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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ___________________
Commission File Number 0-9455
LITTLE PRINCE PRODUCTIONS LIMITED
(Exact name of registrant as specified in its charter)
New York 13-3045713
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
38 South Audley Street, London, England W1Y 5DH N/A
(Address of principal executive offices) (Zip Code)
(010 44 171) 629-7617
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that registrant was required to file such reports), and (2)
has been subject to filing requirements for the past 90 days. Yes X No
--- ---
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. As of August 5, 1996, there
were 24,999,236 shares of the issuer's $.01 par value common stock outstanding.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
LITTLE PRINCE PRODUCTIONS LIMITED AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
June 30, 1996 and December 31, 1995
June 30, December 31,
-------- ------------
1996 1995
---- ----
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,635 $ 946
Prepaid expenses and taxes 612 612
Other debtors 6,629 6,629
----- -----
Total current assets 9,876 8,187
PROPERTY AND EQUIPMENT - AT COST
Furniture, fixtures and equipment -- --
Less: Accumulated depreciation -- --
-------- --------
Net property and equipment -- --
OTHER ASSETS
Production and distribution rights 3,750 5,000
Investment in joint ventures 3,728 3,728
------ ------
Total other assets 7,478 8,728
------ ------
TOTAL ASSETS $17,354 $16,915
======= =======
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LITTLE PRINCE PRODUCTIONS LIMITED AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Continued)
June 30, 1996 and December 31, 1995
June 30, December 31,
-------- ------------
1996 1995
---- ----
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 159,145 $ 159,145
Provision for legal fees 15,917 15,322
Accrued audit fees 7,364 13,000
Other accrued liabilities 5,544 4,494
Short-term loans from major shareholder 120,085 92,355
---------- ---------
Total current liabilities 308,055 284,326
NON-CURRENT LIABILITIES -- --
---------- ----------
TOTAL LIABILITIES 308,055 284,326
SHAREHOLDERS' EQUITY
Common stock $0.01 par value
Authorized - 25,000,000 shares
Issued and outstanding - 24,999,236 shares 249,992 249,992
Additional paid-in capital 3,006,891 3,006,891
Accumulated deficit (3,547,584) (3,524,294)
----------- -----------
Total shareholders' deficit (290,701) (267,411)
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' $ 17,354 $ 16,915
========== ==========
EQUITY
3
LITTLE PRINCE PRODUCTIONS LIMITED AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months and Six Months Ended June 30, 1996 and 1995
Three Months ended June 30, Six Months ended June 30,
--------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
Net sales $ 1,000 $ 1,100 $ 6,241 $ 5,600
Operating costs (12,359) (39,049) (29,531) (65,451)
---------- ---------- ---------- ----------
Loss from continuing operations (11,359) (37,949) (23,290) (59,851)
Interest income -- 110 -- 214
Interest expense -- -- -- --
---------- ---------- ---------- ----------
Loss from continuing operations
before provision for income
taxes (11,359) (37,839) (23,290) (59,637)
Provision for income taxes -- -- -- --
---------- ---------- ---------- ----------
Loss from continuing operations
after provision for income taxes (11,359) (37,839) (23,290) (59,637)
Loss from discontinued -- -- -- --
operations
Gain on disposal of subsidiary -- -- -- --
NET LOSS (11,359) (37,839) (23,290) (59,637)
========== ========== ========== ==========
Loss per share (cents) (0.04) (0.15) (0.09) (0.24)
========== ========== ========== ==========
Average number of shares 24,999,236 24,999,236 24,999,236 24,999,236
outstanding ========== ========== ========== ==========
4
LITTLE PRINCE PRODUCTIONS LIMITED AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 1996
Six Months ended June 30,
-----------------------------------------------
1996 1995
---- ----
OPERATING ACTIVITIES
Net loss $ (23,290) $(59,637)
Adjustments to reconcile net loss to Net Cash
Provided by Operating Activities:
Depreciation 1,250 1,250
Minority interests -- --
Change in Asset and Liabilities:
Accounts Receivable and Other Debtors -- --
Development Properties -- --
Increase/(Decrease) in Liabilities:
Accounts payable and Accrued Expenses (4,001) (23,000)
Effect of foreign currency exchange rate
changes on cash and cash equivalents -- --
Adjustment on disposal of subsidiary -- --
--------- --------
Total Adjustments (2,751) (21,750)
--------- --------
NET CASH - OPERATING ACTIVITIES (26,041) (81,387)
INVESTING ACTIVITIES:
Proceeds on disposal of subsidiary -- --
Proceeds on disposal of US Government Bonds -- 9,500
--------- --------
NET CASH - INVESTING ACTIVITIES -- 9,500
FINANCING ACTIVITIES
New short-term loans 27,730 69,030
Repayment of loans -- --
Bank Overdrafts -- --
Cash released on disposal of subsidiary -- --
--------- --------
NET CASH - FINANCING ACTIVITIES 27,730 69,030
NET (DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENTS 1,689 (2,857)
CASH AND CASH EQUIVALENTS -
BEGINNING 946 5,241
--------- --------
CASH AND CASH EQUIVALENTS - END 2,635 2,384
========= ========
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LITTLE PRINCE PRODUCTIONS LIMITED AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
(Revised and Unaudited)
The balance sheet as of June 30, 1996, the statements of operations for the six
months ended June 30, 1995 and 1996, and the statement of cash flows for the six
months ended June 30, 1995 and 1996 have been prepared by registrant without
audit. The accompanying unaudited interim financial statements include all
adjustments (consisting only of those of a normal recurring nature) which in the
opinion of management are necessary for a fair statement of the results for the
interim periods.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these financial statements
be read in conjunction with the financial statements and notes thereto included
in registrant's Form 10-KSB for the year ended December 31, 1995.
