Thought you all might like to see this, its off Araldica's "new" web site:
TO: All Shareholders
FROM: Frank J. Landi, Sr., President
DATE: 4 December 1998
SUBJECT: Company Status Report
1 . All previously announced acquisitions are now in jeopardy, due to (i) the multiple funding defaults recently experienced by the company, and (ii) the artificial collapse of the trading price of its public
shares; all pending [major] financings are also now in doubt; some or all operating subsidiaries may have to be sold, and/or their respective acquisition agreements may have to be rescinded or renegotiated with the principals.
2. The company's President is currently in the process of mortgaging certain personal real estate, and will use a major portion of the funds derived therefrom to support the company with new loans. It is
anticipated that these new loans from the President will be sufficient to support the company until (see below) its new operational cash flow becomes available.
3. The company has accepted a joint venture proposal made to it by a major American direct marketing organization, whereby the new joint venture partner will fund and service part or all of continuing new, national direct mail promotions (the company's "Knights of Italy" and "Wines of your ancestors" series), enabling Araldica to sell its custom-labeled premium Italian wines to its targeted Italian-American consumer base, which approximates 23,000,000 persons. Each national mailing (to be monthly, initially, and weekly after the initial 3 month period) is projected to generate gross sales of $260,000.
4. The company plans to withdraw from Bankruptcy Court protection on or before 4 January 1999, if certain of its current [minor] funding activities come to fruition as planned, and if allowed to do so
by the Court, and if such petition to withdraw is uncontested by the company's creditors.
5. If the company is forced to remain in Chapter 11 proceedings, the company will seek the support of the Court and the USBC Trustee in its attempts to recover (i) over $1,000,000 in cash payments made for services not performed or pursuant to contracts defaulted upon by the parties (including certain acquisitions), and (ii) over 50% (10,000,000) of its shares issued, for the reasons specified above, and (iii) over $250,000 of other assets, also for the reasons specified above.
6. Given the company's recent negative news (including funding defaults, broken acquisition transactions, the collapse of its stock, and its voluntary Chapter 11 filing), it is reasonable to assume
that none of its contemplated [major] financings will be executed in the foresee-able future, and the company is proceeding with its new joint venture partner under such assumption. The new cash flow
to be generated from the joint venture efforts will enable the company to survive indefinitely, while it endeavors to stabilize as many of its existing operations as may be possible, utilizing these new funds.
7. On the positive side, the company will be forcefully returned to its original business plan: The marketing of custom-labeled, premium Italian wines to its targeted Italian-American consumer base, which is an area of unrivaled potential profitability.
8 . On the negative side, the company may be forced to abandon many of its past activities, incurring in the process (potentially) significant losses. Further, by joint-venturing all or much of its ongoing operation, the company's profit potential will be reduced substantially for the foreseeable future, because of the new profit-sharing arrangements with its joint venture partner.
Finally, the company will be unable to accurately characterize its restructured status for some months to come, until (i) all of the acquisitions (and any attendant litigation) have been finalized, one way or another; and (ii) all of the pending financings (major and minor) have been finalized, one way or another; and (iii) the chapter 11 reorganization matter has been completed, one way or another; and
(iv) the joint venture agreement has been put into operation, and the company's operations have again stabilized, at whatever levels of sales and profitability prove attainable.
The company does not anticipate being able to provide new financial statements of any kind before the end of the first quarter of 1999, if for no other reason than most questions that remain at this time
can only be answered by the company's lawyers and accountants. These questions are, primarily, (i) what do we legally own; (ii) what do we legally owe; and (iii) what is legally owed to us; these are all
contract interpretation matters.
The company's management can and will make no new representations pertaining to the company's structure until such time as written responses are in hand from its professional advisors, confirming (a)
the status of all previously executed contracts, and (b) the status of any and all new and superseding contracts that may be executed in the future between the company and various affiliated third parties.
The company will continue to utilize its web site (www.araldica.com), at a minimum, to announce all new developments of any significance to its shareholders. |
