adverse effect on the business, assets or financial condition of the
Surviving Corporation.
(f) there shall have been delivered to counsel for Medhealth the
opinion of counsel for JFP and MII, satisfactory in form and substance to
counsel to Medhealth, to the effect that (1) JFP and MII are each corporations
duly organized, validly existing, and in good standing under the laws of the
State of Nevada being the state of their incorporations, (2) that all necessary
corporate proceedings of JFP and MII as set forth herein have been duly taken to
authorize and enable the Merger and the exchange of the shares provided for
herein, (3) that this Agreement has been duly executed and delivered by the
Directors of JFP, and adopted by the holders of at least a majority of the
outstanding shares of common stock of JFP at a Special Meeting duly called for
such purpose, and therefore constitutes the legal, valid and binding obligation
of JFP and of MII in accordance with its terms, (4) that the shares of common
stock of JFP when delivered to the shareholders of Medhealth pursuant to this
Agreement does not, and the carrying out of the transactions herein provided for
will not, to the best of such counsel's knowledge, violate or conflict with any
statute,
-37-
28
charter or their corporate restriction to which JFP is subject or any agreement
or instrument to which JFP is a part or by which it is bound, (5) that the
delivery of the shares of common stock of JFP to the shareholders of Medhealth
pursuant to this Agreement is exempted from the registration requirements under
the Securities Act of 1933, as amended, by reasons of the applicability of
Section 4(2) of the Act and/or Regulation D promulgated under Section 3(b) of
the Act, and (6) that the transactions herein provided for will not result in
the recognition of taxable gain to the shareholders of Medhealth or to Medhealth
upon the transfer of their stock of Medhealth in exchange solely for stock of
JFP, nor in the recognition of taxable gain to JFP, MII, or their shareholders
upon said transfer, by reasons of the transaction qualifying as a tax-free
reorganization under the Internal Revenue Code of 1954, as amended.
(g) counsel for JFP and MII, and counsel for Medhealth, shall have
mutually determined that the provisions of the Blue Sky Laws of the various
jurisdictions wherein the shareholders of Medhealth reside have been complied
with, or shall have received "no-action letters", or shall have otherwise
determined and/or filed with such jurisdictions all such documents and paid all
such fees required in order to obtain an exemption from the registration
requirements of the various jurisdictions, and shall have delivered to the
parties hereto their written opinion to such effect.
(h) counsel for JFP and MII and counsel for Medhealth shall have
determined the delivery of the shares of common stock of JFP to the shareholders
of Medhealth pursuant to this Agreement is exempted from registration afforded
under Rule 505 of Regulation D promulgated under Section 3(b) of the Securities
Act of 1933, as amended.
-38-
29
ARTICLE IX
TERMINATION
SECTION 9.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time:
(a) by mutual written consent of JFP and Medhealth after approval of
their respective Board of Directors; or
(b) by either JFP or Medhealth after approval of the Board of Directors
of JFP or Medhealth, as the case may be, if the Merger has not been consummated
on or before October 16, 1995; provided, however, that neither party may
terminate this Agreement pursuant to this clause (b) if the failure of such
party to fulfill any of its obligations under this Agreement shall have been the
reason that the Merger shall not have been consummated on or before said date.
(c) any party shall have the right to abandon the Merger in the event
that any of the representations and warranties herein contained shall not be
true, or in the event that all obligations and agreements herein to be performed
shall not have been complied with, no later than two (2) days prior to the
Effective Time of the Merger.
(d) the Merger contemplated by this Agreement shall be abandoned and
terminated in the event that the requisite shareholder approvals shall not have
been obtained as to all matters requiring such approvals hereunder.
-39-
30
(e) notwithstanding approval of this Agreement by the shareholders of
the parties hereto, the merger may be abandoned or terminated on or before the
Effective Time by the mutual agreement of the Board of Directors of JFP,
Medhealth and MII.
SECTION 9.2. Effect of Termination. If this Agreement is terminated
pursuant to Section 9.1, this Agreement shall become void and of no effect with
no liability on the part of any party hereto.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile or similar
writing) and shall be given:
(a) if to JFP to:
Xxx Xxxxxxxx Productions, Inc.
c/o Doros & Brescia, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(b) if to Medhealth to:
Medhealth Imaging, Inc.
00000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
-40-
31
or such other address or facsimile number as such party may hereafter specify by
notice to the other party hereto. Each such notice, request or other
communication shall be effective (i) if given by facsimile, when such facsimile
is transmitted to the facsimile number specified in this Section and the
appropriate confirmation is provided, (ii) if given via United States mail,
three days after such notice is deposited in the mail in a postage pre-paid
envelope, or (iii) if given by any other means, when delivered at the address
specified in this Section.
SECTION 10.2. Survival. All representations, warranties, agreements and
covenants contained herein shall survive the Effective Time of the Merger.
SECTION 10.3. Amendment. Subject to applicable law, any provision of
this Agreement may be amended by the parties hereto, by action of each of their
respective Boards of Directors of by their respective officers duly authorized
by such Board of Directors, at any time prior to the Effective Time. Any
amendment to this Agreement shall be in writing signed by all the parties
hereto.
SECTION 10.4. Waiver. (a) At any time prior to the Effective Time,
Medhealth on the one hand, and JFP on the other hand, may (i) extend the time
for the performance of any agreement of the other party of parties hereto, (ii)
waive any accuracy in the representations and warranties contained herein or in
any document delivered pursuant hereto, or (iii) waive compliance with any
agreement or condition contained herein. Any agreement on the part of any party
to any such extension or waiver shall be effective only if set forth in a
writing signed on behalf of such party and delivered to the other parties.
-41-
32
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 10.5. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that no party may assign
or otherwise transfer any of its rights under this Agreement without the consent
of the other parties hereto.
SECTION 10.6. Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Nevada without
regard to principles of conflict of laws.
SECTION 10.7. Integration. This Agreement embodies the entire agreement
and understanding among the parties hereto and supersedes all prior agreements
and understandings relating to the subject matter hereof.
SECTION 10.8. Headings and References. The headings of the Articles and
Sections of this Agreement are inserted for convenience only and shall not
constitute a part hereof. When the context so requires in this Agreement, the
masculine gender shall include the feminine and/or neuter and the singular
number includes the plural and visa versa.
-42-
33
SECTION 10.9. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by the other party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
XXX XXXXXXXX PRODUCTIONS, INC.
/s/ XXXX XXXXXXXX
-----------------------------------------
By: Xxxx Xxxxxxxx
Title: President
MEDHEALTH IMAGING, INC.
/s/ XXXXX X. XXXXX
-----------------------------------------
By: Xxxxx X. Xxxxx
Title: President
-43-
34
INVESTMENT INTENT LETTER
Xxx Xxxxxxxx Productions, Inc.
Dear Sir:
In connection with a certain Agreement and Plan of Merger dated August
1, 1995 (the "Agreement") by and among Xxx Xxxxxxxx Productions, Inc., a Nevada
corporation (the "Company") and Medhealth Imaging, Inc., a Florida corporation
("Medhealth") which Agreement provides, among other things, for a merger of
Medhealth with and into a wholly-owned subsidiary corporation of JFP to be
incorporated in the State of Nevada and named, if available, Medhealth Imaging,
Inc. ("MII") and for the exchange of each share of Medhealth common stock, part
value $.001 per share, issued and outstanding at the Effective Time of the
Merger into .68392 (sixty-eight and three hundred ninety-two/one hundredth) of a
share of JFP common stock, par value $.001 per share, I hereby represent and
warrant to you as follows:
I have been advised by you that the common shares of JFP which I will
acquire (the "Shares") and the common shares of JFP which will be acquired by
the other shareholders of Medhealth pursuant to the terms of the Agreement, are
not being registered under the Securities Act of 1933, as amended, on the basis
of the exemption afforded under Regulation D, promulgated under 3(b) of the said
Act.
I hereby represent, warrant and agree that the Shares to be acquired by
me, as relates to their transferability by me, shall bear an appropriate
restrictive legend on the certificate to be received by me.
I hereby further represent to you that I am acquiring the Shares for
investment for my own account and not with a view to resell, transfer, or
otherwise distribute the Shares; that I do not intend to divide my participation
with others or to resell, transfer, or otherwise dispose of all or any part of
the Shares unless and until I determine at some future date that changed
circumstances, not now in contemplation, make such disposition advisable; and
that in no event will I attempt to resell, transfer or otherwise dispose of all
or any part of the Shares unless and until the Shares have been included in an
effective registration statement under the Securities Act of 1933 or you have
received an opinion of counsel satisfactory to you to the effect that any such
proposed resale, transfer or other disposition may be effected without such
registration.
EXHIBIT "A"
35
I acknowledge that you have made available to me financial and other
data related to you and your business, and that you are relying upon my
representations contained in this letter.
Very truly yours,
---------------------------------
(Signature)
---------------------------------
(Signature)
Dated: _____________, 1995
[Please print names exactly as it
appears on the face of your Medhealth
Imaging, Inc. stock certificate. If more
than one name appears, all persons must
sign this letter.]
----------------------------------
(Print Name)
----------------------------------
(Print Name)
-2-
36
Xxxxxx Xxxxxxxx
Certified Public Accountant
--------------------------------------------------------------------------------
May 17, 1995
Medhealth Imaging, Inc.
00000 Xxxx Xxxx., #000
Xxxxxxxxxx, XX 00000
Gentlemen:
I have audited the accompanying Balance Sheet of Medhealth Imaging, Inc. as of
the period ending March 31, 1995 and the related Statement of Income, Profit and
Loss for the period then ended. These financial statements are the
responsibility of the corporation's management. My responsibility is to express
an opinion on these statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amount and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly in all
material respects the financial position of Medhealth Imaging, Inc. at March 31,
1995 and the results of operations then ended in conformity with generally
accepted accounting principles.
Respectfully submitted,
/s/ XXXXXX XXXXXXXX
Xxxxxx Xxxxxxxx
--------------------------------------------------------------------------------
00 Xxxxxxxx Xxxx Xxxxxx Xxx Xxxx 00000
EXHIBIT "B"
37
MEDHEALTH IMAGING, INC.
BALANCE SHEET
AS OF MARCH 31, 1995
TOTAL
MII
CURRENT ASSETS
CASH 9,840
ACCOUNTS RECEIVABLE 5,334
INVENTORY 172,558
OTHER CURRENT ASSETS 11,563
---------
TOTAL CURRENT ASSETS 199,295
NON-CURRENT ASSESTS
PROPERTY & EQUIPMENT 5,000,000
INVESTMENT IN SUBSIDIARY0
DESIGN & PATENT RIGHTS 1,192,091
---------
TOTAL NON-CURRENT ASSETS 6,192,091
TOTAL ASSETS 6,391,386
=========
CURRENT LIABILITIES
ACCOUNTS PAYABLE 69,926
ACCRUED EXPENSES 58,680
NOTES PAYABLE 21,380
OTHER CURRENT LIABILITIES 16,656
---------
TOTAL CURRENT LIABILITIES 166,642
EXCESS OF NET ASSETS
OVER PURCHASE PRICE 20,151
LONG TERM NOTES PAYABLE 2,000,000
---------
TOTAL LIABILITIES 2,186,793
STOCKHOLDER'S LIABILITY
COMMON STOCK 5,196
PAID-IN-CAPITAL 4,692,163
RETAINED EARNINGS (492,766)
---------
TOTAL STOCKHOLDER EQUITY 4,204,593
---------
TOTAL LIABILITIES
SHAREHOLDER EQUITY 6,391,386
=========
38
MEDHEALTH IMAGING, INC.