6
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Financial Condition
A Shareholders' deficit of $290,701 existed at June 30, 1996. The
majority of the expenditures of Registrant over the 18-month period ended June
30, 1996 have been met from funding provided in the form of loans from Patchouli
which at June 30, 1996 totalled $120,085, of which $9,111 were advanced in the
quarter ended June 30, 1996. Patchouli has continued to advance further funds
since that date.
Results of Operations
Income in the quarter arose from fees received from the licensing of
various theatrical productions. This income did not reflect any change in the
business of Registrant but typified the nature and timing of the income
generated.
During 1995 and the first half of 1996, the Company was inactive except
for administrative activities in connection with the preparation and filing of
the periodic reports required under Section 13 of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and in preparing the proxy statement for a
Special Meeting of Shareholders that was held on February 29, 1996. The majority
of the operating costs of $12,359 incurred in the quarter to June 30, 1996
related specifically to the audit, accounting and legal costs.
To date, the Company has not consummated the Merger, as discussed in
Registrants Form 10- QSB for the quarter ended March 31, 1996, as it is still
awaiting the consent of the New York Commissioner of Taxation and Finance, which
consent is required in order to file the Certificate of Merger with the
Secretary of State of New York. The Company has recently received certain tax
information from the New York Department of Taxation and Finance and expects to
file its past-due tax returns in addition to the Certificate of Merger by August
9, 1996. The Company believes that the Merger will become effective by the end
of August, 1996.
On July 22, 1996 the Company completed the disposal of the whole of its
interest in its former subsidiary LPPL Corp. A detailed description of this
transaction is contained in "Part II. Item 5, Other Information" of this report.
Future Liquidity and Capital Resources
LPPL Corp. constituted substantially all of the Company's assets and
only form of revenue. Until the Merger becomes effective, the Company is
dependent in the short term from continued loans from Patchouli. Upon
consummation of the Merger the Company intends to acquire through the issuance
of additional shares a suitable business or businesses and/or to obtain
additional funds through the sale of Common Stock in public or private
transactions.
7
Registrant had no material commitments for capital expenditure at
either June 30, 1996 or at December 31, 1995.
PART II. OTHER INFORMATION
Item 5. Other Information
At the Special Meeting of Shareholders held on February 29, 1996, the
Company's shareholders approved an action authorizing the Company's Board of
Directors to sell or dissolve LPPL Corp. In accordance therewith, on July 22,
1996, the Company sold its ownership interest in all of the issued and
outstanding capital stock of LPPL Corp. (the "Capital Stock") to Frances Katz
Levine, an independent third party, pursuant to that certain Stock Purchase
Agreement (the "Agreement") dated July 22, 1996. As consideration for the
capital stock, the Company received $10 and Ms. Levine's agreement to use her
best efforts to effect and complete by July 21, 1997, at no cost to the Company,
the reincorporation of LPPL Corp. under the state of Delaware, and,
concomitantly therewith, increase the number of shares of authorized capital
stock of LPPL Corp. and distribute the shares of common stock of LPPL Corp. to
the shareholders of the Company as of July 22, 1996 at a ratio of one share of
the Capital Stock for every one share of common stock of the Company or such
other ratio as required by the attendant circumstances, which distribution shall
be made in accordance with the requirements of all applicable federal and state
securities laws and regulations. In the event Ms. Levine fails to complete the
above actions by July 21, 1997, she shall immediately take all steps necessary
to dissolve LPPL Corp. and deliver any assets remaining after dissolution, if
any, to the Company.
LPPL Corp. represented substantially all of the Company's assets. The
effect of the sale of LPPL Corp. on the Company's financial condition is
reflected in the pro forma financial statements below.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
Set forth below is unaudited historical and pro forma financial
information for the Company as of June 30, 1996 and December 31, 1995. The pro
forma information has been prepared assuming that the sale or dissolution of
LPPL Corp. occurred on June 30, 1996 and December 31, 1995. The pro forma
information is based on the historical financial information of the company and
should be read in conjunction with the historical financial statements and notes
of the Company included in this report. In the opinion of management, all
material adjustments necessary to reflect the effects of the transactions have
been made.
