ITEM 1. BUSINESS
History
Registrant was incorporated in Delaware on September 18, 1980 under the name Fidelity Medical Services, Inc. On July 28, 1983 Registrant changed its name to Fidelity Medical, Inc. From its inception through March 1995 Registrant was engaged in the development, design, assembly, marketing and sale of medical imaging products through its wholly-owned subsidiary, Fidelity Medical, Inc., a New Jersey corporation ("FMI"). On March 2, 1995 Registrant acquired Corniche Distribution Ltd. ("CDL"), a United Kingdom ("UK") corporation established in 1992. At such time, CDL was a holding company for two operating subsidiaries, Chessbourne International Ltd. ("Chessbourne"), a distributor/supplier of stationery products and office furniture, and The Stationery Company Limited ("TSCL"), a stationery retailer. The acquisition of CDL resulted in the former shareholders of CDL, Brian J. Baylis and Susan A.M. Crisp, owning a majority of the outstanding common shares of Registrant after the acquisition and was treated as a recapitalization of CDL with CDL being treated as the acquirer. Accordingly, Registrant changed its fiscal year to the last Saturday in March of each year in order to conform to the fiscal years of its UK operating subsidiaries and, unless otherwise indicated, the financial information and data thereafter contained in Registrant's financial reports related to the operations of CDL alone for periods prior to March 2, 1995. At the time of the CDL acquisition, CDL owned 51% of the common stock of Chessbourne, the other 49% being owned by an unrelated entity, Ronatree Limited ("Ronatree"), a property investment company. In connection with the CDL acquisition, Registrant acquired the 49% interest of Ronatree in Chessbourne by issuing to Ronatree 25,000 shares of its common stock. At such time and in furtherance of the CDL acquisition, Registrant also issued 215,150 shares of its common stock to Chester Holdings, Ltd ("Chester"), a Colorado corporation, in order to induce Chester to agree to terminate a pre-existing agreement giving Chester the right to acquire CDL and to further induce Chester to forgive approximately $71,000 of net indebtedness owing to Chester by CDL and its subsidiaries.
Effective March 25, 1995, Registrant sold its wholly-owned medical imaging products subsidiary, FMI, to Chester in exchange for the 215,150 shares of Registrant's common stock previously issued to Chester in connection with Registrant's acquisition of CDL and Chester's Promissory Note and Option Agreement dated as of March 25, 1995 (the "Note and Option Agreement"). The Note and Option Agreement contained an 8% promissory note from Chester to Registrant in the principal amount of $200,000 due October 1, 1995 (the "Note"). It also included an option, in favor of Registrant, to apply the unpaid principal balance and accrued interest due on the Note to the purchase of shares of FMI, Chester or any other parent company to which Chester may have transferred the FMI stock, at the fair market value of such shares. Registrant's medical imaging products business had been generating significant losses for a number of years resulting in the decision to dispose of the medical imaging products business and to focus Registrant's business operations on the development and expansion of its stationery operations. The Note was not paid by Chester on its due date. However, during the period May 1996 through July 1996 Chester paid Registrant $125,000 of the principal sum due Registrant under the Note. All accrued interest due under the Note and the remaining principal balance of $75,000 has not been paid as of the date hereof. Registrant expects to exercise the option applicable to the unpaid balance on the Note to purchase voting shares of Medical Laser Technologies, Inc., the corporate parent of FMI, although no assurance can be given that this will prove to be the case.
Following the sale of FMI, Registrant's business operations consisted of the retail stationery operations and brand marketing and stationery wholesale operations of TSCL and Chessbourne respectively. These operations were funded in large part from loans made by the Bank of Scotland, Registrant's primary lender, to each of CDL, TSCL and Chessbourne over a period of several years. In accordance with customary UK practice, the Bank of Scotland, when making such loans obtained security for these loans by means of mortgages over fixed assets ("Fixed Assets") and debentures over pools of assets which by their nature will
change from time to time ("Floating Changes"). Such security interests in the assets of each of CDL, TSCL and Chessbourne were reflected in documents known as Fixed and Floating Charges. The Bank of Scotland executed Fixed and Floating Charges with CDL, TSCL and Chessbourne on April 7, 1995, November 16, 1993 and March 27, 1987, respectively. The Fixed and Floating Charges contained powers for the Bank of Scotland to appoint an administrative receiver for the assets covered by the security interests. Registrant experienced large operating losses and net cash outflows from operating activities during fiscal 1996 resulting in severe liquidity problems. Registrant was unable to secure badly needed interim financing either in the form of additional loans or the conversion of bank debt to equity. Consequently, the Bank of Scotland had Chessbourne and TSCL placed into receivership in the UK on February 7, 1996 and had CDL placed into receivership in the UK on February 28, 1996. Since such time, Registrant has been inactive.
General
During the period March 26, 1995 through February 7, 1996 Registrant was engaged in the retail sale and wholesale distribution of stationery and related office products, including office furniture, in the UK through Chessbourne and TSCL. Chessbourne's operations consisted of the distribution and sale at wholesale of a wide variety of branded stationery products in England and Scotland, including products distributed under Chessbourne's proprietary "Style" brand. TSCL's business consisted of the operation of retail stationery stores in England. Prior to March 25, 1995, Registrant was engaged in the development, design, assembly, marketing and sale of medical imaging products through its wholly-owned subsidiary, FMI. As of March 25, 1995, Registrant discontinued those operations and sold that business to Chester. Such sale was intended to enable Registrant to terminate the significant cash outflows and operating losses being realized from the operation of the medical imaging products business and to permit it to focus its efforts and resources on its newly-acquired U.K. stationery business.
On March 31, 1995 TSCL acquired seven fully operational retail stationery stores. The consideration paid totaled approximately $772,000 and was paid substantially by way of the assumption of liabilities. The assets acquired were independently valued at approximately $374,000 and in addition to assumption of liabilities in the amount of approximately $1,121,000, TSCL also paid $25,000 in cash. The liabilities assumed comprised a bank loan ($320,000), trade payables ($383,000) and amounts due to Chessbourne and TSCL of approximately $418,000. The bank loan carried an interest rate of 2% over the lending bank's primary rate and was collateralized by the assets of TSCL.
In June 1995, CDL acquired a freehold interest in a Leek, Staffordshire warehouse and office facilities for a cash consideration of approximately $240,000. The consideration was partly funded by a $152,000 fifteen year business loan from Lloyds Bank Plc, banker and secured lender to CDL. The loan was secured by a mortgage on the property which became due following the institution of receivership proceedings. The loan carried a variable interest rate which was .85% per month at the time the loan was made. Principal and interest due on the loan were repayable in equal monthly installments over the term of the loan. The Leek facilities had been occupied by TSCL under lease from a non-affiliated landlord since July 1994. These facilities were used for the storage and distribution of inventory for TSCL and also housed the marketing, buying and administrative functions of Chessbourne and TSCL.
Operations of Chessbourne
CDL's wholesale stationery operations commenced in October 1993 with its acquisition of Chessbourne. At the time of such acquisition, Chessbourne's business was being operated as a traditional wholesale distribution operation with Chessbourne purchasing and distributing stationery products, office supplies and office furniture manufactured by third parties. Shortly thereafter, Chessbourne's wholesale operations were expanded to include both traditional wholesale distribution activities as well as the
development of a line of stationery products to be marketed and sold under Chessbourne's proprietary "Style" brand.
The customers of Chessbourne's wholesale operations were primarily small, independently-owned stationery and office supply stores, other stationery wholesalers and distributors, several small chain stationery stores and specialist and non-specialist retailers and retail groups. During the 40 week period ended December 30, 1995, approximately 15% of Chessbourne's sales were made to TSCL's retail stores.
Until April 1995, Chessbourne maintained a large warehouse and filled and shipped orders for stationery and office supply products using its own personnel. In April 1995, however, Chessbourne closed its stationery and office supplies warehouse and entered into an agreement with a third-party warehouse operator to provide warehouse space and order filling and shipping services for its products on a fee-for-service basis. Chessbourne's outsourcing of its warehousing operations was intended both to reduce its costs of operations and to permit Chessbourne to devote a greater portion of its resources to the development and marketing of its "Style" brand products.
Notwithstanding the closure of its stationery and office supplies warehouse, Chessbourne continued to maintain a warehouse and showroom from which it filled and shipped orders for office furniture using its own personnel. Chessbourne sold its office furniture products to retail sellers of office supplies and office furniture, to designers of office interiors, and to commercial end users. Chessbourne's wholesale stationery business generally shipped goods to fill small orders within five days of receiving orders therefor. Large orders from major customers were generally received well in advance of the requested date. Chessbourne's wholesale sales were primarily made on open account with payment generally being due within 35 days of shipment.