BALANCE SHEET
AS XX XXXXX 00, 0000
XXX XXXXXX ADJUSTMENT TOTAL
3/31/95 3/31/95 MII
CURRENT ASSETS
CASH 2,965 6,875 0 9,840
ACCOUNTS RECEIVABLE 0 5,334 0 5,334
INVENTORY 124,000 48,558 0 172,558
OTHER CURRENT ASSETS 0 11,563 0 11,563
--------- --------- ---------- ---------
TOTAL CURRENT ASSETS 126,965 72,330 0 199,295
NON-CURRENT ASSESTS
PROPERTY & EQUIPMENT 0 5,000,000 0 5,000,000
INVESTMENT IN SUBSIDIARY 3,000,000 0 (3,000,000) 0
DESIGN & PATENT RIGHTS 1,192,091 0 0 1,192,091
--------- --------- ---------- ---------
TOTAL NON-CURRENT ASSETS 4,192,091 5,000,000 (3,000,000) 6,192,091
TOTAL ASSETS 4,319,056 5,072,330 (3,000,000) 6,391,386
--------- --------- ---------- ---------
CURRENT LIABILITIES
ACCOUNTS PAYABLE 36,377 33,549 0 69,926
ACCRUED EXPENSES 40,050 18,630 0 58,680
NOTES PAYABLE 21,380 0 0 21,380
OTHER CURRENT LIABILITIES 16,656 0 0 16,656
--------- --------- ---------- ---------
TOTAL CURRENT LIABILITIES 114,463 52,179 0 166,642
EXCESS OF NET ASSETS
OVER PURCHASE PRICE 0 0 20,151 20,151
LONG TERM NOTES PAYABLE 0 2,000,000 0 2,000,000
--------- --------- ---------- ---------
TOTAL LIABILITIES 114,463 2,052,179 20,151 2,186,793
STOCKHOLDER'S LIABILITY
COMMON STOCK 5,196 0 0 5,196
PAID-IN-CAPITAL 4,692,163 3,020,151 (3,020,151) 4,692,163
RETAINED EARNINGS (492,766) 0 0 (492,766)
--------- --------- ---------- ---------
TOTAL STOCKHOLDER EQUITY 4,204,593 3,020,151 (3,020,151) 4,204,593
--------- --------- ---------- ---------
TOTAL LIABILITIES
SHAREHOLDER EQUITY 4,319,056 5,072,330 (3,000,000) 6,391,386
========= ========= ========== =========
39
MEDHEALTH IMAGING, INC.
STATEMENT OF PROFIT & LOSS
FOR THE SIX MONTHS ENDED XXXXX 00, 0000
XXX XXXXXX TOTAL MII
-------- -------- ---------
Sales $ 0 $680,488 $680,488
Cost of Sales 0 343,449 343,449
-------- -------- --------
Gross Profit 0 337,039 337,039
Commissions 0 0 0
Product Development 0 0 0
General and
Administrative Expense 16,000 250,560 266,560
Interest Expense 0 86,479 86,479
-------- -------- --------
TOTAL EXPENSE 16,000 337,039 353,039
-------- -------- --------
NET PROFIT (LOSS) $(16,000) $ 0 $(16,000)
======== ======== ========
40
MEDHEALTH IMAGING, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
NOTE 1-ACQUISITION AND CORPORATE STRUCTURE
MEDHEALTH Imaging, Inc. is a Florida corporation incorporated on February
8, 1993, and was a wholly-owned subsidiary of of MEDHEALTH Service Corporation,
a Nevada corporation. On October 1, 1993, MEDHEALTH Imaging, INC. was spun-off
as a separate, private corporation, from Medhealth Service Corporation.
MEDHEALTH Imaging, Inc. addresses the medical diagnostic market through
its proprietary transillumination system. This can be used for taking scans of
the breast to locate anomalies that might be present, sometimes with the aid of
photosensitive dyes to enhance the image.
On March 18, 1994 the Company acquired the rights to a Cervical Injury
Management System of 200,000 shares of MEDHEALTH Imaging, Inc. common stock,
thus expanding its product offerings into the cervical injury diagnosis and
rehabilitation area.
Patent and patent applications exist for both systems. Until now, the
company has generated minimal sales, and generated a modest loss. However, the
company has shifted its emphasis from research and development stage to the
aggressive marketing stage of its product lines.
On March 15, 1994, MEDHEALTH Imaging, Inc. contracted with Jireh Ventures,
Inc., a Florida corporation, to acquire the fee simple interest in the Quadna
Four Seasons Resort located in Aitkin County, Minnesota. The resort has an MAI
appraisal of $5,000,000 with title being conveyed subject to an indebtedness of
$2,000,000. The consideration given to Jireh Ventures, Inc. was 3,000,000 shares
of MEDHEALTH Imaging, Inc. common stock. The resort is a recreational complex
with skiing and snowmobiling in Winter and swimming, fishing, boating and golf
in Summer.
NOTE 2 - ACCOUNTING POLICIES
Inventories-Inventories are carried at cost not in excess of market.
Revenue Recognition-Revenues for services rendered and sales for products
sold are recognized using the actual basis at the time the service is
rendered or the product is delivered.
Adjustment-The investment in subsidiary account is eliminated against the
capital accounts of the subsidiary per generally accepted accounting
principles.
Income Tax-The company has a tax carry forward of approximately $415,000
which may be used in part to offset profit in future years.
41
Patent and Design Rights-The cost of product and design rights will be
amortized upon the commencement of sales on a straight-line basis of
the respective items, which is less than the statutory life of each
patent.
NOTE 3-PROPERTY
Property consists of a resort in Aitkin County, Minnesota. The property has
an MAI appraisal value of 5,000,000 and is subject to an existing mortgage in
the amount of $2,000,000. The net carrying value is the value of the 3,000,000
shares of common stock, in the opinion of management, issued in exchange for the
property.
NOTE 4-COMMON STOCK
The company has one class of common stock, with each share to one vote, and
will receive dividends, when and as declared by the Board of Directors.
NOTE 5-DEVELOPEMENT STAGE COMPANY
The company had been considered to be in the development stage through
March 31, 1995, but has shifted its emphasis to an aggressive marketing of its
product lines.
NOTE 6-LEASE COMMITMENTS
The company does not presently have any long term lease obligations.
NOTE 7-ADJUSTMENTS
In the opinion of management, all adjustments, if any, have been made which
are necessary for a fair statement of the results of the interim periods.
42
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1994 Commission File No. 0-16525
XXX XXXXXXXX PRODUCTIONS, INC.
-----------------------------------------------------
(Exact Name of registrant as specified in its charter)
Nevada 00-0000000
-------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
00-00 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx Xxx Xxxx 00000
-------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (000) 000-0000
Indicate by check xxxx whether the registrant (1) has 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
--- ---
COMMON STOCK OUTSTANDING AS OF MARCH 31, 1994 - 24,103,792, SHARES.
EXHIBIT "D"
43
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
(UNAUDITED)
ASSETS
March 31, June 30,
1994 1993
----------- -----------
Current Assets:
Cash $ -0- $ -0-
----------- -----------
TOTAL CURRENT ASSETS $ -0- $ -0-
----------- -----------
LIABILITIES AND (DEFICIT IN ASSETS)
Current Liabilities:
Accrued expenses $ 30,452 $ 43,766
-0- -0-
----------- -----------
TOTAL CURRENT LIABILITIES 30,452 43,766
----------- -----------
(Deficit in Assets):
Common stock, $.001 par value, authorized
25,000,000 shares, issued and outstanding
24,103,792 and 22,283,792 shares 24,104 24,104
Additional paid - in capital 1,069,328 957,349
(Deficit) (1,123,884) (1,025,219)
----------- -----------
(30,452) (43,766)
TOTAL LIABILITIES AND (DEFICITS IN ASSETS) $ -0- $ -0-
=========== ===========
See notes to financial statements
44
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
(UNAUDITED)
For the Period For the three months For the nine months
January 14, 1987 ended March 31, ended March 31,
(inception) to -------------------- ----------------------
March 31, 1994 1994 1993 1994 1993
-------------- ---- ---- ----- ----
Revenues $ 49,672 $ -0- $ -0- $ -0- $ -0-
------------ ---------- ---------- ---------- --------
Costs and Expenses:
Festival expenses 27,500 -0- -0- -0- -0-
Xxxxxx expenses 21,155 -0- -0- -0- -0-
General and administrative 1,249,925 11,408 11,884 98,665 36,12
expenses
Interest expense 18,904 -0- -0- -0- -0-
------------ ---------- ---------- ---------- --------
1,317,484 11,408 11,884 98,665 36,12
------------ ---------- ---------- ---------- --------
Net (Loss) Before Extraordinary
Credit (1,267,812) (11,408) (11,884) (98,665) (36,12
Extraordinary Credit:
Gain on debt restructuring 243,928 -0- -0- -0- 87,08
------------ ---------- ---------- ---------- --------
(Note 3c)
Net Income (Loss) $ (1,023,884) $ (11,408) $ (11,884) $ (98,665) $ 50,955
------------ ---------- ---------- ---------- --------
Net Income (Loss) per share (0.06) (0.00) (0.00) (0.00) (0.0)
Weighted Average Shares 17,462,937 24,103,792 24,103,792 24,103,792 24,103,7
Outstanding ============ ========== ========== ========== ========
45
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the nine
For the period from months ended
January 14, 1987 March 31,
(inception) to ------------
March 31, 1994 1994 1993
-------------- ---- ----
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS:
Cash flows from operating activities:
Net earnings $(1,023,884) $(98,665) $ 50,955
----------- -------- --------
Adjustment to reconcile income to net cash
provided by operating activities:
Depreciation 3,133 -0- -0-
Shares issued for services 289,496
Change in assets and liabilities:
Increase (decrease) in accrued expenses 30,452 (13,314) (106,459)
----------- -------- --------
TOTAL ADJUSTMENTS 323,081 (13,314) (106,459)
NET CASH (USED)/PROVIDED BY OPERATIONS (700,803) (111,979) (55,504)
----------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Additions) deletions to fixed assets (3,133) -0- -0-
----------- -------- --------
NET CASH (USED) IN INVESTING ACTIVITIES (3,133) -0- -0-
----------- -------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
Increase (decrease) in due to shareholders -0- -0- -0-
Proceeds from sale of common stock 600,148 -0- -0-
Capital distribution to shareholders (100,000) -0- 53,684
Additional paid in capital 203,788 111,979 1,820
----------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 703,936 -0- 55,504
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS -0- -0- -0-
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD -0- -0- -0-
----------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD -0- -0- -0-
=========== ======== =========
CASH PAID FOR INTEREST AND TAXES -0- -0- -0-
=========== ======== =========
NON-CASH FINANCING ACTIVITIES:
Conversion of debt for common stock 174,944 -0- -0-
Common stock issued for services $ 289,496 $-0- $-0-
=========== ======== =========
See notes to financial statements
46
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED MARCH 31, 1994
(UNAUDITED)
1. BASIS OF PRESENTATION
Reference is made to the report on Form 10-k for the year ended June
30, 1993.
The financial statements of the periods ended March 31, 1994 and 1993
are unaudited and include all adjustments which, in the opinion of
management, are necessary to a fair statement of the results of
operations for the periods then ended. All such adjustments are of a
normal recurring nature. The results of the company's operation for
an interim period are not necessarily indicative of the results of the
Company's operation for a full fiscal year.
2. DESCRIPTION OF COMPANY
The company was formed to be an entertainment production and marketing
company concentration on the production, repackaging and distribution
of nostalgia and memorabilia products.
3. SIGNIFICANT ACCOUNTING POLICIES
a. Financial statements are prepared on an accrual basis.
b. The collection consists of the nostalgia collection of
artifacts, posters, films, records, etc. which
have been collected by Mr. Xxx Xxxxxxxx during his career.
The collection has been recorded -0- value as the accounting
practices of the Staff of the Securities and Exchange
Commission does not permit a valuation to be used in light of
the fact that Xx. Xxxxxxxx does not have an auditable
carryover basis for his collection.
Future expenditures will be recorded at cost and amortized
over the estimated useful life of the property.
c. Per share data has been computed based on average number of
shares.
d. Issuance of common stock for services have been valued at the
estimated value of the services performed.
47
ITEM 1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULT OF OPERATIONS
Results of Operations - Three months and nine months ended March 31, 1994
The Company is in the development stage. Accordingly, it has no revenues and
has incurred various expenses.
Liquidity and Capital Resources
The Company's present liquidity and capital resources are limited to its cash
on hand. Such cash is insufficient to enable the Company to develop its
business plans.
48
PART II
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
49
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registration has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
XXX XXXXXXXX PRODUCTIONS, INC.
By:/s/ Xxxx Xxxxxxxx, PRESIDENT
-----------------------------------
Xxxx Xxxxxxxx, President
50
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR
15(D) OF THE SECURITIES AND EXCHANGE
ACT OF 1934
For Quarter Ended December 31, 1993 Commission File No. 0-16525
XXX XXXXXXXX PRODUCTIONS, INC.