The pro forma information is unaudited and is not necessarily
indicative of the results which actually would have occurred if the transaction
had been consummated in the period presented, or on any particular date in the
future, nor does it purport to represent the financial position for future
periods.
8
LITTLE PRINCE PRODUCTIONS LIMITED
PROFORMA CONDENSED BALANCE SHEET AT JUNE 30, 1996
Condensed
Historical Proforma Proforma
Balance Sheet Adjustments Balance Sheet
------------- ----------- -------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,635 $ (2,635)(1) $
Prepaid expenses and taxes 612 (612)(1)
Loan to officer of Company 6,629 (6,629)(1)
Amounts due from former subsidiary -- 9,879 (2) 9,879
---------- ----------- ------------
Total current assets 9,876 3 9,879
OTHER ASSETS
Production and distribution rights 3,750 (3,750)(1) --
Investment in joint ventures 3,728 (3,728)(1) --
---------- ----------- ------------
Total other assets 7,478 (7,478) ----
TOTAL ASSETS 17,354 (7,475)(1) 9,879
========== =========== ============
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Trade creditors 159,145 (159,145)(1) --
Accrued expenses 28,825 -- 28,825
Short-Term Loan from major shareholder 120,085 -- 120,085
---------- ----------- ------------
TOTAL LIABILITIES 308,055 (159,145) 148,910(3)
========== =========== ============
SHAREHOLDERS' EQUITY
Common stock $0.01 par value
Authorized - 25,000,000 shares
Issued and outstanding - 24,999,236 shares 249,992 -- 249,992
Additional paid-in-capital 3,006,891 -- 3,006,891
Accumulated deficit (3,547,584) 151,670(1) (3,299,234)
---------- ----------- ------------
Total Shareholders' equity (290,701) 151,670 (139,031)
---------- ----------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS' 17,354 (7,475) 9,879
EQUITY ========== =========== ============
- ----------------
Adjustments to Unaudited Pro Forma Balance Sheet
(1) The adjustments reflect those assets and liabilities attributable to LPPL
Corp. that will no longer be included in the Company's consolidated balance
sheet after LPPL Corp.'s dissolution or sale.
(2) This adjustment reflects indebtedness due from LPPL Corp. to the Company and
assumes such amount will be repaid in full.
(3) As discussed under "MANAGEMENT'S DISCUSSION AND ANALYSIS-Future Liquidity
and Capital Resources" the Company is dependent, in the short term, on continued
loans from the Patchouli Foundation to pay its current liabilities and, in the
long term, on the acquisition suitable business that will enable the Company to
become profitable.
9
LITTLE PRINCE PRODUCTIONS LIMITED
PROFORMA CONDENSED STATEMENT OF OPERATIONS
Year ended December 31, 1995 Six Months ended June 30, 1996
----------------------------------------------- -------------------------------------------
Condensed Condensed
Historical Proforma Historical Proforma
Statement of Proforma Statement of Statement of Proforma Statement of
Operations Adjustments Operations Operations Adjustments Operations
---------- ----------- ---------- ---------- ----------- ----------
Net Sales $ 20,779 $ (20,779) $ -- $ 6,241 $(6,241) --
Operating costs (125,726) 51,725(1) (74,001)(2) (29,531) 5,802(1) (23,729)(2)
---------- ----------- ---------- ---------- ------- ----------
Loss from continuing operations (104,947) (30,946) (74,001) (23,290) (439) (23,729)
Interest Income -- -- -- -- -- --
-- -- -- -- -- --
Loss from continuing operations before (104,947) (30,946) (74,001) (23,290) (439) (23,729)
provision for income taxes
Provision for income taxes -- -- -- -- -- --
---------- ----------- ---------- ---------- ------- ----------
NET LOSS (104,947) (30,946) (74,001) (23,290) (439) (23,729)
---------- ----------- ---------- ---------- ------- ----------
Loss per share (cents) (0.42) (0.29) (0.09) (0.09)
----- ---------- ---------- ----------
Average number of shares outstanding 24,999,236 24,999,236 24,999,236 24,999,236
========== ========== ========== ==========
- ----------------
Adjustments to Unaudited Pro Forma Condensed Statement of Operations
(1) The pro forma adjustment to the "Operating Costs" represents those costs
attributable to the operations of LPPL Corp., which costs the Company is not
expected to incur after the sale or dissolution of LPPL Corp.
(2) The pro forma "Operating Costs" after adjustment constitute those operating
costs attributable to the Company and not LPPL Corp. that are expected to
continue after the sale or dissolution of LPPL Corp. These costs generally
comprise legal and auditing fees incurred by the Company.
10
Exhibits and Reports on Form 8-K
a. Exhibits: Exhibit No. 2.3 Stock Purchase Agreement
b. Reports on Form 8-K:
None
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SIGNATURES
Pursuant to the requirements 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.
LITTLE PRINCE PRODUCTIONS LTD.
By /s/ P.N. Chapman
------------------------------------------------------
P. N. Chapman, Chief Financial Officer,
duly authorized to sign this report on its
behalf
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