More annual reports from Caladrus Biosciences:
2020 ReportPeers and competitors of Caladrus Biosciences:
Momenta Pharmaceuticals Inc. Morningstar® Document Research℠ FORM 10-KCaladrius Biosciences, Inc. - CLBSFiled: April 29, 1997 (period: March 31, 1996)Annual report with a comprehensive overview of the companyThe information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The userassumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot belimited or excluded by applicable law. Past financial performance is no guarantee of future results. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]For the fiscal year ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]For the transition period from ________________ to ________________ Commission file number: 0-10909 CORNICHE GROUP INCORPORATED (Exact name of registrant as specified in its charter) Delaware 22-2343568 (State or other jurisdiction of (I.R.S. employer incorporation or organization) Identification No.) Wayne Interchange Plaza I 145 Route 46 West, Wayne, NJ 07974 (Address of principal executive offices) (Zip code)Registrant's telephone number, including area code: (201) 785-3338Securities registered pursuant to Section 12(b) of the Act: NoneSecurities registered pursuant to Section 12(g) of the Act: Common Stock, $.10 par value (title of class) Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] [Cover page 1 of 2] [Page 1 of 210 pages] [Exhibit Index at page 59] $904,604 as of March 19, 1997 (Aggregate market value of the voting stock held by non-affiliates of registrant) 2,412,278 shares, $.10 par value, as of March 19, 1997Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date) DOCUMENTS INCORPORATED BY REFERENCE Annual Reports on Forms 10-K of Registrant for the years ended March 25, 1995 and September 30, 1994 Proxy Statement of Registrant -- September 28, 1995 Annual Meeting of Stockholders [Cover Page 2 of 2 pages]PART IITEM 1. BUSINESSHistory 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. Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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 3change 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ($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 4development 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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. 5Operations 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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. 6Annual 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" Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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. 7Reverse 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.Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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 8common 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 EventsTransfer 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).Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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 9regulatory 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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. 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. 10 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. 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.Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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. 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. 11PART IIITEM 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. Bid Prices High Low Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Fiscal 1995(1) First Quarter $8.40 $3.10 Second Quarter 5.00 3.80 Third Quarter 4.70 2.50 Fourth Quarter 5.00 2.50 Fiscal 1996(1) First Quarter $7.19 $3.12 Second Quarter 5.00 2.66 Third Quarter 4.00 .25 Fourth Quarter .50 .1875 Fiscal 1997(1) First Quarter $ .25 $ .1875 Second Quarter .375 .1875 Third Quarter .30 .1250 Fourth Quarter* .375 .1875(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. 