-----------------------------------------------------------------
(Exact Name of registrant as specified in its charter)
Nevada 00-0000000
------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
00-00 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx Xxx Xxxx 00000
------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (000) 000-0000
Indicate by check xxxx whether the registrant (1) has 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
----- ----
COMMON STOCK OUTSTANDING AS OF DECEMBER 31, 1993 - 24,103,792, SHARES.
51
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
(UNAUDITED)
ASSETS
December 31, June 30, 1993
1993 1993
----------- -----------
Current Assets:
Cash $ -0- $ -0-
----------- -----------
TOTAL CURRENT ASSETS $ -0- $ -0-
=========== ===========
LIABILITIES AND (DEFICIT IN ASSETS)
Current Liabilities:
Accrued expenses $ 30,452 $ 43,766
----------- -----------
-0- -0-
TOTAL CURRENT LIABILITIES 30,452 43,766
----------- -----------
(Deficit in Assets):
Common stock, $.001 par value, authorized
25,000,000 shares, issued and outstanding
24,103,792 and 22,283,792 shares 24,104 24,104
Additional paid - in capital 1,057,920 957,349
(Deficit) (1,112,476) (1,025,219)
----------- -----------
(30,452) (43,766)
----------- -----------
TOTAL LIABILITIES AND (DEFICITS IN ASSETS) $ -0- $ -0-
=========== ===========
See notes to financial statements
52
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
(UNAUDITED)
For the Period
January 14, 1987 For the three months For the six months
(inception) to ended December 31, ended December 31,
December 31, 1993 1993 1992 1993 1992
----------------- ----- ---- ---- ----
Revenues $ 49,672 $ -0- $ -0- $ -0- $-0-
------------ ------------ ------------ ------------ ----
Costs and Expenses:
Festival expenses 27,500 -0- -0- -0- -0-
Xxxxxx expenses 21,155 -0- -0- -0- -0-
General and administrative 1,238,517 30,336 22,643 87,257 24,?
expenses
Interest expense 18,904 -0- -0- -0- -0-
------------ ------------ ------------ ------------ ----
1,306,076 30,336 22,643 87,257 24, ?
------------ ------------ ------------ ------------ ----
Net (Loss) Before Extraordinary
Credit (1,256,404) (30,336) (22,643) (87,257) (24, ?
Extraordinary Credit:
Gain on debt restructuring 243,928 -0- 87,082 -0- 87, ?
------------ ------------ ------------ ------------ ----
(Note 3c)
Net Income (Loss) $ (1,012,476) $ (30,336) $ 64,439 $ (87,257) $62, ?
------------ ------------ ------------ ------------ ----
Net Income (Loss) per share (0.06) (0.00) (0.00) (0.00) (0)
Weighted Average Shares 17,224,343 24,103,792 24,103,792 24,103,792 23,193, ?
============ ============ ============ ============ ====
Outstanding
53
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the nine
For the period from months ended
January 14, 1987 December 31,
(inception) to ------------
December 31, 1993 1993 1992
----------------- ---- ----
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS:
Cash flows from operating activities:
Net earnings $(1,012,476) $ (87,257) $ 62,839
------------ ---------- ----------
Adjustment to reconcile income to net cash
provided by operating activities:
Depreciation 3,133 -0- -0-
Shares issued for services 289,496
Change in assets and liabilities:
Increase (decrease) in accrued expenses 30,452 (13,314) (107,959)
------------ ---------- ----------
TOTAL ADJUSTMENTS 323,081 (13,314) (107,959)
NET CASH (USED)/PROVIDED BY OPERATIONS (689,395) (100,571) (45,120)
------------ ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Additions) deletions to fixed assets (3,133) -0- -0-
------------ ---------- ----------
NET CASH (USED) IN INVESTING ACTIVITIES (3,133) -0- -0-
------------ ---------- ----------
CASH FLOW FROM FINANCING ACTIVITIES:
Increase (decrease) in due to shareholders -0- -0- -0-
Proceeds from sale of common stock 600,148 -0- -0-
Capital distribution to shareholders (100,000) -0- -0-
Additional paid in capital 192,380 100,571 45,120
------------ ---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 692,528 -0- 45,120
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS -0- -0- -0-
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD -0- -0- -0-
------------ ---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD -0- -0- -0-
============ ========== ==========
CASH PAID FOR INTEREST AND TAXES -0- -0- -0-
============ ========== ==========
NON-CASH FINANCING ACTIVITIES:
Conversion of debt for common stock 174,944 -0- -0-
Common stock issued for services $ 289,496 $ -0- $ -0-
============ ========== ==========
See notes to financial statements
54
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 1993
(UNAUDITED)
1. BASIS OF PRESENTATION
Reference is made to the report on Form 10-k for the year ended June
30, 1993.
The financial statements of the periods ended December 31, 1993 and
1992 are unaudited and include all adjustments which, in the opinion
of management, are necessary to a fair statement of the results of
operations for the periods then ended. All such adjustments are of a
normal recurring nature. The results of the company's operation for
an interim period are not necessarily indicative of the results of the
Company's operation for a full fiscal year.
2. DESCRIPTION OF COMPANY
The company was formed to be an entertainment production and marketing
company concentration on the production, repackaging and distribution
of nostalgia and memorabilia products.
3. SIGNIFICANT ACCOUNTING POLICIES
a. Financial statements are prepared on an accrual basis.
b. The collection consists of the nostalgia collection of
artifacts, posters, films, records, etc. which have been
collected by Mr. Xxx Xxxxxxxx during his career. The
collection has been recorded -0- value as the accounting
practices of the Staff of the Securities and Exchange
Commission does not permit a valuation to be used in light of
the fact that Xx. Xxxxxxxx does not have an auditable
carryover basis for his collection.
Future expenditures will be recorded at cost and amortized
over the estimated useful life of the property.
c. Per share data has been computed based on average number of
shares.
d. Issuance of common stock for services have been valued at the
estimated value of the services performed.
55
ITEM 1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULT OF OPERATIONS
Results of Operations - Three months and six months ended December 31, 1993
The Company is in the development stage. Accordingly, it has no revenues and
has incurred various expenses.
Liquidity and Capital Resources
The Company's present liquidity and capital resources are limited to its cash
on hand. Such cash is insufficient to enable the Company to develop its
business plans.
56
PART II
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
57
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registration has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
XXX XXXXXXXX PRODUCTIONS, INC.
By: /s/ Xxxx Xxxxxxxx, PRESIDENT
-------------------------------
Xxxx Xxxxxxxx, President
58
XXXXXXXXXX, X.X. 00000
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1993 Commission File No. 0-16525
XXX XXXXXXXX PRODUCTIONS, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 00-0000000
------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
00-00 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx Xxx Xxxx 00000
------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (000) 000-0000
Indicate by check xxxx whether the registrant (1) has 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
---- -----
COMMON STOCK OUTSTANDING AS OF SEPTEMBER 30, 1993 - 24,103,792, SHARES.
59
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
(UNAUDITED)
ASSETS
September 30, June 30,
1993 1993
---------- -----------
Current Assets:
Cash $ -0- $ -0-
---------- -----------
TOTAL CURRENT ASSETS $ -0- $ -0-
========== ==========
LIABILITIES AND (DEFICIT IN ASSETS)
Current Liabilities:
Accrued expenses $ 32,452 $ 43,766
---------- -----------
TOTAL CURRENT LIABILITIES 32,452 43,766
---------- -----------
(Deficit in Assets):
Common stock, $.001 par value, authorized
25,000,000 shares, issued and outstanding
24,103,792 and 22,283,792 shares 24,104 24,104
Additional paid - in capital 1,025,584 957,349
(Deficit) (1,082,140) (1,025,219)
---------- -----------
(32,452) (43,766)
---------- -----------
TOTAL LIABILITIES AND (DEFICITS IN ASSETS) $ -0- $ -0-
========== ==========
See notes to financial statements
60
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the
period from
January 14, 1987 For the three months
(inception) to ended September 30,
September 30, 1993 1993 1992
------------------ ---- ----
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS:
Cash flows from operating activities:
Net earnings $(982,140) $(56,921) $ (1,600)
--------- --------- ---------
Adjustment to reconcile income to net cash
provided by operating activities:
Depreciation 3,133 -0- -0-
Shares issued for services 289,496 -0- -0-
Contribution to Capital 160,044 68,235 -0-
Change in assets and liabilities:
Increase (decrease) in accrued expenses 32,452 (11,314) 1,600
--------- --------- ---------
TOTAL ADJUSTMENTS 485,125 56,921 1,600
NET CASH (USED)/PROVIDED BY OPERATIONS (497,015) -0- -0-
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Additions) deletions to fixed assets (3,133) -0- -0-
--------- --------- ---------
NET CASH (USED) IN INVESTING ACTIVITIES (3,133) -0- -0-
--------- --------- ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock 600,148 -0- -0-
Capital distribution to shareholders (100,000) -0- -0-
--------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 500,148 -0- -0-
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS -0- -0- -0-
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD -0- -0- -0-
========= ========= =========
CASH AND CASH EQUIVALENTS AT END OF PERIOD -0- -0- -0-
========= ========= =========
CASH PAID FOR INTEREST AND TAXES -0- -0- -0-
========= ========= =========
NON-CASH FINANCING ACTIVITIES:
Conversion of debt for common stock $ 174,944 $ -0- $ -0-
========= ========= =========
Common stock issued for services $ 289,496 $ -0- $ -0-
========= ========= =========
61
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
(UNAUDITED)
For the Period
January 14, 1987 For the three months
(inception) to ended September 30,
September 30, 1993 1993 1992
------------------ ---- ----
Revenues $ 49,672 $ -0- $ -0-
------------ ------------ ----------
Costs and Expenses:
Festival expenses 27,500 -0- -0-
Merger expenses 21,155 -0- -0-
General and administrative
expenses 1,208,181 56,921 1,600
Interest expense 18,904 -0- -0-
------------ ------------ ----------
1,275,740 56,921 1,600
------------ ------------ ----------
NET (LOSS) BEFORE EXTRAORDINARY
CREDIT (1,226,068) (56,921) (1,600)
Extraordinary Credit:
Gain on debt restructuring
(Note 3c) 243,928 -0- -0-
------------ ------------ ----------
NET INCOME (LOSS) $ (982,140) $ (56,921) $ (1,600)
============ ============ ==========
NET INCOME (LOSS) PER SHARE $ (0.06) $ (0.00) $ (0.00)
============ ============ ==========
WEIGHTED AVERAGE SHARES
OUTSTANDING 16,967,966 24,103,792 22,283,792
============ ============ ==========
See notes to financial statements
62
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30, 1993
(UNAUDITED)
1. BASIS OF PRESENTATION
Reference is made to the report on Form 10-k for the year ended June
30, 1993.
The financial statements of the periods ended September 30, 1993 and
1992 are unaudited and include all adjustments which, in the opinion
of management, are necessary to a fair statement of the results of
operations for the periods then ended. All such adjustments are of a
normal recurring nature. The results of the company's operation for
an interim period are not necessarily indicative of the results of the
Company's operation for a full fiscal year.
2. DESCRIPTION OF COMPANY
The company was formed to be an entertainment production and marketing
company concentration on the production, repackaging and distribution
of nostalgia and memorabilia products.
3. SIGNIFICANT ACCOUNTING POLICIES
a. Financial statements are prepared on an accrual basis.
b. The collection consists of the nostalgia collection of
artifacts, posters, films, records, etc. which have been
collected by Mr. Xxx Xxxxxxxx during his career. The
collection has been recorded -0- value as the accounting
practices of the Staff of the Securities and Exchange
Commission does not permit a valuation to be used in light of
the fact that Xx. Xxxxxxxx does not have an auditable
carryover basis for his collection.
Future expenditures will be recorded at cost and amortized
over the estimated useful life of the property.
c. Per share data has been computed based on average number of
shares.
d. Issuance of common stock for services have been valued at the
estimated value of the services performed.
63
ITEM 1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULT OF OPERATIONS
Results of Operations - Three months ended
September 30, 1993 and September 30, 1992
The Company is in the development stage. Accordingly, it has no revenues and
has incurred various expenses.
Liquidity and Capital Resources
The Company's present liquidity and capital resources are limited to its cash
on hand. Such cash is insufficient to enable the Company to develop its
business plans.