Through February 1996, when it was placed into receivership, Chessbourne devoted substantial resources to the development and marketing of its line of stationery products and office supplies being marketed and sold under Chessbourne's proprietary "Style" brand. The "Style" brand line of products was intended to be value-oriented while still maintaining a high level of quality. As of February 1996, Chessbourne was using the "Style" brand name on a wide variety of stationery and office supplies and was marketing approximately 500 items under the "Style" brand. Sales of Chessbourne's "Style" brand products accounted for approximately 90% of the Registrant's wholesale sales for the 40 week period ended December 30, 1995 (85% for the comparable period during fiscal 1995). Further development of the "Style" brand was adversely impacted by the Registrant's operating losses and working capital limitations which ultimately resulted in a shortage of key inventory lines.
Chessbourne did not manufacture any of its "Style" brand products. Instead, Chessbourne designed such products and contracted with various third party manufacturers to manufacture and/or print those products to Chessbourne's specifications. Chessbourne utilized short-term contracts and limited or single production run purchase orders and was not a party to any long-term manufacturing contracts. Chessbourne's customer base for its "Style" brand products included a number of specialist and non-specialist retailers, including TSCL, and distributors and other wholesalers.
Chessbourne maintained an in-house marketing department to promote its wholesale business and products. Customer awareness of Chessbourne's wholesale operations and its products was achieved through promotional literature, incentives, catalogs, trade shows and in the case of furniture products, brochures. A team of in-house account managers was utilized to increase sales to existing customers and expand the customer base through telemarketing and sales calls. Advertising consisted of brand promotions, seasonal support and direct offers to customers. During the 40 week period ended December 30, 1995, Chessbourne employed approximately 9 people full-time in its wholesale marketing department.
Operations of TSCL
In addition to Chessbourne's wholesale operations, Registrant, through TSCL, operated a chain of retail stationery stores in the UK which sold social and commercial stationery products, gift items, greeting cards and writing instruments to individuals and large and small businesses. TSCL's stores were primarily designed and operated as traditional stationery and office supplies retail stores. Throughout TSCL's existence as a subsidiary of Registrant, Registrant was constantly seeking to expand the operations of TSCL through the acquisition of similar retail chains and the opening of additional stores in target market areas of the UK. These expansion plans were adversely impacted, however, by Registrant's operating losses and working capital deficiency which ultimately lead to TSCL being placed into receivership on February 7, 1996.
TSCL's retail stores offered a wide range of social and commercial stationery products. These retail stores sold approximately 2,500 products, including a selection of Chessbourne's "Style" brand products, with approximately 14,000 other products being available within 24 hours by special order. In addition, many of the stores provided business services including printing, binding, photocopying and facsimile transmission and receipt, while others sold a limited range of office furniture. Approximately 80% of the merchandise sold in each store consisted of products sold by all of the retail stores. The balance of approximately 20% of the merchandise offered and sold was specifically tailored to perceived needs of the customers of each individual store.
Through February 1996, TSCL was attempting to implement a policy to divide its retail stores into two different but related store concepts, each operating under a different trade name. Certain of TSCL's stores were being converted to operate under the trade name "Memo". Each of these stores was operated as conventionally-merchandised stationery store of approximately 1,500 square feet. Each Memo store contained conventional stationery products and standard retail fixturing and relied on conventional merchandising techniques, stylish displays and appropriate point of sale material. These stores were located primarily in more affluent areas within TSCL's geographic retail market.
The balance of TSCL's stores were being converted to operate as price and value oriented stationery stores under the name "Memo Express". Initially, these stores were approximately the same size as the Memo stores, although TSCL believed that the Memo Express concept and style was adaptable to larger, warehouse-style stores. Memo Express stores featured metal racking in TSCL's corporate colors and "cut case" presentations of products with the intention of highlighting pricing and enhancing the appearance of value. Memo Express stores were intended to be primarily located in areas of significant commercial activity and more working class neighborhoods and marketed to businesses and other cost-conscious buyers. Both retail concepts featured products marketed and sold under the proprietary "Memo" and "Style" brands.
In addition to promoting uniformity of store design, TSCL was also in the process of developing a value priced line of stationery products to be marketed under its proprietary "Memo" brand. Like Chessbourne's "Style" brand of products, TSCL's "Memo" brand of products was intended to include a broad array of stationery and office supply products. Also, like the "Style" products, TSCL intended to attempt to promote brand loyalty through the use of uniform product packaging. Unlike Chessbourne's "Style" brand products, however, the "Memo" brand products were exclusive to TSCL's retail stores and were planned to be fundamental to generating customer loyalty to those stores. At the time of the February 1996 receivership, TSCL's "Memo" brand product line was still under development and only a limited number of such products had become available in its stores.
TSCL's retail operations attempted to increase sales by the use of seasonal promotions, in-store promotions, such as sale pricing, and advertising. All of TSCL's promotional activities were conducted by TSCL's management with input from store managers. TSCL also entered into arrangements with manufacturers for special promotions, such as the sale of advertising space on TSCL's retail stores' shopping bags and by special introductory promotions.
Annual Meeting of Shareholders
On September 28, 1995 Registrant conducted its Annual Meeting of Stockholders. At such meeting (i) Brian J. Baylis, Susan A.M. Crisp, James Fyfe, George Lombardi and Mathew P. Pazaryna were elected as directors of Registrant; (ii) Registrant received approval to change its name from Fidelity Medical, Inc. to Corniche Group Incorporated; (iii) Registrant received approval for a ten for one reverse split of its outstanding common stock to be effective October 1, 1995 and an increase in the par value of each share of common stock from $.01 to $.10; and (iv) Registrant received approval to increase the number of shares of its authorized preferred stock from 1,000,000 shares to 5,000,000 shares. To effectuate the name change, change in par value of common stock, and increase in number of authorized shares of preferred stock, Registrant amended its Certificate of Incorporation on September 28, 1995.
Receivership Proceedings
As the result of Registrant's inability to overcome its liquidity problems and reverse the trend of recurring and significant operating losses, the Bank of Scotland, Registrant's primary banker and secured lender in the UK, appointed receivers to Chessbourne and TSCL on February 7, 1996 and to CDL on February 28, 1996. (See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations). The receiverships resulted in the discontinuation of all of Registrant's business operations.
Under UK law, Registrant is not liable for the liabilities of CDL, TSCL and Chessbourne absent a guarantee or other enforceable promise by Registrant to pay such liabilities. (See "Opinion Letter of Smithsons Solicitors" included herewith and filed with the Securities and Exchange Commission as Exhibit 99(a).) Registrant has given no such guarantee or promise and as such has no liability for the payment thereof. Similarly, the appointment of an administrative receiver in respect of the assets of CDL, TSCL and Chessbourne has no effect on the assets of Registrant. Notwithstanding the foregoing, the receivers for CDL made certain claims against Registrant for sums allegedly owed to CDL by Registrant in connection with a contested share issue. To resolve such dispute, a Compromise Agreement dated March 4, 1996 between Registrant, CDL and the receivers for CDL was entered into which had the effect of releasing Registrant from any and all liability to CDL upon performance by Registrant of its obligations under that agreement. In connection therewith Registrant issued a promissory note to the Bank of Scotland, the secured creditor of CDL, in the principal amount of 50,000 pounds sterling (£50,000). On January 30, 1997, Registrant paid off the Note in full, including all interest accrued thereon through the date of payment and executed a Mutual Release with the Bank of Scotland (See Item 1. Business - Subsequent Events).
In connection with the receiverships, Brian J. Baylis and Susan A.M. Crisp, Registrant's then chief executive officer and chief financial officer, who collectively owned approximately 45% of Registrant's outstanding common stock entered into pledge agreements (the "Pledge Agreements") whereby they pledged their common shares of Registrant to the Bank of Scotland as collateral against the shortfall which was to be realized by the Bank of Scotland in the receivership proceedings. Pursuant to Pledge Agreements dated February 19, 1996 and February 21, 1996 Brian J. Baylis and Susan A.M. Crisp pledged 877,800 shares and 219,450 shares, respectively, of Registrant's common stock to the Bank of Scotland. The shares were pledged to collateralize the February 19, 1996 personal guarantees of Brian J. Baylis and Susan A.M. Crisp to the Bank of Scotland with respect to certain liabilities of CDL, TSCL and Chessbourne to the Bank of Scotland.