12ITEM 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). FISCAL YEAR ENDING -------------------------------------------- March 31, March 25, March 27, March 31, 1996 1995 1994 1993 Statement of Operations: Net Sales $ 0 $21,048,151 $7,585,360 $336,779 Cost of Sales 0 15,531,102 5,121,884 20,381 Gross Profit 0 5,517,049 2,463,476 316,398 Operating (Loss) Income (593,207) (2,821,339) 207,300 16,436 Net (Loss) Income (664,348) (3,394,652) 1,804 496 Net (Loss) Income per common share: (.29) (2.05) 0 0 Weighted average number of shares outstanding 2,296,829 1,656,903 1,669,784 1,670,232Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Dividends per common share -0- -0- -0- -0- March 31, 1996 March 25, 1995 Balance Sheet Data: Working capital (deficiency) $(661,078) $(1,863,138) Total assets 136,201 9,822,570 Current liabilities 796,144 9,122,665 (Accumulated deficit) Retained earnings (2,457,623) (3,827,879) Stockholders' equity (deficiency) (659,943) (2,879,165)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 13financing 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 control, 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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. 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)). 14SIMONTACCHI & COMPANY, LLP 9 LAW DRIVECERTIFIED PUBLIC ACCOUNTANTS FAIRFIELD, NEW JERSEY 07004 TEL (201) 575-5040 FAX (201) 575-5044To The Stockholders andBoard of DirectorsCorniche Group IncorporatedWayne, New JerseyINDEPENDENT AUDITOR'S REPORTWe 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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, LLPFairfield, New JerseyApril 1, 1997 MEMBER, AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 15INDEPENDENT AUDITOR'S REPORTTo the Stockholders and Board of DirectorsFidelity Medical, Inc. and SubsidiaryWayne, 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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 PCJuly 25, 1995 16REPORT OF THE AUDITORS TO THE DIRECTORS OF CORNICHE DISTRIBUTION LIMITEDWe 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 AUDITORSThe 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 OPINIONWe 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 UNCERTAINTIESIn 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. 17OPINIONSubject to any adjustments that might be, required as a result of the Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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 & LybrandChartered Accountants and Registered AuditorsLondonAugust 3, 1995 18CORNICHE DISTRIBUTION LIMITEDReport of Independent AccountantsTo the stockholders of Corniche Distribution LimitedWe 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 & LybrandPlumtree CourtLondon3rd March 1995 19 CORNICHE GROUP INCORPORATED BALANCE SHEETSource: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ASSETS March 31, March 25, Proforma 1996 1995 March 25, 1995 Current Assets:Cash $66 $ 108,438 $100 Accounts Receivable, net of allowances for doubtful accounts of $345,108 in 1995 0 3,393,594 0Notes Receivable 125,000 200,000 200,000Inventory 0 3,146,307 0Prepaid Expenses-and Other Receivables 10,000 411,188 18,422 Total Current Assets 135,066 7,259,527 218,522Other Assets:Property and Equipment - at cost, net 135,066 7,259,527 0Intangible Assets - at cost, net 0 1,206,495 0Investment in and Advances to UK Subsidiary -------- ---------- -------- 0 0 514,322 Total Assets $136,201 $9,822,570 $732,844 ========= ========== ======== See Accompany Notes 21 CORNICHE GROUP INCORPORATED BALANCE SHEET LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY March 31, March 25, Proforma 1996 1995 March 25, 1995 Current Liabilities:Notes Payable $ 5,000 $2,521,452 $ 16,292Note Payable on Debt Compromise 77,630 0 0Trade Accounts Payable 183,123 4,065,439 55,366Current Portion of Long-Term Debt 0 415,177 0Dividends Payable - Preferred Stock 84,749 21,954 21,954Accrued Liabilities 104,804 1,512,873 555,874Deferred Income 0 23,570 0Payroll and Sales Tax Payable 0 562,200 0 Total Current Liabilities 455,306 9,122,665 649,486Long-Term Liabilities:Long-Term Debt 0 3,323,565 0Deferred Income 0 57,159 0Deferred Credit 0 37,998 0 Total Long-Term Liabilities 0 3,418,722 0 Total Liabilities 455,306 12,541,387 $649,486Cumulative Redeemable Preference Shares and Class B Ordinary Shares 0 160,348 0Stockholders' (Deficiency) Equity:Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 7% Cumulative Convertible Preferred Stock authorized 5,000,000 shares, and issued outstanding 909,267 shares (March 31, 1996) and 946,069 (March 25, 1995) 909,267 946,069 946,069Common Stock, $0. 