64
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registration has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
XXX XXXXXXXX PRODUCTIONS, INC.
By: /s/ Xxxx Xxxxxxxx, PRESIDENT
---------------------------------------
Xxxx Xxxxxxxx, President
65
FORM 00-X
XXXXXXXXXX XXX XXXXXXXX XXXXXXXXXX
XXXXXXXXXX, X.X. 00000
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JUNE 30, 1993 COMMISSION FILE NUMBER 0-16525
XXX XXXXXXXX PRODUCTIONS, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 00-0000000
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (000) 000-0000
--------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
None None
------------------- ---------------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock -- $.001 Par Value
-------------------------------
(Title of class)
Indicate by check xxxx whether the registrant (1) has 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
--- ---
The number of shares of the voting stock of the registrant outstanding
as of November 12, 1993 was 24,103,792 shares of common stock. The aggregate
market value of the common stock held by non-affiliates of the registrant on
such date was approximately $1,526,773.00 based upon the average of the bid and
asked prices of the common stock, as reported in the over-the-counter NASD
Electronic Bulletin Board.
66
PART I
Item 1. Business
(a) General Development of Business.
Xxx Xxxxxxxx Productions, Inc. (the "Company") was an entertainment
production marketing company engaged in production and distribution of
memorabilia products relating to nostalgia.
From August, 1990 to on or about December 1, 1991, the Company was also
engaged in the development of a facsimile services business (the "Fax Services")
providing world-wide facsimile transmission and receiving capabilities on
high-speed digital communications technology.
The Company ceased the active operation of its business including,
without limitation, the Fax Services on or about December 1, 1991.
On or about August 3, 1992 the Company commenced active operation of
its business with the signing of an Agreement dated August 3, 1992 between the
Company, certain of its principals and Commonwealth Asset Management Corp.
An Agreement dated October 29, 1993 (the "Agreement") was also entered
into between the Company, Sports Heroes, Inc. ("SHI"), a Delaware and NASDAQ
listed public company located at 000 Xxxxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx
00000, King of Nostalgia, Inc. ("KNI"), a New York corporation formed on October
29, 1993 and a wholly-owned subsidiary of the Company located at 0000 Xxxxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000, Entertainment Heroes, Ltd. ("EHL"), a
Delaware corporation and a wholly-owned subsidiary of SHI located at 000
Xxxxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000 and Entertainment Legends, L.P.
(the "Partnership"), a New Jersey limited partnership located at 000
Xxxxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000.
67
The Agreement provides for the formation of the Partnership to engage
in the following business activities: (i) to market, distribute, sell, license,
lease or rent the "Xxx Xxxxxxxx Memorabilia" consisting of but not limited to
silent, sound and feature films, records, photographs, prints, magazines, radio
memorabilia and other original and one-of-a-kind items (the "Memorabilia")
and/or reproductions of the Memorabilia, (ii) to purchase, acquire, market,
sell, license, lease, rent or otherwise deal in other entertainment memorabilia
relating to nostalgia and (iii) to develop and implement such other revenue
producing entertainment products from the Memorabilia and other purchased and/or
acquired memorabilia.
KNI and EHL are the general partners of the Partnership and the
Company, SHI and an unaffiliated third party are the limited partners of the
Partnership.
The Agreement also provides, in part, that (i) the Company is to
receive 5% of the Partnership's gross revenues and, as a limited partner of the
Partnership, 44.1% of 99% of the Partnership's profits and losses, SHI is to
receive, as a limited partner of the Partnership, 51% of 99% of the
Partnership's profits and losses and an unaffiliated third party is to receive,
as a limited partner of the Partnership, 4.9% of 99% of the Partnership's
profits and losses, (ii) the Company shall concurrently therewith deliver a Xxxx
of Sale for the sale, assignment and transfer to the Partnership of the
Memorabilia which Xxxx of Sale is to be delivered into escrow with the Company's
attorneys and released from escrow pursuant to the Agreement and an Escrow
Agreement and (iii) in consideration thereof, SHI shall concurrently therewith
issue
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68
share certificates for 200,000 restricted shares of SHI common stock, $.001 par
value (the "Shares"), 185,000 shares issued to the Company and, in consideration
for legal services rendered in this transaction by the law firm of Doros &
Brescia, P.C., the Company's attorneys, 13,500 shares issued to a member of the
law firm and 1,500 shares issues to an associate of the law firm, which Share
certificates are to be delivered into escrow with SHI's attorneys and released
from escrow pursuant to the Agreement and an Escrow Agreement and (iv) such
other terms and conditions as more fully set forth in the Agreement.
Pursuant to the Agreement, on October 29, 1993 the Company delivered
into escrow with the Company's attorneys a Xxxx of Sale for the sale, assignment
and transfer to the Partnership of the Memorabilia and shortly thereafter,
delivered the Memorabilia to the Partnership.
The Agreement also provides, in part, that the Agreement shall be
abandoned and terminated if any of the following events shall occur:
a. In the event the required approval of the Agreement by the
Company's shareholders is not obtained within 30 days from the
date of the Agreement.
b. In the event the required independent appraisal values the
Memorabilia at less than $1,000,000, then for a period of 10
days from the appraisal date SHI shall have the option to
abandon and terminate the Agreement.
c. In the event SHI does receive approval of the Agreement by its
lender, Belgrave Investment Trust, N.V. and SHI's Board of
Directors within seven (7) business days from the date of the
Agreement.
By an Amendment dated November 18, 1993, which amended the Agreement,
in part, the time for the Company to obtain approval of the Agreement by the
Company's shareholders was extended to December 18, 1993. At a special meeting
of the Company's shareholders held on December 17, 1993 at 10:00 a.m. at the
Company's offices the Company's
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69
shareholders approved the Agreement.
Also by the Amendment dated November 18, 1993 and by further Amendment
dated December 20, 1993 the time for SHI to obtain approval of its lender,
Belgrave Investment Trust, N.V., and its Board of Directors was extended to
January 31, 1994. To date the Company has not received the required written
notice from SHI as to whether such approvals were obtained.
In the event the Agreement is abandoned and terminated for any of the
foregoing events, the 200,000 shares of SHI common stock being held in escrow
shall be released from escrow and returned to SHI and all right, title and
interest to the Shares shall revert to SHI and the Xxxx of Sale for the
Memorabilia shall be released from escrow and returned to the Company, all
right, title and interest to the Memorabilia shall revert to the Company and the
Memorabilia shall be returned to the Company.
The Company conducts business from its principal executive office at
0000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000.
Xxx Xxxxxxxx Productions, Inc. filed its certificate of incorporation
under the name "Asset Development Corporation" with the State of Nevada on
January 14, 1987, and thereafter Xxx Xxxxxxxx Productions, Inc., a Delaware
corporation organized on June 26, 1987, merged into Asset Development
Corporation and Asset Development Corporation changed its name to Xxx Xxxxxxxx
Productions, Inc.
The Company is a development state enterprise. Since the
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70
Company ceased the active operation of its business on or about December 1,
1991, the Company has not received any revenues from its operations nor has it
received any revenues from the Partnership's operations.
In addition, the Company will seek to engage in other businesses
related to the entertainment industry including, without limitation, those
relating to memorabilia and nostalgia.
(b) Financial Information About Industry Segments.
Financial information concerning the Company's business is included and
incorporated by reference in Part II and Part IV of this Form 10-K. Because the
Company is still in the development stage, the industry segments in which the
Company engages are not separately stated.
(c) Narrative Description of Business.
The Company is engaged in the business of entertainment memorabilia
relating to nostalgia as a party to the Agreement wherein the Company is a
limited partner of the Partnership whose business is the marketing of the Xxx
Xxxxxxxx Memorabilia and other acquired entertainment memorabilia relating to
nostalgia. The Company's wholly-owned subsidiary, KNI, serves as a general
partner of the Partnership.
Under the terms of the Agreement, the Company is transferring, subject
to certain conditions in the Agreement including without limitation, the
provisions in the Agreement relating to the abandonment and termination of the
Agreement, all of its right, title and interest in the Xxx Xxxxxxxx Memorabilia
to the Partnership.
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71
The Xxx Xxxxxxxx Memorabilia was amassed during Xxx Xxxxxxxx'x 35-year
show business career and contains many one-of-a-kind items and includes rare
films dating back to the silent film era, silent and short subjects, two-reel
silent films, feature films, photographs, phonograph records, posters, lobby
cards and other memorabilia items. Among these items are original programs for
the film classic "Gone with the Wind," one of the world's foremost archive
collections of Xxxxx Xxxxxx phonograph records and photographs, films featuring
Xxx Xxxxxx, Xxxxx Xxxxxx and the rare film "Xxxxxxx'x Art of Comedy" staring
Xxxxxxx Xxxxxxx and original one-of-a-kind color posters for the films "The
Xxxxxx Story" and "Xxxxxx Sings Again". Xxx Xxxxxxxx, known as the "King of
Nostalgia" to his fans, will be involved with the Partnership when requested and
subject to certain conditions in projects aimed toward sharing this collection
with the consuming public and other collectors. The market for memorabilia and
nostalgia items continues to grow as many Americans literally try to hold on to
a piece of their past. In addition, the Company believes that the unique
collection of Xxx Xxxxxxxx Memorabilia will enable the Partnership to compete
successfully in this growing industry.
As a limited partner of the Partnership, the Company is entitled to
receive 44.1% of 99% of the Partnership's profits and losses and as a general
partner, KNI is entitled to receive 49% of 1% of the Partnership's profits and
losses. In addition, the Company is receiving, subject to certain conditions, up
to 185,000 restricted shares of SHI's common stock and 5% of the Partnership's
gross revenues.
Under the terms of the Agreement, the Company has reserved the right to
reproduce and/or borrow any of the films included in the Xxx
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72
Franklin Memorabilia prior to any such films being sold or delivered out of the
possession of the Partnership and to use such films and to edit and re-edit the
films in any manner and to take extracts thereof for any purpose including,
without limitation, use of the films for the Company's business, and the
copyright and/or trademark of the content.
The films contained in the Xxx Xxxxxxxx Collection were at one time
protected by the copyright laws of the United States. Neither the Company, the
Partnership nor Xxx Xxxxxxxx has copyright protection for any of the films
contained in the collection. Moreover, the Company believes that the copyright
protection for a majority of the older films in the Xxx Xxxxxxxx Collection may
have expired due to the passage of time and the failure to renew the copyrights.
As such, these films are considered to be in the public domain and anyone in
lawful possession of a negative or print may use the film. There is no assurance
that the Company will be able to use the films for commercial purposes at any
time. If the Company determines that it is able to use the films within the Xxx
Xxxxxxxx Collection as authorized by the Agreement, it may repackage the films
utilizing in some manner the Xxx Xxxxxxxx name and image. It is contemplated
that if repackaging of films is undertaken, such distribution would include the
home video market and would feature introductions by Xxx Xxxxxxxx.
Magazine Publication. In December 1989, Company entered into an
agreement with UGIC Enterprises, Inc. ("UGIC") for the publication by UGIC of a
magazine, the principal subject matter of which is nostalgia. The title is "Xxx
Xxxxxxxx'x Nostalgia" and includes therein certain editorial material under Xxx
Xxxxxxxx'x byline, as well as utilizing materials from the Xxx Xxxxxxxx
Collection. In consideration of the
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73
rights granted to UGIC, the Company has been granted a 35% royalty interest in
the profits of UGIC (as more fully described in the agreement). Additionally, if
UGIC wishes to sell the magazine, the Company shall be entitled to receive 35%
of the net proceeds therefrom. UGIC has ceased production of the magazine in
fiscal 1991, accordingly there have been no profits to accrue.
General. The Company intends to also engage in businesses which do not
conflict with the Partnership's business . Such businesses include, without
limitation, publication of any and all newsletters and/or magazines, production
and syndication of any and all radio, broadcast, television, cable, microwave
cable, video products and/or movies, publication and distribution of greeting
cards and books and theatrical productions and the marketing of the films
included in the Xxx Xxxxxxxx Memorabilia, which businesses have been expressly
reserved under the Agreement as businesses in which the Company may engage.