Reverse Stock Split
On October 1, 1995, Registrant effected a one for ten reverse split of its common stock. In connection therewith Registrant increased the par value of such common stock from $.01 to $.10 per share. Registrant had 24,083,075 shares of common stock issued and outstanding prior to reverse stock split and approximately 2,408,307 shares of common stock issued and outstanding following the effectiveness of the reverse stock split. Additionally, Registrant had 3,806,128 shares of common stock reserved for issuance prior to the reverse split and approximately 380,613 shares of common stock reserved for issuance following the effectiveness of the reverse stock split. In connection with the reverse split, Registrant did not issue fractional shares choosing instead to pay shareholders otherwise entitled to a fractional share the cash value thereof. Except where specifically noted, all references in this Form 10-K to Registrant's common shares give effect, and in some cases retroactive effect, to Registrant's October 1, 1995 one for ten reverse split.
The purpose of effecting the reverse split was twofold. First and foremost, it was done in an effort to avoid having Registrant's common stock delisted from the NASDAQ Small Cap Market by reason of not maintaining a minimum share bid price of $3 per share. Despite the effectuation of the reverse split, however, Registrant's common stock was delisted from the Small Cap Market on October 11, 1995 due to Registrant's failure to maintain a minimum share bid price of $3 per share and failure to maintain a required minimum level of capital and surplus. The secondary reason for the reverse split was to significantly reduce the number of Registrant's common shares issued and outstanding and the number of common shares reserved for issuance thereby granting the Registrant the flexibility of engaging in future equity financings or acquisitions utilizing Registrant's common stock without having to amend its Certificate of Incorporation to increase the number of authorized common shares.
Increase In Authorized Number of Preferred Shares
Effective September 28, 1995, Registrant amended its certificate of Incorporation to, among other things, increase the number of shares of its authorized preferred stock, $.001 par value per shares, from 1,000,000 to 5,000,000. At the time of such amendment, Registrant had 946,069 shares of its Series A $.07 Convertible Preferred Stock issued and outstanding leaving few additional shares of preferred stock available for issuance. The increase was deemed necessary and desirable by Registrant to permit Registrant the flexibility of engaging in future equity financings or acquisitions utilizing preferred stock.
Securities Offerings
Simultaneously with Registrant's acquisition of CDL on March 2, 1995, NWCM Limited, a Hong Kong investment banker ("NWCM"), agreed, on a staggered basis, to raise up to $5,000,000 of new equity capital for Registrant on a "best efforts" basis. The offering was conducted pursuant to the requirements of Regulation S of the Securities Act of 1933, as amended, and was made solely to experienced, sophisticated investors who were "non-U.S. persons". An initial offering of up to 600,000 shares of Registrant's common stock was made at a price of $2.00 per share. Through the conclusion of the offering on September 8, 1995, 528,600 of such shares were sold at an aggregate purchase price of $1,057,200, which resulted in net proceeds to Registrant of $880,336 after the payment of a $50,000 due diligence fee, 10% sales commissions and 2% non-accountable expense allowance to NWCM. No additional equity capital was raised by NWCM on behalf of Registrant subsequent to September 8, 1995 and there are no existing plans for NWCM to undertake any further equity offerings on behalf of Registrant.
On March 13, 1995 NWCM negotiated the conversion of a promissory note of Registrant in the amount of $300,000 payable to Avalon Investments Ltd. on November 30, 1995, into 150,000 shares of the
common stock of Registrant. NWCM was paid a commission of $36,000 in respect of such conversion. The promissory note had been entered into pursuant to a bridge financing agreement in December 1994.
Other Matters
Registrant currently has no employees and pays no salaries, wages, or similar compensation. James Fyfe is Registrant's sole executive officer and director.
Subsequent Events
Transfer of Pledged Securities
Effective January 30, 1997 Registrant entered into a Stock Purchase Agreement with the Bank of Scotland and twelve unrelated persons whereby 1,042,250 of the 1,097,250 shares of Registrant's common stock pledged to the Bank of Scotland by Brian J. Baylis and Susan A.M. Crisp to secure certain debts of Registrant to the Bank of Scotland (See Item I. Business - Receivership Proceedings) were sold by the Bank of Scotland, following a default in the obligation secured by the pledge, to such twelve persons, at a price of $.12 per share or $125,070 on an aggregated basis.
Resignation of Director
In September 1996, Mathew P. Pazaryna, a director of Registrant since 1993, was deemed to have resigned his position as such. (See Item 10. Directors and Executive Officers of Registrant).
Payment on Promissory Note to Bank of Scotland
On January 30, 1997 Registrant paid the Bank of Scotland $89,374.49 in full satisfaction of all principal and interest due under Registrant's February 1996 promissory note to the Bank of Scotland in the principal amount of fifty thousand pounds sterling (£50,000). The note had been issued to settle a disputed claim with the receivers for CDL. (See Item 1. BUSINESS-Receivership Proceedings). In consideration thereof, the parties executed a Mutual Release dated as of January 30, 1997 whereby the Bank of Scotland released Registrant and James Fyfe, Registrant's sole officer and director, from all liabilities, accounts, courses of action, sums of money, reckonings, contracts, controversies, agreements, damages, judgments, executions, claims, demands, debts, obligations, promises, covenants, actions and undertakings which against Registrant or Fyfe the Bank of Scotland ever had, had at the time of the release, or could thereafter have by reason of any matter up to and through the date of the release and Registrant and Fyfe released the Bank of Scotland in similar fashion.
Consulting Agreement
On September 23, 1996 Registrant entered into a six month consulting agreement with Albermarle Investments & Consulting S.A. ("Albermarle"), a financial consulting firm. The consulting agreement, which ran from October 1, 1996 thorugh March 31, 1997, required Albermarle to provide Registrant with advisory and investment banking services which included, among other things, (i) reviewing and reorganizing Registrant's stock structure to facilitate a viable future financing strategy for Registrant; (ii) assisting Registrant to secure interim financing to settle outstanding liabilities; (iii) assisting Registrant in completing outstanding
regulatory filings; (iv) analyzing and evaluating potential public and private financing options; and (v) identifying and evaluating acquisitions.
The consulting agreement provided for Registrant to pay Albermarle a fee of $10,000 per month or an aggregate of $60,000. Due to its financial situation, Registrant has not been able to make any payments due to Albermarle pursuant to the consulting agreement.
Securities Offerings
During the fiscal year ended March 31, 1997 Registrant conducted two private securities offerings pursuant to Rule 506 of Regulation D of the Securities Act of 1933, as amended, one of which is still in progress. The purpose of each of such offerings was, in part, to provide Registrant with the ability to settle and pay off certain of its outstanding liabilities thereby making it a desirable acquisition candidate. The first of such offerings commenced in July 1996 and was completed in December 1996 upon the sale of 4 Units resulting in $100,000 in gross proceeds to Registrant. This offering, of up to $300,000 in Units, was conducted on a "best-efforts" basis through Robert M. Cohen & Co., Inc., a New York based broker dealer ("RMCC") and was offered and sold in the form of $25,000 units. Each unit consisted of one $25,000 face amount, 90 day, 8% convertible promissory note and one redeemable common stock purchase warrant to purchase 60,000 shares of Registrant's common stock at a price of $.50 per share during a period of three years from issuance. All of the notes issued in such offering were subsequently paid in full and all of the warrants issued in such offering were subsequently redeemed by the Registrant at a price of $.075 per underlying share. The second of such offerings commenced in January 1997 and is still in progress. Similar to the prior offering, it is being conducted on a "best-efforts" basis through RMCC and consists of $25,000 units, each consisting of one $25,000 face amount, 90 day, 8% convertible promissory note and one redeemable common stock purchase warrant to purchase 60,000 shares of Registrant's common stock at a price of $.50 per share during a period of three years from issuance. This offering will involve the sale of up to 19 units resulting in gross proceeds to Registrant of $475,000 if all of the Units offered are sold. As of the date, hereof 14 Units have been sold by RMCC. In connection with each of the offerings, Registrant has paid or is paying RMCC a sales commission equal to 10% of the subscription price for each Unit sold.
ITEM 2.

ITEM 2. PROPERTIES
Registrant currently utilizes approximately 200 square feet of office space, rent free, at the offices of its former subsidiary, FMI, as its corporate office. These accommodations are made available under an informal arrangement with FMI and are terminable at will by FMI.
Prior to on or about February 7, 1996, CDL was leasing approximately 1670 square feet of office space at 272 London Road, Wallington, Surrey in England. In addition, a portion of Chessbourne's telemarketing staff servicing southern England was based at these offices.