1 0 par value, authorized - 30,000,000 shares, issued 2,630,378 (March 31, 1996) and 2,119,857 (March 25, 1995) 263,037 211,985 211,985 Additional Paid-In Capital 830,086 0 0 (Accumulated Deficit) Retained Earnings (2,116,785) (3,827,879) (869,986) (114,395) (2,669,825) 288,068 Cumulative Translation Adjustment 0 (4,630) 0Treasury Stock - at cost, 218, 100 shares (204,710) (204,710) (204,710) Total Stockholders' (Deficiency) Equity (319,105) (2,879,165) 83,358Total Liabilities and Stockholders' (Deficiency) Equity $ 136,201 $9,822,570 $732,844 See Accompanying Notes 21 CORNICHE GROUP INCORPORATED STATEMENT OF OPERATIONS March 31, March 25, March 27, 1996 1995 1994 Net Sales $ 0 $21,048,151 $7,585,360 Cost of Sales 0 15,531,102 5,121,884Gross Profit 0 5,517,049 2,463,476 Selling, General and Administrative Expenses 257,073 8,338,388 2,256,176Operating Loss (257,073) (2,821,339) 207,300 (Loss) on Sale of Assets (3,042) (22,221) (40,017) Interest (Net) (600) (538,646) 164,070(Loss) Income before Income Tax (260,715) (3,382,206) 3,213 Income Tax Benefit (Expense) 0 9,508 (1,409)Net (Loss) Income before Pref. Dividend (260,715) (3,372,698) 1,804 Preferred Stock Dividend (62,795) (21,954) 0Net (Loss) Income from Continuing Operations (323,510) (3,394,652) 1,804 Loss from Discontinued Operations (3,432,032) 0 0 Excess of UK Subsidiary Cumulative Losses over Investment 5,466,636 0 0Net Income (Loss) $1,711,094 $(3,394,652) $1,804Profit / (Loss) per share of Common StockIncome (Loss) from Continuing Operations (0.14) (2.05) 0.00Profit (Loss) from Discontinued Operations 0.88 0.00 0.00Net Profit (Loss) per share $ 0.74 $ (2.05) 0.00Weighted Average Number of Common Shares Outstanding 2,300,289 1,656,903 1,669,784Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. See Accompanying Notes 22 CORNICE GROUP INCORPORATED STATEMENT OF STOCKHOLDERS' (DEFICIENCY) EQUITY Common Stock Additional Cumulative Preferred Number of Paid-In Accumulated Translation Treasury Stock Shares Amount Capital Deficit Adjustment Stock Total Balance - April 1, 1993 $ 0 572,981 $ 57,298 150,127 $ (23,644) 61 $(183,196) $ 646Recision of Common Stock Sale - (895) (90) 24,041) 24,131 - - -Recapitalization Adjustment - - - (9) - - - (9)Net Income - - - - 1,804 - - 1,804 Balance - March 27, 1994 0 572,086 57,208 126,077 2,291 61 (183,196) 2,441 Issuance of Preferred Stock 1,000,000 - - - - - - 1,000,000Conversion of Preferred Stock (53,931) 10,371 1,037 52,894 - - - -Preferred Stock Dividends - - - - (21,954) - - (21,954)Purchase of Treasury Stock - - - - - - (21,514) (21,514)Issuance of Common Stock - 1,337,400 133,740 99,000 - - - 232,740Conversion of Note, net - 150,000 15,000 235,000 - - - 250,000Issuance of Common Stock - 50,000 5,000 (95,000) - - - 100,000Costs Related of Sale of Common Stock- - - (50,000) - - - (50,000)Recapitalization Adjustment - - - (557,971) (435,518) - - (993,489)Net Loss - - - - (3,372,879) - - (3,372,698)Cumulative Translation Adjustment - - - - - (4,691) - (4,691) Balance - March 25, 1995 946,069 2,119,857 211,985 0 (3,827,879) (4,630) (204,710) (2,879,165) Conversion of Preferred Stock (36,802) 7,077 708 36,094 - - - -Adjustment to Common Stock - (156) (16) 16 - - - -Issuance of Common Stock - 478,600 47,860 909,340 - - - 957,200Costs Related to Sale of Common Stock - - - (162,864) - - - (162,864)Issuance of Common Stock - 25,000 2,500 47,500 - - - 50,000Preferred Stock Dividends - - - - (62,795) - - (62,795)Elimination