Radio and television host Xxx Xxxxxxxx is a director of the Company. He
recently retired after 43 years as the host of his television talk show the Xxx
Xxxxxxxx Show. Thousands of radio listeners currently tune into his weekly radio
"Memory Lane" broadcasts on WOR and WBBR. The general public have come to equate
Xxx Xxxxxxxx with "Memory Lane" nostalgia. Based on the visibility, knowledge
and mass appeal of Xxx Xxxxxxxx, the Company believes it is well positioned to
engage in many phases of the nostalgia and related entertainment product
industry.
Competition. The Company competes with other nostalgia/memorabilia
entertainment production and distribution
-9-
74
companies, other memorabilia manufacturers, suppliers, sales organizations,
producers and film distributors that have substantially greater financial
resources and more extensive experience and facilities to market and promote
their respective business.
Employees. The Company has no full-time employees working due to the
lack of working capital.
Item 2. Properties.
The Company does not own any property. The Company utilizes for a
nominal monthly charge an executive office provided by Commonwealth Asset
Management Corp., located at 00-00 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxx
00000.
Item 3. Legal Proceedings.
The Company is not involved in any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
The Agreement requires approval of the Company's shareholders. A
Special Meeting of Shareholders of the Company was called for December 17, 1993
at 10:00 A.M. at the Company's offices to consider and vote upon the approval or
rejection of the Agreement. At such shareholder's meeting the Agreement was
approved.
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PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The common stock of the Company (the "Common Stock") is traded in the
over-the-counter market and since July 1990 has been quoted through the
over-the-counter NASD Electronic Bulletin Board under the symbol: "3FNJD." At
the current time, there is a limited public market for the Common Stock and
trading is sporadic and limited. The following table sets forth, for the periods
indicated, the high and low bid and asked quotations for the Common Stock during
the two most recent fiscal years as reported on the National Daily Quotation
Service "pink sheets." The prices represent quotations between dealers, without
adjustment for retail xxxx up, xxxx down or commission, and do not necessarily
represent actual transactions.
Bid Asked
-------------- ----------------
High Low High Low
---- --- ---- ---
Fiscal 1991
-----------
1st Quarter .04 .02 5/32 .10
2nd Quarter 1/8 .02 5/8 .10
3rd Quarter 1/8 .02 5/8 .20
4th Quarter .02 .02 .20 .20
Fiscal 1992
-----------
1st Quarter .02 .02 .20 .20
2nd Quarter 1/16 .02 1/4 .20
3rd Quarter .02 .02 .20 .20
4th Quarter .02 .02 .20 .20
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76
Fiscal 1993
-----------
1st Quarter 1/16 1/32 5/16 5/32
2nd Quarter 1/8 1/32 1/2 5/32
3rd Quarter .09 1/32 1/4 1/8
4th Quarter 1/16 .01 3/16 .04
The Company has not paid any cash dividends on its Common Stock since
its incorporation and it is anticipated that, for the foreseeable future,
earnings, if any, will continue to be retained for use in its business.
As of November 12, 1993, the approximate number of record holders of
the Company's Common Stock was 141. The number of record holders of Company
Warrants is two.
Item 6. Selected Financial Data.
The following selected financial data for the five years ended June 30,
1993 is derived from the financial statements of the Company. The data presented
in the table below should be read in conjunction with the financial statements,
related notes and other financial information included elsewhere in this Report.
(In thousands - except per share amounts)
For the year ended
June 30,
-------------------------------------------
1993 1992 1991 1990 1989
------ ------ ----- ----- -----
Revenues $ -- $ -- $ 9 $ 1 $ 12
====== ====== ===== ===== =====
Net (loss) before
extraordinary credit $ (92) $ (10) $(325) $(199) $ 297)
====== ====== ===== ===== =====
Net (loss) per share
before extraordinary credit $ (.00) $ (.00) $(.02) $(.01) $(.02)
====== ====== ===== ===== =====
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77
Total assets at period
end $ -- $ -- $ -- $ -- $ --
====== ====== ===== ===== =====
Long-term obligations
at period end $ -- $ -- $ -- $ -- $ --
====== ====== ===== ===== =====
Dividends None None None None None
====== ====== ===== ===== =====
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
The Company is a development-stage enterprise that has depended
primarily upon loans, the sale of equity and recent contributions to capital
made by Commonwealth Asset Management Corp. to finance its operations. During
the Company's fiscal year ending June 30, 1993 Commonwealth Asset Management
Corp. advanced to the Company $92,000 for operating expenses and payments made
in settlement of Company liabilities, which amount was contributed to the
capital of the Company.
Liquidity and Capital Resources
The Company's working capital deficiency decreased from $182,000 at
June 30, 1992 to $44,000 at June 30, 1993. The net loss for the year ended June
30, 1993 before extraordinary credit of $92,000 was substantially funded by its
shareholder Commonwealth Asset Management Corp. To date, the Company has been
dependent on outside financing. The Company has had no sources of outside
financing other than the exercise of warrants, stockholder loans and
contributions to capital by Commonwealth Asset Management Corp.
The Company has no material commitments for capital expenditures as of
June 30, 1993.
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78
The Company will require substantial additional capital to implement
the business plan of the Company. It cannot be determined when the Company will
obtain such capital to fund the implementation of the business plan.
Impact of Inflation
Because the Company reflects price escalation in its quotations to its
customers and in its estimation of costs for materials and labor, management of
the Company believes that inflation will not have any material impact on the
business of the Company.
Item 8. Financial Statements and Supplementary Data.
The financial statements and schedules listed in the accompanying Index
to Financial Statements are attached hereto and files as a part of this Report
under Item 14 on Pages F-1 through F-12.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
On November 10, 1993, the client/auditor relationship between Xxxxxxx
Radin & Co., P.C. and the Company ended as the accounting firm informed the
Registrant that it was not independent until its prior fees had been paid.
Xxxxxxx Xxxxx & Co., P.C.'s report on the financial statements for the
years ended June 30, 1992 and 1991 were modified as the Company's financial
condition raised substantial doubt about its ability to continue as a going
concern.
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79
The change of accountants was approved by the Company's Board of
Directors.
There were no disagreements with the former accountants on any matter
of accounting principals or practices, financial statement disclosure or
auditing scope or procedure.
On November 10, 1993 the Company engaged as its certifying accountants
Xxxxxx & Sprung, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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PART III
Item 10. Directors and Executive Officers of the Registrant.
The Company's bylaws provide that the number of members of the Board of
Directors shall be between seven and fifteen as determined from time to time by
the Board of Directors. On October 22, 1990, a resolution was approved by the
Board of Directors changing the number of directors from three to seven. The
members of the Board of Directors serve until the next annual meeting of the
shareholders of the Company and until their respective successors are elected
and qualified. On August 3, 1992 the Company and certain major shareholders
entered into an agreement the ("Agreement") whereby Commonwealth Asset
Management Corp. ("Commonwealth") agreed among other things to acquire
13,000,000 shares of the Company's common stock. The Agreement provided in part
that all former executives retire as officers, directors and employees of the
Company with the exception that under the Agreement Xxx Xxxxxxxx will remain as
a Company director. As such, the names, ages and positions of the Company's
directors and executive officers as of December 31, 1992 are listed below:
Name Age Position(s) with the Company First Elected
---- --- ---------------------------- -------------
Xxx Xxxxxxxx 62 Director 1987
Xxxx Xxxxxxxx 42 President, Director, Secretary 1992
and Treasurer
Xxx Xxxxxxxx has been a Director of the Company since 1987. From 1987
to August 1989, Xx. Xxxxxxxx also served as Chairman of the Board of the
Company. Xx. Xxxxxxxx has been a
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81
radio and television host for over forty years on such programs as "Memory
Lane", a weekly radio broadcast and "The Xxx Xxxxxxxx Show", a nightly
television talk show.
Xxxx Xxxxxxxx has been President, Director, Secretary and Treasurer of
the Company since 1992. In addition, Xx. Xxxxxxxx is the President of
Commonwealth Asset Management Corp., an investment firm in New York.
Item 11. Executive Compensation.
No executive officer of the Company received any cash compensation from
the Company during the fiscal year ended June 30, 1993. In lieu of $3,846.20 in
salary for the salary period March 25, 1993 to August 11, 1993, Xxx Xxxxxxxx
received a Warrant for the purchase of 600,000 shares of the Company's common
stock on a net exercise basis at seventy-five cents ($.75) per share exercisable
on or prior to July 31, 1998.
For the fiscal year ended June 30, 1993 the Company had no business
operations or employees.
On August 3, 1992 the Company and certain major shareholders entered
into an agreement (the "Agreement") whereby Commonwealth Asset Management Corp.
("Commonwealth") agreed among other things to acquire 13,000,000 shares of the
Company's common stock. The Agreement provided in part that executive
compensation due to Xxxxxxxx Xxxxx would be settled in full by a payment by
Commonwealth to Xxxxxxxx Xxxxx of $5,000 in full settlement thereof and
executive compensation due Xx. Xxxxx Xxxxxx would be settled
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82
in full by a payment by Commonwealth to Xx. Xxxxx Xxxxxx of $22,500.00. All
former executives waived their executive compensation, if any, and have signed
general releases to the Company to such effect.
All former executives have retired as officers, directors and employees
of the company with the exception that under the Agreement Xxx Xxxxxxxx remained
as a Company Director as on October 21, 1992 and entered into an Employment and
Performance Agreement providing for a $10,000 per annum salary commencing six
months from the date of execution of the Employment and Performance Agreement.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth as of November 12, 1993 the beneficial
ownership of the Company's Common Stock by (i) all persons known by the Company
to beneficially own more than 5% of the outstanding shares of the Company's
Common Stock, (ii) each director of the Company and (iii) all officers and
directors of the Company as a group.
Name and Address of Amount and Nature of Percent
Beneficial Ownership (1)(2) Beneficial Ownership of Class
--------------------------- -------------------- --------
Commonwealth Asset Management Corp. 13,000,000 54%
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Xxx Xxxxxxxx 970,000 4%
Xxx Xxxxxxxx Productions, Inc.
0000 Xxxxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
All Officers and Directors 970,000 4%
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83
(1) Unless otherwise noted, the Company believes that all persons named in
the table have sole voting and investment power with respect to all
shares of Common Stock owned by them.
(2) Includes outstanding Warrant No. 102 dated August 12, 1993 issued to
Xxx Xxxxxxxx for the purchase of 570,000 common shares at seventy-five
cents ($.75) per share exercisable at any time through July 31, 1998.
Item 13. Certain Relationships and Related Transactions.
On August 3, 1992 the Company and certain major shareholders entered
into agreement (the "Agreement") whereby Commonwealth Asset Management Corp.
("Commonwealth") agreed among other things to acquire 13,000,000 shares of the
Company's common stock (the "Shares"), in the following manner: 9,700,000 shares
of common stock from Xx. Xxxxx Xxxxxx out of the total of 10,700,000 issued and
outstanding in her name leaving a balance of 1,000,000 shares of common stock
issued and outstanding in the name of Xx. Xxxxx Xxxxxx, 1,650,000 shares of
common stock from Xxxxx X. Xxxxxx out of a total of 1,800,000 shares of common
stock issued and outstanding in his name leaving a balance of 150,000 shares of
common stock issued in the name of Xxxxx X. Xxxxxx and 1,650,000 shares of
common stock from Cem X. Xxxxxx out of a total of 1,800,000 shares of common
stock issued and outstanding in his name leaving a balance of 150,000 shares of
common stock issued and outstanding in his name.
In addition, the Agreement provides that in consideration for certain
services as finders provided by Xxxxxx X. Xxxxxx ("Galler") and Xxxxx Xxxxx
("Xxxxx") on behalf of the Company and Commonwealth, Galler received 1,000,000
restricted shares of the Company's common stock and Xxxxx received 500,000
restricted shares of the Company's common stock.
On October 21, 1992 Xxx Xxxxxxxx and the Company entered into
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84
an Employment and performance Agreement whereby Xxx Xxxxxxxx was employed by the
Company for seven years at a salary of $10,000 per annum commencing six months
from the date thereof and is required to devote as much time to the business
affairs of the company as may be required to perform his duties thereunder.
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85
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The following documents are filed as part of this report on Form 10-K.
1. Financial Statements
Independent Auditors' Report
Balance Sheets
Statements of Operations
Statements of Shareholders' Equity
Statements of Cash Flows
Notes to Financial Statements.
2. Schedules to Financial Statements
All schedules are omitted, as the information is not required, is not
material or is otherwise furnished.
