This just added to the web site -
To : All Shareholders
From: Frank J. Landi, Sr., President
Date: March 10, 1999
Subject: Status Report
1) On 27 January, 1999, the company was dismissed (at its own request) from the voluntary Chapter 11 Bankruptcy Reorganization proceedings in United States Bankruptcy Court, for which it filed on 4 November, 1998.
2) On 31 January, 1999, the company signed an agreement with the country's largest direct mail services organization in the alcohol beverage business, whereby it will have a worldwide exclusive to
market the company's proprietary "Knights of Italy"custom-labeled wines. Araldica currently projects that this joint venture, which commences next month, will provide new, net annual revenues to the company approximating $1,000,000 in its initial full year of peration.
At the option of Araldica, the joint venture will either custom-label its own wines for sale, or accept for sale 100% of the wines which may be produced by the company at its own winery. Further, it has requested that the company substantially expand its marketing concept, beyond the current "Italian wines to Italian-American consumers" (a 23,000,000 person niche market in the United States alone) to include making its own proprietary "Knights of ..." wines and custom labels from all over Western Europe, for new national direct response promotions too be targeted at all of the respective ethnic groups having family in such countries, this expansion will commence in the second half of 1999.
3) In February of 1999, the company completed the financial requirements necessary (depositing good funds into its attorney's escrow account) to complete its previously announced acquisition of
the Italian winery known as Azienda Agricola Antogianni, S.r.l., in Montefoscoli, Tuscany (and its exclusive world wide sales agent, Jade Enterprises, Inc, of Pittsburgh). It expects to assume full day to day control of the winery and vineyard operation in Italy before the end of this month.
4) Concurrently, the company named Frank J. Landi, Sr., (its current President) to the newly created position of General Manager/European Operations with specific responsibility for the Antogianni operation in Italy.
5) The company currently plans to sell 100% of its Italian wine production, for the foreseeable future, exclusively through its new joint venture. The company will immediately commence a five year
expansion plan for the Antogianni winery to increase production of its premium DOCG wines, from the current 4,00 cases annually to the 100,000 annually which were produced by Antogianni a decade ago. The company is currently in negotiations with certain Italian Banks to provide a long-term $500,000 mortgage on the Antogianni property (which is valued at $1,500,000); such funds, when received, will be used as operating reserves, replacing a defaulted $500,000 private
placement in 1998.
6) In late February of 1999, the company completed its relocation to New York City; its new corporate headquarters are at 137 Fifth Avenue (11th floor) in Manhattan. The company's new telephone and facsimile numbers, expected to be operational no later than Friday, 19 March, are: Telephone 212-982-9555 Facsimile 212-982-9316
7) Since filling for Bankruptcy Court protection in November of 1998, two of the company's directors (Ms. Gellis an Mr. Landi) personally have committed new debt investments of $100,000 minium in the company, $70,000 of which has already been made available; the remaining $30,000 is being made available as needed. Such funds were required to assist the company through its transition from operating under Court protection to full and independent operation once again, and to
bridge the period until the commencement of the new joint venture revenue stream, in April of 1999, and /or the company's receipt of its $500,000 mortgage on the Italian property.
It should be noted that it has been the company's policy to allow all profits generated by its [5] subsidiaries to remain therein; the parent company does not take, for any reason, any of its subsidiaries' cash flow at any time, preferring to instead to allow any such funds to be reinvested.
8) In the last sixty days, the company has successfully renegotiated two of its prior acquisition agreements (one in Italy and one in the United States) with the sellers, who are the former principals
and current managers of these wholly-owned subsidiaries. The proposed revised terms and conditions of the respective acquisition agreements were accepted by the sellers, avoiding the threat of litigation between the parties and restoring good working relations between the company and its subsidiaries.
9) The company signed, in late 1998, a non-exclusive agreement to acquire a $6,000,000 (sales) New York speciality food manufacturer/distribution; completion of the acquisition requires (in addition to equity) a $500,000 cash payment at the closing.
Immediately after the successful completion of its mortgage of the Antogianni property, the company plans to attempt a new $1,000,000 Regulation D, Rule 504 of-shore private placement (of secured,
convertible debt) with certain New York investment bankers that have expressed an interest in such an acquisition by the company, to raise the funds required to complete this new proposal. If successful, this transaction would replace the company's prior failed acquisition of a cheese distribution company in 1998 (which is now in litigation) of approximately the same size.
10) The company plans to commence, in the Spring of 1999, a national television advertising campaign (the time for which is prepaid, with company shares, in 1997) to introduce is propriety product lines to American consumers, it will also be used to support the new joint venture's national direct response promotion of its custom-labeled wines.
11) The company has engaged new accountants and auditors (which will shortly be announced via formal press release), and anticipates- at some time in 1999- being able to publish its first audited financial statements, thereby becoming a fully reporting company. Should it be successful with the acquisition of the food manufacture/distributor with which it has reached an agreement in principal, the company will also, immediately thereafter, apply for NASDAQ small cap listing.
12. The company anticipates that sufficient new funds will be available to the company, no later then mid- 1999, to allow it to engage the services of a major web site developer to take over and
expand- primarily with full on-line ordering and payment capabilities- the company's existing “www.araldica.com” internet presence. The company anticipates that its original plans, to become a serious internet retailer of wines, olive oils and specialty Italian foods, will come to fruition before the end of 1999.
Management believes that (i) the company's completion of the take over of Antogianni winery in Italy- after 66 months of effort- and (ii) the company's new joint venture agreement (through which the company plans to sell 100% of Antogianni's wine production), will combine to insure that the company survives and prospers. The company's ability to generate interim operating capital, via the mortgaging of the Italian property for $500,000 US, is simply an additional benefit derived from the Antogianni acquisition.
The company will continue to update shareholders on a regular basis through new web site posting and format press releases as appropriate.
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