SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
November 20, 1996
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Date of Report (Date of earliest event reported)
THE L.L. KNICKERBOCKER CO., INC.
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(Exact Name of Registrant as Specified in Charter)
California 0-25488 33-0230641
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation ) Identification Number)
30055 Comercio, Rancho Santa Margarita, California 92688
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (714) 858-3661
N/A
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
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On November 20, 1996, the registrant acquired approximately 80% of the issued
and outstanding capital stock of Georgetown Collection, Inc., a developer and
marketer of proprietary, highly differentiated products distributed via direct
response. The Company currently consists of two businesses, Georgetown
Collection and Magic Attic Club, both specializing in high quality dolls.
Georgetown Collection specializes in selling porcelain collectible dolls to
adult women. The Magic Attic Club is a rapidly growing direct marketer of vinyl
play dolls, books and accessories for girls. The capital stock of Georgetown
Collection, Inc. ("Georgetown") was acquired pursuant to an Agreement of
Purchase and Sale dated November 20, 1996 by and among the sellers, New
Enterprise Associates, IV, L.P., Consumer Ventures Partners I, L.P., Vermont
Capital Venture Fund, North Atlantic Venture Fund, and Merchant Partners and the
registrant, as buyer. Pursuant to the Agreement of Purchase and Sale, the
registrant acquired from the above named stockholders 100% of the outstanding
preferred stock of Georgetown, which represents approximately 80% of the total
outstanding capital stock. Additionally, the registrant acquired 9.90% of the
outstanding common stock of Georgetown from Consumer Venture Partners I, L.P..
Following the acquisition, the registrant intends to carry on Georgetown's
business under that name.
The consideration for the acquisition consisted of (a) $1,675,000 payable in
restricted common stock of the registrant to the holders of the preferred stock
of Georgetown (b) A contingent payment in an amount equal to 15% of Georgetown's
earnings before taxes during the calendar year ended December 31, 1997 and 4.5%
during the calendar years ended December 31, 1998-2001 to the preferred
stockholders of Georgetown, and (c) $4,011.18 payable in common stock of the
registrant to Consumer Venture Partners I, L.P. for 9.90% of the common stock.
In an settlement agreement with certain secured creditors of Georgetown, the
registrant, as part of the acquisition process, paid down $1,500,000 on certain
secured debt of Georgetown. Further to the settlement agreement, the registrant
has agreed to refinance the remaining secured debt within ninety days from the
date of the Agreement of Purchase and Sale. Additionally, the registrant
provided a short-term loan to Georgetown in the amount of $2,000,000 to cover
immediate product and catalog mailing costs.
The assets acquired include the operating leases for two office/warehouse
facilities in Portland, Maine, the furniture, fixtures, equipment, and leasehold
improvements located in the offices/warehouses, proprietary software, various
trademarks and contracts. All such assets were used by Georgetown in the
operation of the doll businesses and the registrant intends to continue the use
of such assets in the operation of the doll direct response business.
The transaction will be accounted for as a purchase.
Neither registrant nor any affiliate thereof had any preexisting relationship
with the sellers.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(a) Financial Statements of Business Acquired:
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It is impracticable to provide the required financial statements for
Georgetown Collection, Inc. ("Georgetown") in this Form 8-K at this time. The
required financial statements for Georgetown will be filed as an amendment to
this Form 8-K as soon as practicable but not later than February 3, 1997, which
date is 60 days after the date that this Form 8-K must be filed.
(b) Pro Forma Financial Information:
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It is impracticable to provide the required pro forma financial
information for Georgetown in this Form 8-K at this time. The required pro
forma financial information for Georgetown will be filed as an amendment to this
Form 8-K as soon as practicable but not later than February 3, 1997, which date
is 60 days after the date that this Form 8-K must be filed.
(c) Exhibits:
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Included as part of this Form 8-K are the exhibits listed on the Exhibit
Index appearing on page 5.
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.
Date: December 5, 1996
THE L.L. KNICKERBOCKER CO., INC.,
a California corporation
By: /s/Anthony P. Shutts
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Anthony P. Shutts
Chief Financial Officer
EXHIBIT INDEX
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Exhibit No. Item
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2.1 Agreement of Purchase and Sale dated as of
November 20, 1996 by and among the Registrant,
Merchant Partners, Limited Partnership, New
Enterprise Associates IV, Limited Partnership,
Consumer Venture Partners I, L.P., North
Atlantic Venture Fund, L.P. and The Vermont
Venture Capital Fund, L.P.
PURCHASE OF CAPITAL STOCK
OF
GEORGETOWN COLLECTION, INC.,
a Delaware Corporation
BY
THE L. L. KNICKERBOCKER CO., INC.
a California corporation
TAB DESCRIPTION
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1 Agreement of Purchase and Sale
2 Exhibit A: Schedule of Stock Ownership and Purchase Price Allocation
Exhibit A-1: Schedule of Ownership of GCI Warrants
3 Exhibit B-1: Form of Restrictive Legend
Exhibit B-2: Form of Warrant
4 Exhibit C: Schedule of Contingent Payment
5 Exhibit D: Financial Statements as of September 28, 1996
6 Exhibit E: Buyer's Form 10-KSB
7 Exhibit F: List of Secured Lenders
8 Exhibit G-1: Form of Settlement Agreement
Exhibit G-2: Form of Stock Pledge
9 Exhibit H: Registration Agreement
10 Exhibit I: Form of Opinion of Buyer's Counsel