3. Exhibits
The following exhibits are being filed with this Annual Report on Form
10-K and/or are incorporation by reference therein in accordance with the
designated footnote references.
3.1 Amended Articles of Incorporation (1).
3.2 Amended By Laws (2).
22. List of Subsidiaries of the Registrant:
King of Nostalgia, Inc.
-------------------------
(1) Filed with the Company's 1989 Annual Report on Form 10-K and
incorporated by reference.
(2) Filed with the Company's Post-Effective Amendment No. 2 dated September
17, 1987 to Registration Statement on Form S-18 and incorporated by
reference.
(b) Reports on Form 8-K
Not applicable.
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86
XXX XXXXXXXX PRODUCTIONS, INC.
INDEX TO FINANCIAL STATEMENTS
The following Financial Statements of Xxx Xxxxxxxx Productions, Inc.
are included in Item 8:
Independent Auditors' Report F-2
Financial Statements:
Balance Sheets - June 30, 1993 and 1992 F-3
Statements of Operations - Cumulative January 14, 1987 F-4
(Inception) through June 30, 1993;
years ended June 30, 1993, 1992 and 1991
Statements of Stockholders' Equity (Deficiency) - F-5
Years ended June 30, 1993, 1992 and 1991
Statements of Cash Flows - Cumulative January 14, 1987 F-6 - F-7
(Inception) through June 30, 1993;
years ended June 30, 1993, 1992 and 1991
Notes to Financial Statements F-8 - F-12
ALL OTHER SCHEDULES ARE OMITTED BECAUSE THEY ARE INAPPLICABLE, NOT REQUIRED, OR
THE INFORMATION IS INCLUDED ELSEWHERE IN THE FINANCIAL STATEMENTS OR NOTES
THERETO.
F-1
87
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Xxx Xxxxxxxx Productions, Inc.
Douglaston, New York
We have audited the accompanying balance sheet of Xxx Xxxxxxxx Productions, Inc.
(a development stage enterprise) as of June 30, 1993, and the related statements
of operations, stockholders' equity, (deficiency) and cash flows for the year
then ended, and for the period from January 14, 1987 (inception) to June 30,
1993. 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 audit. The Company's financial statements as of and for
the year ended June 30, 1992 and 1991, and for the period January 14, 1987
(inception) through June 30, 1992 were audited by other auditors whose report,
dated October 30, 1992, on those statements included an explanatory paragraph
which raised substantial doubt about the Company's ability to continue as a
going concern. The financial statements for the period January 14, 1987
(inception) through June 30, 1992 reflect total revenues and net loss of $49,672
and $962,897, respectively, of the related totals. The other auditors' report
has been furnished to us, and our opinion, insofar as it relates to the amounts
included for such prior period, is based solely on the report of such other
auditors.
We conducted our audit 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 statement presentation.
We believe that our audit and the report of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audit and the report of other auditors, such
financial statements present fairly, in all material aspects, the financial
position of Xxx Xxxxxxxx Productions, Inc. as of June 30, 1993, and the results
of its operations and its cash flows for the year then ended, and for the period
from January 14, 1987 (inception) to June 30, 1993, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note B to the financial
statements, the Company has suffered recurring losses from operations and has a
net capital deficiency that raises substantial doubt about its ability to
continue as a going concern. In the past, management and major shareholders have
funded the Company's operations; however continued support cannot be assured.
/s/ Xxxxxx & Sprung
Xxxxxx & Sprung
Certified Public Accountants
New York, New York
November 22, 1993, except for Note H
which is dated December 17, 1993
F-2
88
XXX XXXXXXXX PRODUCTIONS, INC.
(A Development Stage Enterprises)
BALANCE SHEETS
ASSETS
June 30, June 30,
1993 1992
----------- -----------
Current Assets:
Cash $ -- $ --
----------- -----------
TOTAL CURRENT ASSETS $ -- $ --
=========== ===========
LIABILITIES AND (DEFICIT IN ASSETS)
Current Liabilities:
Accrued expenses (Note C) $ 43,766 $ 139,411
Due to shareholders -- 42,942
----------- -----------
TOTAL CURRENT LIABILITIES 43,766 182,353
----------- -----------
(Deficit in Assets):
Common stock, $.001 par value,
authorized 25,000,000 shares, issued
and outstanding 24,103,792 and
22,283,792 shares 24,104 22,284
Additional paid - in capital 957,349 858,260
(Deficit) (1,025,219) (1,062,897)
----------- -----------
(43,766) (182,353)
----------- -----------
TOTAL LIABILITIES AND (DEFICIT IN ASSETS) $ -- $ --
=========== ===========
See notes to financial statements
F-3
89
XXX XXXXXXXX PRODUCTIONS, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
For the Period
January 14, 1987 Year ended June 30,
(inception) to ----------------------------------------------------
June 30, 1993 1993 1992 1991
---------------- ------------ ------------ ------------
Revenues $ 49,672 $ -- $ -- $ 8,802
------------ ------------ ------------ ------------
Costs and Expenses:
Festival expenses 27,500 -- -- --
Merger expenses 21,155 -- -- --
General and administrative expenses 1,151,260 92,346 9,885 333,456
Interest expense 18,904 -- -- --
------------ ------------ ------------ ------------
1,218,819 92,346 9,885 333,456
------------ ------------ ------------ ------------
NET (LOSS) BEFORE EXTRAORDINARY CREDIT (1,169,147) (92,346) (9,885) (324,654)
Extraordinary Credit:
Gain on debt restructuring (Note A) 243,928 130,024 -- --
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (925,219) $ 37,678 $ (9,885) $ (324,654)
============ ============ ============ ============
NET INCOME (LOSS) PER SHARE
Before extraordinary credit $ (0.07) $ (0.00) $ (0.00) $ (0.02)
Extraordinary credit 0.01 0.00 0.00 0.00
============ ============ ============ ============
NET INCOME (LOSS) PER SHARE $ (0.06) $ (0.00) $ (0.00) $ (0.02)
============ ============ ============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 16,691,740 23,952,125 22,283,792 17,431,026
============ ============ ============ ============
See notes to financial statements
F-4
90
XXX XXXXXXXX PRODUCTIONS, INC.
(A Development Stage Enterprise)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
Common Stock Unearned
------------------------------ Additional Portion of
$.001 par Paid - In Accumulated Stock Issued
Shares Issued Value Capital Deficit For Services
------------- ----------- ----------- ------------ ------------
BALANCE AT JUNE 30, 1990 14,738,050 $ 14,738 $ 553,125 $ (728,358) $ (15,000)
ISSUANCE OF COMMON STOCK:
For cash 2,393,333 2,393 93,447 -- --
For services 3,986,409 3,987 130,410 -- 15,000
Conversion of debt 1,166,000 1,166 81,278 -- --
NET LOSS FOR THE PERIOD -- -- -- (324,654) --
---------- ----------- ----------- ----------- -----------
BALANCE AT JUNE 30, 1991 22,283,792 22,284 858,260 (1,053,012) --
NET LOSS FOR THE PERIOD -- -- -- (9,885) --
---------- ----------- ----------- ----------- -----------
BALANCE AT JUNE 30, 1992 22,283,792 22,284 858,260 (1,062,897) --
CONTRIBUTION TO CAPITAL
(Note A) -- -- 91,809 -- --
ISSUANCE OF COMMON STOCK:
For services 1,820,000 1,820 7,280 -- --
NET INCOME FOR THE PERIOD -- -- -- 37,678 --
---------- ----------- ----------- ----------- -----------
BALANCE AT JUNE 30, 1993 24,103,792 $ 24,104 $ 957,349 $(1,025,219) $ --
========== =========== =========== =========== ===========
See notes to financial statements
F-5
91
XXX XXXXXXXX PRODUCTIONS, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
For the
period from
January 14, 1987 Year ended June 30,
(inception) to -----------------------------------
June 30, 1993 1993 1992 1991
---------------- --------- --------- ---------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS:
Cash flows from operating
activities:
Net Income/(Loss) $(925,219) $ 37,678 $ (9,885) $(324,654)
--------- --------- --------- ---------
Adjustments to reconcile
income (loss) to net
cash provided by (used in)
operating activities:
Depreciation 3,133 -- -- --
Shares issued for
services 289,496 9,100 -- 134,396
Contribution to capital 91,809 91,809 -- --
Change in assets and
liabilities:
Increase (decrease) in
accrued expenses 43,766 (138,587) 9,849 17,326
--------- --------- --------- ---------
TOTAL ADJUSTMENTS 428,204 37,678 9,849 151,722
--------- --------- --------- ---------
NET CASH (USED)/
PROVIDED BY OPERATIONS (497,015) -- (36) (172,932)
--------- --------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
(Additions) deletions to
fixed assets (3,133) -- -- --
--------- --------- --------- ---------
NET CASH (USED) IN
INVESTING ACTIVITIES (3,133) -- -- --
--------- --------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase (decrease) due
to shareholders -- -- -- (20,375)
Proceeds from sale of
common stock 600,148 -- -- 193,285
Capital distribution to
shareholders (100,000) -- -- --
--------- --------- --------- ---------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 500,148 -- -- 172,910
--------- --------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS -- -- (36) (22)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR -- -- 36 58
--------- --------- --------- ---------
F-6
92
XXX XXXXXXXX PRODUCTIONS, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
continued
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ -- $ -- $ -- $ 36
========= ========= ========= =========
CASH PAID FOR INTEREST AND
TAXES $ -- $ -- $ -- $ --
========= ========= ========= =========
ON-CASH FINANCING
ACTIVITIES:
Conversion of debt for
common stock $ 174,944 $ -- $ -- $ --
========= ========= ========= =========
Common stock issued for
services $ 289,496 $ 9,100 $ -- $ 134,396
========= ========= ========= =========
See notes for financial statements
F-7
93
XXX XXXXXXXX PRODUCTIONS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
A. ORGANIZATION OF THE COMPANY
The Company was formed to be an entertainment production and marketing company
concentrating on the production, repackaging and distribution of nostalgia and
memorabilia products. From August 1990 to on or about December 1, 1991, the
Company had also been engaged in the development of a facsimile services
business providing world-wide facsimile transmission and receiving capabilities
on high-speed digital communications technology.
As of December 1, 1991, the Company had ceased the development of the
aforementioned business lines due to the lack of cash and capital resources.
On August 3, 1992, the Company, certain major shareholders and Commonwealth
Asset Management Corp., "Commonwealth", entered into an agreement whereby
Commonwealth acquired 13,000,000 shares or 58.3% of the Company's outstanding
common stock. The agreement provided that all former executives retire as
officers, directors and employees of the Company except that Xxx Xxxxxxxx would
remain as a Company director. Commonwealth agreed to pay negotiated settlements
of liabilities including the transfer of the assets of the Company's facsimile
services business in exchange for the settlement of certain debts to
shareholders. The Company agreed to issue 1,500,000 shares of common stock as
finders fees to two individuals for their services and 320,000 shares of common
stock for legal services rendered in this transaction.
Since the date of the agreement Commonwealth has advanced funds to operate the
business of the Company in the form of marketing, consulting, professional fees
and other general and administrative expenses. The Company has no bank account
and uses an executive office provided by Commonwealth at a nominal monthly
charge. All of the operating expenses funded by Commonwealth and payments made
in settlement of liabilities were recorded as capital contributions to the
Company.
On October 29, 1993, the Company entered into an agreement with Sports Heroes,
Inc. to form a new marketing entity, to engage in the marketing of entertainment
memorabilia including the Xxx Xxxxxxxx Collection (See subsequent events Note
H).
F-8
94
XXX XXXXXXXX PRODUCTIONS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
B. SIGNIFICANT ACCOUNTING POLICIES
1. The Company's financial statements have been presented on the basis
that it is a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of
business.
The Company has incurred net losses of $925,219 from January 14, 1987
through June 30, 1993. In addition, the Company has a working capital
deficiency of $43,766 and a deficiency in assets of $43,766 as of June
30, 1993. Accordingly, continued existence is dependent upon the
Company's ability to resolve its liquidity problem, principally by
obtaining additional equity capital or debt financing, neither of which
can be assured.
2. The Xxx Xxxxxxxx collection consists of the nostalgia collection of
artifacts, posters, films, records, etc. which have been collected by
Xx. Xxxxxxxx during his career. The collection was transferred to the
Company at the time of the Company's organization by Xx. Xxxxxxxx for a
$100,000 note. The collection has been recorded at $-0- value as the
accounting practices of the staff of Securities and Exchange Commission
do not permit a valuation to be used in light of the fact that Xx.