Through April 15, 1995 Chessbourne operated from 60,000 square feet of warehouse and office space in Dundee, Scotland. On April 15, 1995 the lease was canceled by agreement with the landlord. On that date, the marketing, buying and administrative offices of Chessbourne were transferred to the TSCL facilities at Leek, Staffordshire. In connection with the relocation of Chessbourne's administrative offices, Chester also entered into a lease in April 1995, in Dundee, Scotland, on a month to month basis, of approximately 1,800 square feet of office space to house certain of its telesales and its legal and secretarial staff. Throughout the period of its ownership by CDL, Chessbourne also leased 10,500 square feet of office, showroom and warehousing space in Glasgow, Scotland which was used primarily for the sale of office furniture.
Prior to on or about February 7, 1996 TSCL operated from 20,000 square feet of warehouse and office space in Leek, Staffordshire. That facility was used for the storage and distribution of inventory and housed the administrative offices of TSCL, including marketing, buying and finance functions. From April 15, 1995 through on or about February 7, 1996 this facility was also used to house the administrative and marketing offices of Chessbourne. The Leek facility had been occupied under lease from an unaffiliated landlord pending the June 1995 consummation of purchase by CDL of the freehold interest in the property.
All of TSCL's retail outlets were located in leased facilities on standard terms and with varying expiration dates. As a result of the receivership proceedings involving Registrant's U.K. operations, which were instituted in February 1996, all of the CDL, Chessbourne and TSCL properties were handed over to the receivers and subsequently handed back to the landlord or sold and the sale proceeds remitted to the secured lenders.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
Registrant and certain of its former officers and directors were involved in a shareholders' derivative action filed in Delaware Chancery Court filed on April 7, 1995. The causes of action asserted included breach of fiduciary duty, breach of duty of care and trust to the Registrant's shareholders, gross negligence and mismanagement, as well as common law conspiracy and aiding and abetting. The court granted Registrant's motion to dismiss by Opinion and Order dated May 2, 1995. Registrant's litigation counsel thereafter advised Registrant in June 1995 that the time for appeal regarding the derivative action had expired.
Registrant filed a complaint in the Superior Court of New Jersey against its former chief executive officer, Efriam Landa on May 4, 1995 alleging breach of fiduciary duty. Mr. Landa answered the complaint on October 16, 1995 and asserted counterclaims. On December 5, 1996 (the "Release Date"), Registrant and Landa entered into a Release Agreement dismissing the action and releasing one another from any claims or rights each may have had against the other based on circumstances created or arising before the Release Date.
On April 14, 1994, a former officer and director of Registrant, Rone H. Lewis, filed suit against Registrant in Superior Court, Law Division, Morris County (MRS-L-781-94), seeking damages for Registrant's alleged failure to timely permit him to sell certain shares of Registrant's restricted common stock. The complaint asserted consequential damages of approximately $100,000. In December 1994, Registrant agreed to settle this claim for $32,000. An initial settlement payment of $15,000 was made in January 1995, and Registrant issued a two year 8% promissory note to Mr. Lewis dated January 12, 1995 with respect to the $17,000 principal balance. The note provided for 24 equal payments of $768.87 each. Registrant made the first 8 monthly payments required under the note during the period February 1995 through September 1995 leaving due a balance of 16 payments in the aggregate amount of $12,301.92. Due to its financial problems, however, Registrant was thereafter unable to make any further payments to Mr. Lewis on the note. In March 1997 Registrant and Mr. Lewis entered into a settlement agreement whereby Mr. Lewis agreed to accept $5,000 in full satisfaction of all remaining sums due to him under the note including accrued interest.
No other material legal proceedings are pending to which Registrant or any of its property is subject, nor to the knowledge of Registrant are any such legal proceedings threatened.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Registrant submitted no matters to a vote of its security holders during the fourth quarter of the fiscal year ended March 31, 1996.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
From April 4, 1994 until October 11, 1995 Registrant's common stock was traded on NASDAQ's SmallCap Market under the symbol "FMSI". On October 11, 1995 Registrant's common stock was deleted from that system by reason of Registrant's failure to meet required NASDAQ Small Cap Market listing standards relating to minimum bid price per share and minimum capital and surplus. Prior thereto, Registrant's common stock had been trading on NASDAQ's National Market System. Since October 11, 1995 Registrant's common stock has been listed for trading on the OTC Bulletin Board under the symbol "CGII". The following table sets forth the range of high and low bid prices of Registrant's common stock for periods since April 4, 1994. The quotations represent prices between dealers in securities, do not include retail mark-ups, mark-downs, or commissions and do not necessarily represent actual transactions. The quarters referred to are based on Registrant's fiscal year which for fiscal year 1995 ended on the last Saturday in March (March 25, 1995) and which for fiscal years thereafter, 1996 and beyond, ended on March 31.
(1)All prices shown give effect, and in some cases retroactive effect, to Registrant's 1 for 10 reverse stock split which was effected on October 1, 1995.
*Through March 19, 1997
At March 19, 1997, there were approximately 1,851 record holders of Registrant's common stock. Holders of common stock are entitled to dividends when, as, and if declared by the Board of Directors out of funds legally available therefor. Registrant has not paid any cash dividends on its common stock and, for the foreseeable future, intends to retain earnings, if any, to finance the operations, development, and expansion of its business. Future dividend policy is subject to the discretion of Registrant's Board of Directors.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
The selected statements of operations and balance sheet data set forth below are derived from the financial statements of Registrant, which were examined by Simontacchi & Co., independent certified public accountants, for the year ended March 31, 1996 and by Mahoney Cohen & Company, PC, independent certified public accountants, for each of the three years in the period ended March 25, 1995. Mahoney Cohen & Company, PC did not audit Registrant's UK subsidiaries, the financial statements of which were audited by another auditor whose report was furnished to Mahoney Cohen & Company, PC. The information set forth below should be read in conjunction with the audited financial statements of Registrant and related notes appearing elsewhere in this Report (See Item 8. Financial Statements and Supplemental Data).
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
During the fiscal year ended March 31, 1996 Registrant financed its activities from sales revenues, increased bank loans, net proceeds from the issuance of shares of its common stock and trade credit to meet its working capital requirements and other operating needs. However, due to recurring and significant operating losses Registrant still suffered material reductions in working capital and eventually encountered great difficulty in replenishing the inventory of its key product lines. Efforts to achieve alternative sources of
financing proved unsuccessful as did efforts to convert a significant portion of Registrant's bank debt to equity. Registrant took several steps to reduce its required cash outlays including relocating its corporate facilities and reducing personnel and other operating expenses but was unable to overcome its liquidity problems. Consequently, the Bank of Scotland, Registrant's primary banker and secured lender in the UK, appointed receivers to Chessbourne and TSCL on February 7, 1996 and to CDL on February 28, 1996. The receiverships resulted in the discontinuation of all of Registrant's business operations.
At the time of the appointment of an administrative receiver to each of CDL, Chessbourne, and TSCL, each of these companies was insolvent. The liabilities of these companies to the Bank of Scotland, secured by the respective Fixed and Floating Charges, far outweighed the value of the assets in each of the three companies. The administrative receiver, in each of these instances, collected and realized upon the secured assets to repay the Bank of Scotland. Given that the liabilities exceed the assets, all of the assets of CDL, TSCL and Chessbourne were paid to the Bank of Scotland by the receiver.
The appointment of receivers in the UK effectively suspended the power of Registrant, CDL, TSCL and Chessbourne and their respective officers and directors to deal with the assets which were subject to the respective Fixed and Floating Charges. Since, in the present instance, all of the assets of CDL, TSCL and Chessbourne were subject to a Fixed and Floating Charge, the respective companies are unable to operate as the result of the receiverships and the officers and directors thereof have no control over such entities. Further, Registrant, as the direct or indirect shareholder of each of these three companies, has no further control over them during the entire period of the receivership and Registrant has been advised that it will never regain contr ol, since, upon the termination of the respective receiverships, the companies will be left with material liabilities and no assets. Given the foregoing, Registrant has been further advised that at the conclusion of the receiverships, each of CDL, Chessbourne and TSCL will be liquidated and their existence terminated. Additionally, it has become effectively impossible for each of CDL, Chessbourne and TSCL to be audited for the year ended March 31, 1996 given that the respective receivers have possession and control over the books, records and documents of each of the corporations and will not make them available to Registrant or any auditor retained on its behalf. (See "Opinion Letter of Smithsons Solicitors" included herewith and filed with the Securities and Exchange Commission as Exhibit 99(a).) Consequently, Registrant has treated each of CDL, Chessbourne and TSCL as no longer being subsidiaries of Registrant, as reflected in Registrant's financial statements for the year ended March 31, 1996.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
The financial statements of Registrant, itemized in the subtopic, "Financial Statements" under Item 14 hereof, are set forth below. The audit reports of Coopers & Lybrand dated August 3, 1995 and March 31, 1995 respectively, included with the financial statements and previously filed in connection with Registrant's Annual Report on Form 10-K for the year ended March 25, 1995 have not been re-signed by Coopers & Lybrand for reasons relating to the institution of receivership proceedings against Registrant's former operating subsidiaries. (See "Letter of James J. Fyfe regarding Unavailability of Re-Signed Audit Report from Coopers & Lybrand" included herewith and filed with the Securities and Exchange Commission as Exhibit 99(b)). The audit report of Mahoney Cohen & Company, PC dated July 25, 1995 included with the financial statements and previously filed in connection with Registrant's Annual Report on Form 10-K for the year ended March 25, 1995 has not been re-signed by Mahoney Cohen Rashba & Pokart, CPA, PC, formerly Mahoney Cohen & Company, PC, due to such reports reliance on the audit of Registrant's former operating subsidiaries performed by Coopers & Lybrand and Coopers & Lybrand's not re-signing their audit report (See "Letter of Mahoney Cohen Rashba & Pokart, CPA, PC Regarding Their Inability to Re-Sign Their July 25, 1995 Audit Report" included herewith and filed with the Securities and Exchange Commission as Exhibit 99(c)).