Xxxxxxxx does not have an auditable carryover basis of his collection.
Future expenditures will be recorded at cost and amortized over the
estimated useful life of the property.
3. Furniture has been recorded at cost and is being depreciated over seven
years on an accelerated method of accounting. The furniture was
disposed of and written off in fiscal 1990.
4. Per share data has been computed based on the weighted average number
of shares outstanding.
5. Issuance of common stock for services have been valued at the estimated
value of service performed.
6. Certain amounts in the accompanying financial statements have been
reclassified to conform to the 1993 presentation.
F-9
95
XXX XXXXXXXX PRODUCTIONS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
C. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following:
June 30,
-----------------------
1993 1992
-------- --------
Professional fees due $ 25,017 $ 82,107
Accrued salary - Xxx Xxxxxxxx 2,500 --
Other 16,249 57,304
-------- --------
$ 43,766 $139,411
======== ========
D. INCOME TAXES
Because of a prior change of ownership, the loss carryforward has been
restricted as required by the Internal Revenue Code Section 382. The utilization
of the loss carryforward, which totals approximately $1,000,000, is limited to
$15,000 per year. However, it is believed that the inventory has a substantial
built in gain. Any gain on the sale of such inventory may also be sheltered by
the loss carryforward.
E. COMMON STOCK
1. In August 1990, the Company granted to a major shareholder an option to
purchase 4,000,000 shares of common stock at $.06 per share. As of
November 1, 1990, the shareholder exercised the options to purchase
665,742 shares of common in exchange for $39,945 owed to the
shareholder as of June 30, 1990. The shareholder assigned his rights to
exercise 850,000 options, which such options have been exercised. The
balance of 2,484,258 options were canceled as a result of the August 3,
1992 agreement (Note A).
2. In August 1990, two investors contributed $27,000 each to capital for a
total of 1,800,000 shares of common stock. Such monies have been used
solely for the development of a new business. "The Fax Exchange," which
was a division of the Company.
3. Additionally, the Company has entered into two-year consulting
agreements with the same investors at $8,000 per month each through
August 1992 in consideration of their full-time
F-10
96
XXX XXXXXXXX PRODUCTIONS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
E. COMMON STOCK (continued)
3. (continued)
employment. The Company issued an additional 900,000 shares each for
services rendered which have been valued at an aggregate of $54,000.
The Company has the option to repurchase 900,000 shares of common stock
for $1.00 from each employee under certain circumstances. The
consulting agreements were terminated as a result of the August 3, 1992
agreement (Note A).
4. In October 1990, the Company's President exchanged $35,000 of accrued
compensation due for 350,000 shares of common stock.
5. In October and December 1990, individuals invested $21,000 and $16,000
for 350,000 and 160,000 shares of common stock, respectively.
6. During December 1990, the Company issued 487,000 shares of common stock
for services rendered to the Company, which have been valued at
$20,000.
7. During the year ending June 30, 1991, the Company issued 1,700,000
shares of common stock for services rendered by the principal
shareholder and officer of the Company. Approximately $50,000 has been
expensed for the issuance of such shares.
8. In connection with the August 3, 1992 agreement (Note A) 1,820,000
shares of common stock were issued for finders fees and for legal
services and have been valued at $9,100.
F. WARRANTS AND OPTIONS OUTSTANDING
The Company had two classes of warrants outstanding, Class A and Class B which
expired on June 4, 1991.
The Company has sold to the underwriter warrants exercisable at $.6955 per
warrant through June 3, 1992.
See Note H for additional warrants outstanding.
F-11
97
XXX XXXXXXXX PRODUCTIONS, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
G. COMMITMENT
On October 21, 1992 Xxx Xxxxxxxx and the Company entered into an Employment and
performance Agreement whereby Xxx Xxxxxxxx is to be employed by the Company for
seven years at a salary of $10,000 per annum commencing six months from the date
of the agreement and is required to devote as much time to the business affairs
of the Company as may be required to perform his duties thereunder.
H. SUBSEQUENT EVENTS
On August 11, 1993, the Company issued a Warrant to Xxx Xxxxxxxx in exchange for
the release by Xx. Xxxxxxxx of all accrued salary due him through that date in
the amount of $3,846. The Warrantholder is entitled to purchase 600,000 shares
of common stock of the Company prior to July 31, 1998 at seventy five cents
($.75) per share.
On October 29, 1993, the Company entered into an agreement with Sports Heroes,
Inc. (SHI), its newly formed subsidiary (KNI) and a wholly-owned newly formed
subsidiary of the Company (EHL). The agreement provides for the formation of a
Partnership to engage in the marketing of entertainment memorabilia including
the Xxx Xxxxxxxx Collection. KNI and EHL are the general partners of the
Partnership and the Company, SHI and an unaffiliated third party are the limited
partners of the Partnership.
The agreement also provides, in part, that the Company is to receive 5% of the
Partnership's gross revenues and, as a limited partner of the Partnership, 44.1%
of 99% of the Partnership's profits and losses, SHI is to receive, as a limited
partner of the Partnership, 51% of 99% of the Partnership's profits and losses
and the unaffiliated third party is to receive, as a limited partner of the
Partnership, 4.9% of 99% of the Partnership's profits and losses. The Company is
to transfer to the Partnership, the Xxx Xxxxxxxx Collection in exchange for up
to 200,000 restricted shares of SHI common stock. 15,000 of such restricted
shares are to be issued to the Company's law firm for legal services rendered.
The agreement further provides that SHI shall have the option to terminate the
agreement in the event an independent appraisal values the Xxx Xxxxxxxx
Collection at less than $1,000,000. The agreement may also be terminated in the
event SHI does not receive approval of its Board of Directors and its principal
lender prior to January 20, 1994. On December 17, 1993 the Company's
shareholders approved the agreement.
F-12
98
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of The Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
XXX XXXXXXXX PRODUCTION, INC.
By: /s/ Xxxx Xxxxxxxx, President
-----------------------------------------
Xxxx Xxxxxxxx, President
Date: January 25, 1994
Pursuant to the requirements of 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.
Signature Title Date
--------- ----- ----
President Chief Executive January 25, 1994
/s/ Xxxx Xxxxxxxx Officer Treasurer,
------------------------ Secretary and Director
Xxxx Xxxxxxxx
/s/ Xxx Xxxxxxxx Director January 25, 1994
------------------------
Xxx Xxxxxxxx
99
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1993 Commission File No. 0-16525
XXX XXXXXXXX PRODUCTIONS, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 00-0000000
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
00-00 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx Xxx Xxxx 00000
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (000) 000-0000
--------------
Indicate by check xxxx whether the registrant (1) has 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
----- -----
COMMON STOCK OUTSTANDING AS OF MARCH 31, 1993 - 24,103,792, SHARES.
100
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
(UNAUDITED)
ASSETS
March 31, June 30,
1993 1992
----------- -----------
Current Assets:
Cash $ -0- $ -0-
----------- -----------
TOTAL CURRENT ASSETS $ -0- $ -0-
----------- -----------
LIABILITIES AND (DEFICIT IN ASSETS)
Current Liabilities:
Accrued expenses $ 32,952 $ 139,411
Due to shareholder 42,942 42,942
----------- -----------
TOTAL CURRENT LIABILITIES 75,894 182,353
----------- -----------
(Deficit in Assets):
Common stock, $.001 par value, authorized
25,000,000 shares, issued and outstanding
24,103,792 and 22,283,792 shares 24,104 22,284
Additional paid - in capital 911,944 858,260
(Deficit) (1,011,942) (1,062,897)
----------- -----------
(75,894) (182,353)
----------- -----------
TOTAL LIABILITIES AND (DEFICITS IN ASSETS) $ -0- $ -0-
=========== ===========
See notes to financial statements
101
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
(UNAUDITED)
For the Period For the three months For the nine months
January 14, 1987 ended March 31, ended March 31,
(inception) to ------------------------------ ------------------------------
March 31, 1993 1993 1992 1993 1992
---------------- ------------ ------------ ------------ ------------
Revenues $ 49,672 $ -0- $ -0- $ -0- $ -0-
------------ ------------ ------------ ------------ ------------
Costs and Expenses:
Festival expenses 27,500 -0- -0- -0- -0-
Xxxxxx expenses 21,155 -0- -0- -0- -0-
General and administrative
expenses 1,095,041 11,884 1,221 36,127 5,766
Interest expense 18,904 -0- -0- -0- -0-
------------ ------------ ------------ ------------ ------------
1,162,600 11,884 1,122 36,127 5,766
------------ ------------ ------------ ------------ ------------
NET (LOSS) BEFORE EXTRAORDINARY
CREDIT (1,112,928) (11,884) (1,221) (36,127) (5,766)
Extraordinary Credit:
Gain on debt restructuring
(Note 3c) 200,986 -0- -0- 87,082 -0-
------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (911,942) $ (11,884) $ (1,221) $ 50,955 $ (5,766)
------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) PER SHARE $ (.04) $ (.00) $ (.00) $ (.00) $ (.00)
============ ============ ============ ============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 24,103,792 24,103,792 22,283,792 24,103,792 22,283,792
============ ============ ============ ============ ============
102
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the For the nine
period from months ended
January 14, 1987 March 31,
(inception) to ---------------------------
March 31, 1993 1993 1992
--------- -------- -------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS:
Cash flows from operating activities:
Net earnings $(911,942) $ 50,955 $(5,766)
--------- -------- -------
Adjustment to reconcile income to net cash
provided by operating activities:
Depreciation 3,133 -0- -0-
Change in assets and liabilities:
Increase (decrease) in accrued expenses 7,952 (106,459) (5,766)
--------- -------- -------
TOTAL ADJUSTMENTS 11,085 (106,459) (5,766)
NET CASH (USED)/PROVIDED BY OPERATIONS (900,857) (55,504) -0-
--------- -------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Additions) deletions to fixed assets (3,133) -0- -0-
--------- -------- -------
NET CASH (USED) IN INVESTING ACTIVITIES (3,133) -0- -0-
--------- -------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Increase (decrease) in long-term debt -0- -0- -0-
Increase (decrease) in due to shareholders 42,942 -0- -0-
Proceeds from sale of common stock 905,544 -0- -0-
Capital distribution to shareholders (100,000) -0- -0-
Additional paid in capital 53,684 53,684 -0-
Capital stock issued and outstanding 1,820 1,820 -0-
--------- -------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES 903,990 55,504 -0-
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS -0- -0- -0-
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD -0- -0- -0-
--------- -------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD -0- -0- -0-
========= ======== =======
CASH PAID FOR INTEREST AND TAXES -0- -0- -0-
========= ======== =======
NON-CASH FINANCING ACTIVITIES:
Conversion of debt for common stock $ 174,944 -0- -0-
========= ======== =======
See notes to financial statements
103
XXX XXXXXXXX PRODUCTIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED MARCH 31, 1993
(UNAUDITED)
1. BASIS OF PRESENTATION
Reference is made to the report on Form 10-k for the year ended June
30, 1992.
The financial statements of the periods ended March 31, 1993 and 1992
are unaudited and include all adjustments which, in the opinion of
management, are necessary to a fair statement of the results of
operations for the periods then ended. All such adjustments are of a
normal recurring nature. The results of the company's operation for an
interim period are not necessarily indicative of the results of the
Company's operation for a full fiscal year.
2. DESCRIPTION OF COMPANY
The company was formed to be an entertainment production and marketing
company concentration on the production, repackaging and distribution
of nostalgia and memorabilia products.
3. SIGNIFICANT ACCOUNTING POLICIES
a. Financial statements are prepared on an accrual basis.
b. The collection consists of the nostalgia collection of
artifacts, posters, films, records, etc. which have been
collected by Mr. Xxx Xxxxxxxx during his career. The
collection has been recorded -0- value as the accounting
practices of the Staff of the Securities and Exchange
Commission does not permit a valuation to be used in light of
the fact that Xx. Xxxxxxxx does not have an auditable
carryover basis for his collection.
Future expenditures will be recorded at cost and amortized
over the estimated useful life of the property.
c. Per share data has been computed based on average number of
shares.
d. Issuance of common stock for services have been valued at the
estimated value of the services performed.