SIMONTACCHI & COMPANY, LLP 9 LAW DRIVE CERTIFIED PUBLIC ACCOUNTANTS FAIRFIELD, NEW JERSEY 07004 TEL (201) 575-5040 FAX (201) 575-5044
To The Stockholders and Board of Directors Corniche Group Incorporated Wayne, New Jersey
INDEPENDENT AUDITOR'S REPORT
We have audited the accompany balance sheet of Corniche Group Incorporated as of March 31, 1996 and the related statements of operations, stockholders' deficiency, and cash flows for the year then ended. These financial statements and the financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements and the financial statement schedule of Corniche Distribution Limited and Subsidiaries, a former consolidated subsidiary, as of March 31, 1996 and for the year then ended. These statements and schedules were not audited as the corporations were in receivership in the United Kingdom (see Note 3 of the Financial statements), and the records are unavailable for audit. The financial statements of Corniche Group Incorporated and Subsidiary at March 25, 1995 and for the year then ended were audited by other auditors whose report, dated July 25, 1995, was unqualified.
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 provides a reasonable basis for our opinion.
In our opinion, based on our audit the financial statements referred to above present fairly, in all material respects, the financial position of Corniche Group Incorporated as of March 31, 1996, and the results of their operations and their cash flows for the year then ended in conformity with generally accepted accounting principles.
/s/ SIMONTACCHI & COMPANY, LLP
Fairfield, New Jersey April 1, 1997
MEMBER, AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Stockholders and Board of Directors Fidelity Medical, Inc. and Subsidiary Wayne, New Jersey
We have audited the accompanying consolidated balance sheet of Fidelity Medical, Inc. and Subsidiary as of March 25, 1995, and the related consolidated statements of operations, stockholders' deficiency, and cash flows for the year then ended. These financial statements and the financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement financial statements schedule based on our audit. We did not audit the financial statements and the financial statement schedule of Corniche Distribution Limited and Subsidiaries, a consolidated subsidiary, as of March 25, 1995 and for the year then ended, which statements reflect total assets and results of operations constituting 99.8% and 81.8%, respectively, of the related consolidated totals. Those statements and schedule were audited by another auditor whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Corniche Distribution Limited and Subsidiaries for the year ended March 25, 1995 is based solely on the report of the' other auditor.
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 the other auditor provide a reasonable basis for our opinion.
In our opinion, based on our audit and the report of the other auditor, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Fidelity Medical, Inc. and Subsidiary as of March 25, 1995, and the results of their operations and their cash flows for the year then ended in conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming, that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements. the Company has suffered recurring losses from operations and its total liabilities exceed its total assets. This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described Note 2. The consolidated financial statement do not include any adjustments that might result from the outcome of this uncertainty.
New York, New York /s/ Mahoney Cohen & Company PC July 25, 1995
REPORT OF THE AUDITORS TO THE DIRECTORS OF CORNICHE DISTRIBUTION LIMITED
We have audited the attached consolidated balance sheet of Corniche Distribution Limited and subsidiaries ("the Company") as at March 25, 1995 and the related consolidated statements of operations, cashflows and changes in stockholders' equity for the period then ended, included in the Company's consolidation package which we have initialled for the purposes of identification. Our audit also included the financial statement schedule listed on item 14(a) for the periods ended March 25, 1995, March 27, 1994 and March 31, 1993.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The company's directors are responsible for the preparation of the consolidation package. It is our responsibility to express an opinion on the consolidation package based on our audit and to report our opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidation package is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidation package. An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
FUNDAMENTAL UNCERTAINTIES
In forming our opinion we have considered the adequacy of the disclosures made in the consolidation package concerning the Company's dependence on the renewal of banking facilities on or shortly after July 31, 1995 and on substantially meeting the Company's forecasts or, if not achieved, its dependence on gaining additional funding. In addition the financial statements include £2, 131,770 due from the ultimate parent company, Fidelity Medical, Inc, ("FMI") in settlement of unpaid calls on shares issued as at the end of this year. The receipt of these monies is dependent upon the outcome of a planned equity placing by FMI. The consolidation package has been prepared on a going concern basis and the validity of this depends on successful outcomes of the above matters. The consolidation package does not include any adjustments that would be required if the above matters are not successfully achieved. Details of the circumstances relating to these fundamental uncertainties are described in the consolidation package.
OPINION
Subject to any adjustments that might be, required as a result of the fundamental uncertainties described above, in our opinion the consolidation package, which has been prepared in accordance with the accounting policies stated therein and in conformity with USGAAP, contains financial information suitable for inclusion in the consolidated financial statements of FMI as of March 25, 1995 and for the period from March 28, 1994 to March 25, 1995 except that the consolidation package does not include adjustments required to reflect the reverse acquisition of FMI by the Company.
/s/ Coopers & Lybrand Chartered Accountants and Registered Auditors London
August 3, 1995
CORNICHE DISTRIBUTION LIMITED
Report of Independent Accountants
To the stockholders of Corniche Distribution Limited
We have audited the accompanying consolidated balance sheets of Corniche Distribution Limited, and Subsidiaries as of March 27, 1994 and March 31, 1993 and the related consolidated statements of operations, cash flows and changes in stockholders' equity for the years then ended. 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 audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Corniche Distribution Limited, and Subsidiaries as of March 27, 1994 and March 31, 1991, and the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Coopers & Lybrand
Plumtree Court London 3rd March 1995
CORNICHE GROUP INCORPORATED BALANCE SHEET
ASSETS
See Accompany Notes
CORNICHE GROUP INCORPORATED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY
See Accompanying Notes
CORNICHE GROUP INCORPORATED STATEMENT OF OPERATIONS
See Accompanying Notes CORNICE GROUP INCORPORATED STATEMENT OF STOCKHOLDERS' (DEFICIENCY) EQUITY
Common Stock
See Accompanying Notes
CORNICHE GROUP INCORPORATED STATEMENT OF CASH FLOWS
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 3 UK SUBSIDIARY RECEIVERSHIP PROCEEDING (Cont'd)
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 3 UK SUBSIDIARY RECEIVERSHIP PROCEEDING (Cont'd)
PROFORMA BALANCE SHEET (Cont'd)
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 3 UK SUBSIDIARY RECEIVERSHIP PROCEEDING (Cont'd)
Consolidated Statement of Operations
The "Consolidated Statement of Operations" for the forty weeks ended December 30, 1995 and for the corresponding period in 1994, before the impact of the receivership proceedings involving the UK subsidiaries, was as follows:
Although financial statements for Corniche for the period December 31, 1995 to the date of receivership are not available, had such financial statements been available the impact on the Company's balance sheet as of March 31, 1996 and on the results of operations for the year then ended would have remained unchanged as any profit earned or loss incurred by Corniche in the period would have been offset by a corresponding increase or decreased in the excess of the UK subsidiary cumulative losses over the Company's investment.
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 4 NOTES RECEIVABLE
Notes Receivable comprise a 180-day promissory note in the principal amount of $200,000 due from Chester Holdings, Ltd. ("Chester") as part consideration for the Company's former medical imaging subsidiary sold to Chester on March 25, 1995. The note was due on October 1, 1995 and includes an option to apply any unpaid balance of such note to purchase voting securities of Chester's operating subsidiary, or any new parent company of such operating subsidiary, at the fair market value of such securities. As of March 31, 1996 Chester was in default on the note and no principal or interest had been received. Subsequent to March 31, 1996, the company received payments of principal in the aggregate sum of $125,000. Accordingly, a provision of $75,000 has been made at March 31, 1996 and no interest has been accrued. The Company may exercise the option applicable to the unpaid balance of the Note to purchase voting shares of Medical Laser Technologies, Inc., the corporate parent of the operating subsidiary.
NOTE 5 PROPERTY AND EQUIPMENT
Property and Equipment consists of the following:
March 31, March 25, 1996 1995
Leasehold Property $ 0 $ 652,950 Machinery and Equipment 0 925,500 Motor Vehicles 0 287,588 Furniture and Fixtures 1,426 538,409 1,426 2,404,447 Less: Accumulated Depreciation 291 1,047,899 $ 1,135 $1,356,548
Motor Vehicles and Machinery and Equipment include assets held under capital leases as follows:
March 31, March 25, 1996 1995
Cost $ 0 $ 311,385 Less: Accumulated Depreciation 0 102,409 Net book value $ 0 $ 208,976
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 6 NOTE PAYABLE ON DEBT COMPROMISE
Notes Payable on debt compromise comprise a 180-day promissory note in the principal amount of 50,000 pounds sterling (approximately $77,630 as of March 31,1996) in favor of the Bank of Scotland, primary banker to Corniche. The note was issued to settle certain claims involving Corniche and the Company following the receivership proceeding involving the Company's UK Subsidiary. The note was paid in full, including accrued interest, on January 30, 1997 and simultaneously the Company was released from any further obligation.
NOTE 7 REVOLVING LINE OF CREDIT - BANK
TSCL and Chessbourne had separate revolving lines of credit with a bank of approximately $400,000 and $1,740,000, respectively. The facilities were reviewed annually and interest was payable at 3% over the bank's base rate (9.75 % at March 25, 1995) for TSCL and 2 % over the bank's base rate (8.75 % at March 25, 1995) for Chessbourne.
NOTE 8 LONG-TERM DEBT
Long-term Debt as of March 25, 1995 consisted of:
Chessbourne bank loan payable over 12 years from October 12, 1993 eliminated by UK receivership proceeding $3,186,400
Corniche bank loan payable in monthly installments through June 16, 2004 eliminated by UK receivership proceeding 266,071
Corniche bank loan due on October 31, 1995 eliminated by UK receivership proceeding 159,320
Capital lease obligations payable through July 1997 eliminated by UK receivership proceeding 126,951 --------- 3,738,742 Less: Current portion 415,177 $3,323,565 ===========
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 8 LONG-TERM DEBT (Cont'd)
These notes and the revolving lines of credit (see Note 7) were secured by substantially all of the assets of Corniche, which security interest was demanded in February 1996 and resulted in the receivership proceeding.
NOTE 9 ACQUISITIONS
On March 31, 1995 Corniche acquired seven retail stationery stores. The consideration paid totalled approximately $772,000 and was paid substantially by way of assumption of liabilities. The acquisition was accounted for under the purchase method of accounting.
The results of operations of those stores from the date of acquisition had been included in the Company's consolidated statement of operations to December 30, 1995 (See Note 3).
The assets acquired and liabilities assumed (in thousands) on acquisition were as follows:
Fair Value of Assets Acquired $ 374 Goodwill 772 Cash Paid (25) ------- Liabilities Assumed $1,121
NOTE 10 PENSION PLANS
Corniche operated a self-administered money purchase pension plan for directors and senior employees. Contributions to the plan were determined by the board of directors. The plan commenced on January 1, 1994. In addition, Chessbourne operated an insured defined contribution employee benefit pension plan available to all full-time employees. Contributions were set at 4% of salary by Chessbourne and 4% by the employee. Pension costs charged to operations for the year ended March 25, 1995 were $45,536 and $22,529 for the year ended March 27, 1994.
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 11 STOCKHOLDERS EQUITY
Effective October 1, 1995 the Company declared a one-for-ten reverse stock split and all numbers of shares and share values stated herein reflect such reverse split unless otherwise noted.
In connection with the settlement of the securities class action litigation (see Note 13), the Company issued 1,000,000 shares of 7% cumulative convertible preferred stock with an aggregate value of $1,000,000. The preferred stock has a liquidation value of $1 per share, is non-voting and convertible into common stock of the Company at a price of $5.20 per share. Preferred stockholders are entitled to receive a cash dividend of 7% paid semi-annually. The preferred shares are callable by the Company at any time after the first anniversary of issuance, at prices ranging from 101 % to 105 % of face value. In addition, if the closing price of the Company's common stock exceeds $13.80 per share for a period of 20 consecutive trading days, the preferred shares are callable by the Company at a price equal to 1 % of face value. In March 1995, the holders of 53,931 shares of preferred stock exercised their rights to convert and, accordingly, 10,371 shares of common stock were issued. During the year ended March 31, 1996, holders of 36,802 shares of preferred stock converted such shares into 7,077 shares of CGI's common stock.
In March 1995, the Company issued a total of 1,312,400 shares of common stock to acquire all of the issued and outstanding stock of Corniche. Brian J. Baylis was issued 877,800 shares of common stock and Susan A.M. Crisp was issued 219,450 shares of common stock in exchange for their holdings representing 100% of the issued common stock of Corniche, and the balance of 215,150 shares were issued to Chester in connection with the acquisition. In addition, the Company issued 25,000 shares of the Company's common stock to Ronatree in exchange for the remaining 49% of the common shares of Chessbourne.
Simultaneous with the Company's acquisition of Corniche on March 2, 1995, NWCM Limited ("NWCM"), a Hong Kong investment banker, agreed on a staggered basis, to raise up to $5,000,000 of new equity capital on a "best efforts" basis. This offer was limited to experienced, sophisticated investors who are "non-U.S. persons" under Regulation S of the United States Securities Act of 1933. An initial tranche of 600,000 shares was offered at a price of $2.00 per share. Pursuant to the transaction, the Company paid NWCM a fee of $50,000. In addition, NWCM was paid a sales commission of 10% and a non-accountable expense allowance equal to 2% of the total dollars raised, a total of $162,864. The offering was closed on September 8, 1995 and the Company raised a total of $957,200 gross, $794,336 net of sales commission and expense allowance in the year ended March 31, 1996 and $100,000 March 25, 1995. The Company has agreed to indemnify NWCM for certain liabilities arising from the transaction.
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 11 STOCKHOLDERS EQUITY (Cont'd)
During the year ended March 31, 1996, the Company issued 25,000 shares of common stock to Trisec Holdings, Ltd. for consulting services in connection with the "Reverse Acquisition' (see Note 2) of Corniche on March 2, 1995.
On March 13, 1995, the Company converted a promissory note in the amount of $300,000 payable on November 10, 1995, which had been entered into pursuant to a bridge finance agreement in December 1994, into 150,000 shares of the common stock of the Company. In connection with the conversion, the Company paid NWCM a fee of $36,000.
The Company has issued common stock purchase warrants from time to time to investors in private placements, certain vendors, underwriters, and directors and officers of the Company.
A total of 150,175 shares of common stock are reserved for issuance upon exercise of warrants. Warrants issued are summarized as follows:
Shares Issuable on Exercise Expiration Exercise Price Date
February 1991 48,867 $36.00 1/98 September 1993 9,375 $46.40 4/99 March 1995 91,933 $3.20 - $8.10 1/99 - 11/03
In March 1995, as a result of the sale by the Company of its medical imaging subsidiary, stock options held by certain directors, officers and employees under the Company's 1986 Stock Option Plan were converted to warrants on substantially the same terms as the previously held stock options, except these warrants are immediately vested.
Stock Option Plans
CGI has two stock option plans. The 1986 Stock Option Plan provides for the grant of options to purchase shares of the Company's common stock to employees. The 1992 Stock Option Plan provides for the grant of options to directors.
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 11 STOCKHOLDERS EQUITY (Cont'd)
Stock Option Plans (cont'd)
The 1986 Stock Option Plan allows for the grant of incentive stock options (ISO), non-qualified stock options (NQSO) and stock appreciation rights (SAR). The maximum number of shares of the Company's common stock that may be granted, as amended in April 1993, is 140,000 shares. The terms of the plan provide that options are exercisable for a period of up to ten years from the date of grant or a period of five years with respect to incentive stock options if the holder owns more that 10% of the Company's outstanding common stock. The exercise price and grantees of options are established by the Stock Option Committee. The exercise price of ISO's must be at least 100% of the fair market value of the common stock at the time of grant. For holders of more than 10% of the Company's outstanding -common stock, the exercise price must be at least I 10% of fair market value. The exercise price of NQSO's must be not less than 80% of the fair market value of the common stock at the time of grant. An option is exercisable not earlier than six months from the date of grant.