104
ITEM 1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT
OF OPERATIONS
Results of Operations - Three months and nine months ended March 31, 1993.
The Company is in the development stage. Accordingly, it has no revenues and has
incurred various expenses.
Liquidity and Capital Resources
The Company's present liquidity and capital resources are limited to its cash on
hand. Such cash is insufficient to enable the Company to develop its business
plans.
105
PART II
ITEM 1. LEGAL PROCEEDINGS
Yes. Proskauer, Rose, Xxxxx & Xxxxxxxxx V. Xxx Xxxxxxxx
Productions, Inc. (the "Company") Civil Court of the City of
New York, New York (the "Action") seeking recovery of
approximately $10,000 for legal services provided to the
Company. The action was settled on April 26, 1993 for the sum
of $2,000, payment of which has been made by the Company.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
106
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registration has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
XXX XXXXXXXX PRODUCTIONS, INC.
By: /s/ Xxxx Xxxxxxxx, PRESIDENT
-----------------------------------------
Xxxx Xxxxxxxx, President
107
JFP List of Agreements
1. Agreement dated October 29, 1993 between Xxx Xxxxxxxx
Productions, Inc., Sports Heroes, Inc. et. al. (the
"Agreement")
2. Amendment to the Agreement dated November 18, 1993
3. Second Amendment to the Agreement dated December 20, 1993
4. Third Amendment to the Agreement dated August 15, 1994
5. Finders Agreement dated August 2, 1993 between Xxx Xxxxxxxx
Productions, Inc. and Xxxxxxxx X. Xxxxxxxxx
6. Employment Agreement dated September 25, 1992 between Xxx
Xxxxxxxx Productions, Inc. and Xxx Xxxxxxxx
EXHIBIT "E"
108
ENUMERATED LIABILITIES
American Stock Transfer & Trust Company $ 5,562.75
Doros & Brescia, P.C. 12,281.38
Xxxxxx X. Xxxxxx, C.P.A. 2,000.00
Xxxxxx, Xxxxxx & Xxxxx 1,670.00
----------
$21,514.13
EXHIBIT "F"
109
EMPLOYMENT AND PERFORMANCE AGREEMENT
AGREEMENT made the 25th day of September, 1992 between XXX XXXXXXXX
(hereinafter called the "Executive") and XXX XXXXXXXX PRODUCTIONS, INC., a
Nevada corporation (hereinafter called the "Company").
WHEREAS, Executive is a radio and television personality, nationally
syndicated newspaper columnist and author: and
WHEREAS, the Company deems it to be in its best interests to employ the
Executive due to Executive's unique experience and expertise in the
entertainment industry, and the Executive wishes to be employed by the Company
on the terms and conditions set forth below;
NOW THEREFORE, in consideration of the mutual premises herein
contained, the Company and the Executive agree as follows:
1. Employment
(a) The Company hereby employs the Executive as its Consultant
and Advisor and the Executive hereby accepts such employment, upon the terms and
conditions herein set forth:
(b) Executive's duties shall be as a senior executive of the
Company, and shall be subject to such policies and directions as may be
established or given by the Company's Board of Directors from time to time. The
Executive shall devote as much of his entire business time to the business and
affairs of the Company as may be required to perform his duties hereunder but in
any event not less than fifty (50%) percent of his entire business time. The
EXHIBIT "G"
110
Executive and the Company agree that Executive shall be permitted to retain his
current position with WWOR as a radio and television talk show host (the "Host
Positions"), during the term of this Agreement.
2. Term
(a) The term of this Agreement shall be for a period of seven
(7) years commencing on the date hereof and terminating seven (7) years from
such date ("Termination Date") and shall thereafter continue at will terminable
on ninety (90) days written notice (the "Termination Notice") certified mail
return receipt requested by either party to the other which notice may be given
prior to the Termination Date provided that the effective date of termination
set forth in the Termination Notice is after the Termination Date.
(b) The Termination Notice shall be sent to the parties as
provided in Paragraph 10 herein.
3. Compensation; Other Benefits
(a) As compensation for the services hereunder during the term
of this Agreement, the Company shall pay to the Executive, and the Executive
shall accept, a salary of Ten Thousand and 00/100 ($10,000) Dollars per annum
during the term of this Agreement. Such salary shall be payable bi-monthly in
accordance with the customary payroll practices, subject to any deductions or
withholding required by applicable law. Executive hereby agrees to
-2-
111
waive and forego all salary during the first six (6) months from the date of the
execution of this Agreement.
(b) The Board of Directors of the Company shall review the
Executive's compensation and benefits at least once each year, and may, in its
sole discretion, increase the Executive's salary and/or award performance
bonuses to the Executive.
(c) Provided that the Executive shall at all times have
fulfilled his obligations under this Agreement, in addition to the salary
payable pursuant to paragraph 3(a) hereof, the Executive shall be entitled
during the term of this Agreement, to receive or participate in all corporate
benefit programs, if any, including programs relating to the granting of
incentive stock options, commensurate with the status of other senior executives
of comparable rank of the Company, should such benefit programs be subsequently
adopted by the Company.
4. Expenses
The Company shall reimburse the Executive for all reasonable travel and
other out-of-pocket expenses and disbursements which may be incurred by the
Executive in the performance of the services hereunder, upon presentation by the
Executive of expense statements or vouchers and such other supporting
information that the Company may customarily require of the Executive.
Notwithstanding the foregoing, the Executive shall not incur any expenses
exceeding $1,000 in amount without the receiving prior permission of the
Company.
-3-
112
5. Vacation
The Executive shall be entitled to annual paid vacations of two (2)
weeks per year. Such vacation will be taken from time to time during the year as
shall be consistent with the requirements of the Company and the Executive.
6. Termination
(a) The Company shall have the right to terminate this
Agreement and the employment of the Executive hereunder by written notice to the
Executive at any time during the term hereof (i) in the event of the disability
of the Executive (as the term "disability" is defined in paragraph (b) below);
(ii) for cause (as the term "cause" is defined in paragraph (c) below). Said
Notice shall be given in accordance with paragraph 10 herein.
(b) As used herein, the term "disability" shall mean inability
or incapacity of the Executive due to absence or illness to perform his duties
to the Company for a period of two (2) or more consecutive months.
(c) As used herein, the term "cause" includes embezzlement,
theft or other criminal act under either Federal or state law constituting a
felony, or failure to comply with the terms and conditions of this Agreement
which failure shall continue for a period of seven (7) days after the Board of
Directors gives written notice to the Executive specifying in detail the acts or
omissions considered to constitute such failure to comply.
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(d) Termination of this Agreement and the Executive's
employment thereunder shall not, except if such termination is for cause,
adversely affect any right of the Executive to receive any salary, benefits or
other compensation to which the Executive become entitled prior to the date of
termination.
7. Trade Secrets
The Executive hereby acknowledges that, as a result of his employment
hereunder, he will be privy to various confidential business matters and trade
secrets relating to the Companies businesses and proposed businesses. Executive
agrees that all such trade secrets, marketing programs, business contacts, or
customer lists, including but not limited to the Company's Nostalgia and
Memorabilia library (the "Library") which Library includes, but is not limited,
to the following items: Silent and sound films, two-reeler silent and sound
films, feature films, vintage phonograph records (78S, 45S and 33S) recordings,
posters, prints, lobby cards, sheet music, one of a kind posters, theater stage
and vaudeville memorabilia, bound volumes of newspapers, show business magazines
circa 1906-1940, network radio memorabilia, antique postcards and baseball
collectibles, and any other information or documentation to which he may become
privy as a result of his employment hereunder (collectively, "Trade Secrets"),
are the property of the Company and that he will not, at any time during the
term of this Agreement or thereafter, directly or indirectly,
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disclose or divulge, sell or allow to be used, or utilize in any shape, form or
manner whatsoever, such Trade Secrets whether by identical duplication of such
Trade Secret, or by attempting to utilize any substantially similar version of
the same, in any manner other than pursuant to his employment hereunder. The
Executive acknowledges that the breach or threatened breach of this paragraph
may cause irreparable harm to the Company and, as such, damages to compensate
the Company for such breach or threatened breach are inadequate as a matter of
law, and therefore, the Executive agrees that in the event of a breach or
threatened breach of the provisions of this paragraph, the Company shall be
entitled to seek injunctive relief to prevent such breach or threatened breach
and any other remedies available to it at law or equity.
If any provisions of this paragraph are deemed by a court to be
unenforceable, whether as a matter of public policy, reasonableness, or for any
reason whatsoever, the Executive agrees that it is the intent of the parties to
enforce the spirit of such provisions to the fullest extent permitted by law,
and that any court adjudicating such provisions shall take cognizance of the
fact that such was the intent of the parties at the time of the making of this
Agreement.
8. Representation and Warranties of Xxx Xxxxxxxx
Executive hereby represents and warrants that he intends to retain his
Host Positions with WWOR radio and television during the term of this Agreement
and shall use his best efforts at all
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times to retain the Host Positions during the term of this Agreement.
9. Arbitration
Any dispute, controversy or claim arising under or in relation to this
Agreement or any modification thereof, shall be settled by arbitration which
shall be held in the City of New York in accordance with the laws of the State
of New York and the rules then obtaining of the American Arbitration
Association. The parties hereto consent to the jurisdiction of the Supreme Court
of the State of New York or the United States District Court for the Southern
District of New York and further consent that any process or notice or other
application to any court or a Judge thereof, may be served within or without the
State of New York or Southern District of New York by certified mail to the
addresses listed in Paragraph 9 herein or by personal service, provided a
reasonable time for appearance is allowed. Judgment upon the award rendered by
the arbitrator(s) may be entered in any state or Federal court having
jurisdiction thereof.
Anything herein to the contrary notwithstanding, in the event of the
breach or threatened breached by any party bound by this Agreement of any of
such party's obligations hereunder, it is acknowledged that the other parities
bound by this Agreement will not have an adequate remedy at law and shall be
entitled in any court of competent jurisdiction to such equitable and injunctive
relief as may be available.
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10. Notices
All notices under this Agreement must be in writing, and if to the
Company, will be duly given only if delivered by hand, or if addressed and
mailed by certified mail, return receipt requested, to the Company c/o
Commonwealth Asset Management Corp., 00-00 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx
Xxxx 00000, Attention: Xx. Xxxx Xxxxxxxx, President or such other address as the
Company may hereafter designate by such notice; or if to the Executive, will be
duly given only if delivered by hand, or if addressed and mailed by certified
mail, return receipt requested, to the Executive at 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 or such other address as the Executive may hereafter
designate by written notice.
11. Waiver of Breach
The waiver by either party of a breach by the other party of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by such party.
12. Successors and Assigns
This Agreement shall inure to the benefit of and be binding upon the
Company, its successors and assigns, and upon the Executive, his heirs,
executors, administrators, and legal representatives.
13. Governing Law
This Agreement shall be construed in accordance with the laws of the
State of New York.
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14. Entire Agreement
This instrument contains the entire agreement of the parties and
supersedes and revokes any prior Employment Agreements made between the Company
and the Executive. It may not be changed or terminated orally, but may be
changed only by an agreement in writing signed by the party against whom
enforcement or any waiver, change, modification, extension, discharge or
termination is sought.
15. Severability
Invalidity, illegality or unenforceability of any provision hereof
shall not in any way effect, impair, invalidate, or render unenforceable any
other provision hereof.
16. Survival
All of the provisions of paragraphs 7 and 8 hereof shall survive any
termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXX XXXXXXXX PRODUCTIONS, INC.
By:
-----------------------------------------
Its Authorized Officer
/s/ Xxx Xxxxxxxx
--------------------------------------------
Xxx Xxxxxxxx
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STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 25th day of September, 1992 before me personally came Xxxx
Xxxxxxxx to me known and who, being duly sworn by me did depose and say that he
is the President of Xxx Xxxxxxxx Productions, Inc., the corporation described in
and which executed the foregoing instrument; that he resides at Xxxxxxxxxx, Xxx
Xxxx 00000; that he knows the seal of said corporation; that the seal affixed to
the foregoing instrument is such corporation seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his name
thereto by like order.
-----------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 25th day of September, 1992 before me personally came Xxx
Xxxxxxxx to me known and known to me to be the person described in and who
executed the foregoing instrument and he duly acknowledged to me that he
executed the same.
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Notary Public
[SEAL]
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