In April 1992, the Company adopted the 1992 Stock Option Plan to provide for the granting of options to directors. According to the terms of this plan, each director is granted options to purchase 1,500 shares each year. The maximum amount of the Company's common stock that may be granted under this plan is 20,000 shares. Options are exercisable at the fair market value of the common stock on the date of grant and have five year terms.
Information with respect to options under the 1986 and 1992 Stock Option Plans is summarized as follows:
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 11 STOCKHOLDERS EQUITY (Cont'd)
Stock Option Plans (cont'd)
The Company reclassified 18,000 options shown as expired in its 1994 financial statements to be outstanding as of March 25, 1995.
Outstanding options expire 90 days after termination of holder's status as employee or director. Included in the outstanding options at March 31, 1996 were 1,500 shares which expired in April 1996 and 3,000 shares which expired in June 1996.
At March 31, 1996, there were 1,500 exercisable outstanding options and 152,500 shares avoidable for grant. Exercise prices of outstanding options ranged from $3.80 to $32.50.
On May 1, 1996, 3,000 options were granted at an exercise price of $0.40625 per share.
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 12 RELATED PARTY TRANSACTIONS
B.R. Linton, a director of Chessbourne until April 28, 1995, is also a director of Ash Property Company Limited, a property investment company. During the year ended March 25, 1995, a property was leased by Corniche from Ash Property Company Limited at a rental of approximately $94,000.
B.R. Linton is also a director of Ronatree. Until March 2, 1995, Ronatree beneficially owned a 49% interest in the ordinary share capital of Chessbourne. On March 2, 1995, CGI purchased such interest from Ronatree in exchange for the issuance of 25,000 shares of CGI.
On March 2, 1995, Chester acquired 215,150 common shares of CGI. CGI issued the shares in order to induce Chester to agree to terminate a pre-existing agreement to acquire Corniche and in forgiveness by Chester of approximately $71,000 of indebtedness owed to Chester and its subsidiaries by Corniche.
Effective March 25, 1995, CGI sold its wholly-owned medical imaging products subsidiary to Chester in exchange for the 215,150 shares of the Company's common stock previously issued to Chester in connection with the Company's acquisition of Corniche and a 180-day promissory note in the principal amount of $200,000. The promissory note also includes an option to apply the unpaid balance of such note to purchase securities of Chester or such operating subsidiary, or any other parent company of such operating subsidiary at the fair market value of such securities.
During the year ended March 25, 1995, the Company charged fees of $261,211 to Chester for management services provided by its directors and employees to Chester. These fees were still owed by Chester as of March 25, 1995. The Company fully provided against this receivable.
During the year ended March 25, 1995, the Company sold inventory totalling $732,367 to a subsidiary of Chester. In addition, the Company purchased inventory from a subsidiary of Chester for $204,323.
On march 31, 1995, an agreement was completed whereby seven retail stores were acquired from a subsidiary of Chester. The consideration paid totalled $772,000 (see Note 9).
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 13 COMMITMENTS, CONTINGENCIES AND OTHER
Legal Proceedings
During fiscal 1994, the Company disclosed irregularities in its revenue recognition practices which led to the restatement of the Company's financial statements for fiscal years ended September 30, 1989, 1990, and 1991, and the first quarter of fiscal 1992. As a result, nine class action securities complaints (the "lawsuits") were filed against the Company and certain other persons which were settled in January 1994. Pursuant to the settlement, the Company paid $2,560,000 in cash in 1995 and issued $1,000,000 in 7% cumulative convertible preferred stock. The preferred- stock is convertible into common stock at a price of $5.20 per share, and will be callable for five years. The preferred stock has been included in stockholders' equity at March 31, 1996 and at March 25, 1995. Stockholders who purchased CGI's shares between January 3, 1989 and May 7, 1992 have been included within the plaintiff class for purposes of the settlement.
CGI and certain of its former officers and directors were involved in a shareholders' derivative action filed in Delaware Chancery Court. The causes of action asserted included breach of fiduciary duty, breach of duty of care and trust of the Company's shareholders, gross negligence and mismanagement, as well as common law conspiracy and aiding and abetting. The Court granted the Company's motion to dismiss by Opinion and Order dated May 2, 1995. The Company instituted its own action in State Court in New Jersey against its former chief executive officer, Efriam Landa. The complaint was filed on May 4, 1995. Mr. Landa answered on October 16, 1995 and asserted counterclaims seeking (a) reimbursement of defense costs in the derivative action and related investigations by the Securities and Exchange Commission ("SEC') and the United States Attorney for the District of New Jersey and (b) damages for breach of his employment contract. This matter was settled by exchange of mutual releases on December 5, 1996.
In the opinion of management, there are no other lawsuits or claims pending against the Company.
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 14 INCOME TAXES
Income Tax Expense (benefit) represents United Kingdom corporation tax (benefit) for the years ended March 25, 1995 and March 27, 1994. There were no significant differences between the financial statement and tax basis of assets and liabilities that were expected to give rise to taxable income in the future in view of the Company's substantial tax losses available for carryforward.
Earnings (loss) before income taxes and preferred stock dividend is attributable to the following sources:
In the United States the Tax Reform Act of 1986 enacted a complex set of rules limiting the utilization of net operating loss carryforwards to offset future taxable income following a corporate ownership change. The Company's ability to utilize its NOL carryforwards is limited following a change in ownership in excess of fifty percentage points. The Company has fully reserved the balance of tax benefits of its operating losses because the likelihood of realization of the tax benefits cannot be determined.
The Company is delinquent in the filing of Federal and State Income Tax returns for the fiscal year ended September 30, 1994, short period ended March 25, 1995 and the fiscal year ended March 31, 1996.
NOTE 15 S.E.C. FILINGS
The Company is delinquent in its filing of the following reports with the S.E.C:
* Annual Report on Form 10-K for the fiscal year ended March 31, 1996.
* Quarterly Report on Form IO-Q for the quarter ended June 30, 1996.
* Quarterly Report on Form 10-Q for the quarter ended September 30, 1996.
* Quarterly Report on Form 10-Q for the quarter ended December 31, 1996.
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 16 SUBSEQUENT EVENTS
Transfer of Pledged Securities
Effective January 30, 1997 the Company entered into a Stock Purchase Agreement with the Bank of Scotland and twelve unrelated persons whereby 1,042,250 of the 1,097,250 shares of the Company's common stock pledged to the Bank of Scotland by Brian J. Baylis and Susan A.M. Crisp to secure certain debts of Corniche Distribution Limited and subsidiaries to the Bank of Scotland were sold by the Bank of Scotland following a default in the obligation secured by the pledge to such twelve persons for an aggregate consideration of $125,070.
Mutual Release
On January 30, 1997 the Company paid the Bank of Scotland $89,374.49 in fun satisfaction of all principal and interest due under a Promissory Note dated February 1996 to the Bank of Scotland in the principal amount of fifty thousand sterling (see Note 6). In consideration thereof, the parties executed a Mutual Release dated as of January 30, 1997 whereby the Bank of Scotland released the Company and James J. Fyfe, the Company's sole officer and director, from all liabilities, accounts, courses of action, sums of money, reckonings, contracts, controversies, agreements, damages, judgements, executions, claims, demands, debts, obligations, promises, covenants, actions and undertakings which the Company or James J. Fyfe the Bank of Scotland ever had at the time of the release or could thereafter have by reason of any matter up to and through the date of the release and the Company and James J. Fyfe released the Bank of Scotland in similar fashion.
Equity Offerings
During the period July 1996 through December 1996 the Company engaged in a private offering of securities pursuant to Rule 506 of Regulation D of the Securities Act of 1933, as amended. The offering of up to $300,000 - was conducted on a "best efforts" basis through Robert M. Cohen & Co., Inc. ("RMCC"), a New York based broker-dealer and was offered and sold in the form of $25,000 units. Each unit consisted of one $25,000 face amount 90-day, 8% promissory note and one redeemable common stock purchase warrant to purchase 60,000 shares of the Company's common stock at a price of $ .50 per share during a period of three years from issuance. The offering was terminated in January 1997 upon sale of 4 units resulting in $100,000 in gross proceeds. In connection with such offering, RMCC was paid sales commissions equal to 10% of the aggregate purchase price of the units sold resulting in aggregate sales commissions of $10,000.
CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTS
NOTE 16 SUBSEQUENT EVENTS (Cont'd)
Equity Offerings (Cont'd)
During the period January 1997 through date hereof, the Company engaged in a private offering of securities pursuant to Rule 506 of Regulation D of the Securities Act of 1933, as amended. The offering consists of up to 19 units being sold at an offering price of $25,000 per unit. Each unit consists of one $25,000 face amount 90-day, 8% promissory note and one redeemable common stock purchase warrant to purchase 60,000 shares of the Company's common stock at a price of $ .50 per share during a period of three years from issuance. The offering of up to $475,000 is being conducted on a "best efforts" basis through RMCC. In connection with such ' offering, RMCC is being paid sales commissions equal to 10% of the purchase price for each unit sold or $2,500 per unit. To date RMCC has sold 14 units.
Settlement of Accounts Payable
The Company has settled its Accounts Payable with its major creditors. The settlement resulted in a reduction of selling general and administrative expenses in the amount of $175,637.
Settlement of Note Payable
The Company has settled its Note Payable for $5,000 in full satisfaction of all remaining sums due including accrued interest. The adjustment has been reflected in the Financial Statements.
CORNICHE GROUP INCORPORATED SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED MARCH 31,1996, MARCH 25,1995 AND MARCH 27,1994
(1) Includes car allowance. (2) Includes pension contributions. (3) Compensation includes amounts paid to Mr. Baylis by CDL and its subsidiaries prior to their acquisition by Registrant in March 1995. Mr. Baylis resigned as Registrant's chief executive officer on March 6, 1996.
Compensation of Directors
Directors who are not full-time members of management receive $300 per Board of Directors meeting attended, in addition to reimbursement of travel expenses. Directors are also compensated for special assignments from time to time. No special compensation was paid in fiscal 1996.
All directors receive options to purchase 1,500 shares of Registrant's common stock each May under Registrant's 1992 Stock Option Plan for Directors.
Compliance with Section 16(a) of the Exchange Act
Any person who is an officer, director, or the beneficial owner, directly or indirectly, of more than 10% of the outstanding common stock of Registrant is required under Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") to file certain reports with the Securities and Exchange Commission (the "Commission") disclosing his or her holdings or transactions in any securities of Registrant. For purposes of this discussion, all such persons required to file such reports will be referred to as "Reporting Persons". Every Reporting Person must file an initial statement of his or her beneficial ownership of Registrant's securities on the Commission's Form 3 within ten days after he or she becomes a Reporting Person. Thereafter (with certain limited exceptions), all changes in his or her beneficial ownership of Registrant's securities must be reported on the Commission's Form 4 on or before the 10th day after the end of the month in which such change occurred. Certain changes in beneficial ownership are exempt from the
Form 4 reporting requirements, but are required to be reported on a Form 5 within 45 days of the end of the fiscal year in which such changes occurred. The Registrant knows of no person who was a Reporting Person during the fiscal year ended March 31, 1996, who has failed to file any reports required to be filed during such period on Forms 3 and 4 with respect to his holdings or transactions in the Company's securities.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
As of March 19, 1997 there were no persons known to Registrant to be the beneficial owners of more than 5% of Registrant's common stock, $.10 par value.
Security Ownership of Management
The following table sets forth information concerning the beneficial ownership of Registrant's common stock, as of March 19, 1997, by (i) each person who was a director or a nominee to become a director, (ii) Registrant's executive officers, and (iii) all persons who were directors and officers of Registrant, as a group, and the percentage of Registrant's issued and outstanding stock represented by such beneficial ownership.
Name and Address Amount and Nature of of Beneficial Owner Beneficial Ownership Percent of Class
James J. Fyfe -0- (1) -0- 145 Route 46 West Wayne, NJ 07974
All directors and officers -0- (1) -0- as a group (1 person)
________________
(1) Does not include 1,500 shares of common stock which may be issued to Mr. Fyfe upon the exercise of 1,500 stock options issued to Mr. Fyfe as of May 1996 in connection with his services as a director of Registrant. These options were issued in connection with Registrant's 1992 Stock Option Plan and are not exercisable until May 1997. Each option is exercisable at an exercise price of $.40625 per share.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions With Management and Others
During the fiscal year ended March 31, 1996 and all subsequent periods there have been no material transactions between Registrant and any member of management or any principal shareholder of Registrant.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Financial Statements
The financial statements filed as a part of this report are as follows:
Report of independent accountants
Balance Sheets - March 31, 1996 and March 25, 1995
Statements of Operations - Years ended March 31, 1996, March 25, 1995 and March 27, 1994
Statement of Changes in Stockholders' (Deficiency)/Equity - Years ended March 31, 1996, March 25, 1995 and March 27, 1994
Statements of Cash Flows - Years ended March 31, 1996, March 25, 1995 and March 27, 1994
Notes to consolidated financial statements
Financial Statement Schedules
The financial statement schedule filed as a part of this report is as follows:
Valuation and Qualifying Accounts for the years ended March 31, 1996, March 25, 1995 and March 27, 1994.
Other financial statement schedules have been omitted for the reason that they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto.
Exhibits
The exhibits filed as a part of this report are as follows:
* Filed herewith - - ----------------- Notes:
(1) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the registration statement of Registrant on Form S-18, File No. 2-69627, which exhibit is incorporated herein by reference.
(2) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the registration statement of Registrant on Form S-2, File No. 2-88712, which exhibit is incorporated herein by reference.
(3) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the registration statement of Registrant on Form S-2, File No. 33-4458, which exhibit is incorporated herein by reference.
(4) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the annual report of Registrant on Form 10-K for the year ended September 30, 1987, which exhibit is incorporated herein by reference.
(5) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the registration statement of Registrant on Form S-3, File No. 33-42287, which exhibit is incorporated herein by reference.
(6) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the registration statement of Registrant on Form S-1, File No. 33-42154, which exhibit is incorporated herein by reference.
(7) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the annual report of Registrant on Form 10-K for the year ended September 30, 1994, which exhibit is incorporated herein by reference.
(8) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the annual report of Registrant on Form 10-K for the year ended September 30, 1991, which exhibit is incorporated herein by reference.
(9) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the proxy statement of Registrant dated March 30, 1992, which exhibit is incorporated herein by reference.
(10) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the current report of Registrant on Form 8-K, dated March 2, 1995, which exhibit is incorporated herein by reference.
(11) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the current report of Registrant on Form 8-K, dated April 5, 1995, which exhibit is incorporated herein by reference.
Reports on Form 8-K
No reports on Form 8-K have been filed by Registrant during the last quarter of the period covered by this report other than Registrant's Report on Form 8-K dated February 7, 1996 reporting on Item 3, Bankruptcy or Receivership, and relating to the appointment of a receiver for Registrant's operating subsidiaries, Chessbourne and TSCL.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CORNICHE GROUP INCORPORATED
By /s/ James J. Fyfe JAMES J. FYFE, Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of Registrant and in the capacities and on the dates indicated:
Signatures Title Date
Principal Executive Officer:
/s/ James J. Fyfe Vice President April 24, 1997 JAMES J. FYFE
Principal Financial and Accounting Officer:
/s/ James J. Fyfe Vice President April 24, 1997 JAMES J. FYFE
A Majority of the board of directors:
/s/ James J. Fyfe April 24, 1997 JAMES J. FYFE
EXHIBITS
-------------------
CORNICHE GROUP INCORPORATED
FORM 10-K
--------------------
Exhibit Index
The exhibits indicated below as having heretofore been filed with another document with the Securities and Exchange Commission are incorporated herein by reference.
* Filed herewith ________________
Notes:
(1) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the registration statement of Registrant on Form S-18, File No. 2-69627, which exhibit is incorporated herein by reference.
(2) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the registration statement of Registrant on Form S-2, File No. 2-88712, which exhibit is incorporated herein by reference.
(3) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the registration statement of Registrant on Form S-2, File No. 33-4458, which exhibit is incorporated herein by reference.
(4) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the annual report of Registrant on Form 10-K for the year ended September 30, 1987, which exhibit is incorporated herein by reference.
(5) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the registration statement of Registrant on Form S-3, File No. 33-42287, which exhibit is incorporated herein by reference.
(6) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the registration statement of Registrant on Form S-1, File No. 33-42154, which exhibit is incorporated herein by reference.
(7) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the annual report of Registrant on Form 10-K for the year ended September 30, 1994, which exhibit is incorporated herein by reference.
(8) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the annual report of Registrant on Form 10-K for the year ended September 30, 1991, which exhibit is incorporated herein by reference.
(9) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the proxy statement of Registrant dated March 30, 1992, which exhibit is incorporated herein by reference.
(10) Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the current report of Registrant on Form 8-K, dated March 2, 1995, which exhibit is incorporated herein by reference.
(11)Filed with the Securities and Exchange Commission as an exhibit, numbered as indicated above, to the current report of Registrant on Form 8-K, dated April 5, 1995, which exhibit is incorporated herein by reference.