of UK Subsidiaries - - - - 2,034,604 4,630 - 2,036,234Net Loss - - - - (260,715) - - (260,715) Balance - March 31, 1996 $909,267$2,630,378 $263,037 $830,086 $(2,116,785) $ 0 $(204,710) $(319,105) See Accompanying Notes 23 CORNICHE GROUP INCORPORATED STATEMENT OF CASH FLOWS March 31, March 25, March 27, 1996 1995 1994 Cash Flows from Operation Activities: Net Loss Income from Continuing Operations in 1996 and Net (Loss) Income in 1995 and 1994 $(260,715) $(3,372,698) $1,804Adjustments to reconcile Net Loss from Continuing Operations to Net Cash used in Operating Activities in 1996 and Net (Loss) Income to Net Cash provided by (used in) Operating Activities in 1995 and 1994: Depreciation 1,749 346,668 82,026 Amortization of Goodwill - 97,651 19,261 Amortization of Trademarks - 1,248 2,104 Amortization of Development Costs - 18,524 - Amortization of Deferred Credit - (4,223) (675) Loss on Sale of Property and Equipment 3,042 22,220 40,017 Allowance for Bad Debts - 349,231 131,692Changes in Assets and Liabilities Net of Effects from Acquisitions: Decrease (Increase) in Accounts Receivable - (217,151) 167,940 Decrease in Notes Receivable 75,000 - - Decrease in Inventory - 561,291 292,519 Decrease (Increase) in Prepaid Expenses and Other Receivables 8,422 (59,268) (72,400) Decrease in Notes Payable (11,292) - - Increase (Decrease) in Trade Accounts Payable 127,757 286,501 (359,536) Increase (Decrease) in Accrued Liabilities (451,070) 893,946 7,255 Increase (Decrease) in Deferred Credit - (23,138) 53,912 Increase in Taxes Payable - 259,217 104,891Net Cash used by Continuing Activities in 1996 and Net Cash provided by (Used In) Operating Activities in 1995 and 1994 (507,107) (839,981) 470,810 Net Cash used in Discontinued Operations (331,337) - -Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Net Cash used in Operating Activities (838,444) (839,981) 470,810Cash Flows from Investing Activities: Payments to Acquired Fixed Assets (8,926) (439,169) (499,592) Proceeds from Sale of Equipment 3,000 54,607 641,946 Payments for Acquisition of Business - - (5,267,364) Net Cash used in Investing Activities (5,926) (384,562) (5,125,010)Balance Carried Forward $(844,370) $(1,224,543) $(4,654,200) 24 CORNICHE GROUP INCORPORATED STATEMENT OF CASH FLOWS March 31, March 25, March 27, 1996 1995 1994 Balance Brought Forward $(844,370) $(1,224,543) $(4,654,200) Cash Flows from Financing Activities: Net Proceeds from Issuance of Common Stock for Cash 794,336 50,000 - Net Proceeds from Issuance of Common Stock for Services 50,000 - - Net Borrowings under Line of Credit Agreement - 1,018,536 1,397,606 Principal Payments under Capital Lease Obligations - (106,369) (32,864) Proceeds from Issuance of Long-Term Debt - - 3,151,155 Net Cash Provided by Financing 844,336 962,167 4,515,897Effect of Exchange Rate on Cash - (7,725) (515)Net Decrease in Cash (34) (270,101) (138,818)Cash at Beginning of Period 100 9,940 148,758Cash received from FMI - 368,599 -Cash at End of Period $ 66 $ 108,438 $ 9,940Supplemental Disclosures of Cash FlowInformationCash Paid during the Year for: Interest $ 600 $ 538,646 $ 167,946 Income Taxes $ - $ - $ 3,451 See Accompany Notes 25 CORNICHE GROUP INCORPORATED STATEMENT OF CASH FLOWS (CONCLUDED) Supplemental Schedule of Non-Cash Investing and Financing ActivitiesSource: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. During the year ended March 31, 1996 the Company accrued preferred stock dividends of $62,795 and (1995 - $21,954).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, holders of 53,931 shares of preferred stock converted such shares into10,371 shares of CGI's common stock (Note 11).On March 2, 1995 CGI issued 1,097,250 shares of its common stock for 100% of the issued and outstanding common stock of Corniche (Note 2). Additionally, it issued 25,000 shares to the 49 shareholder of Chessbourne (Note 11) and 215,150 shares to Chester Holdings, Ltd.On March 25, 1995, Chester Holdings, Ltd. returned the 215,150 shares to CGI in exchange for the medical imaging subsidiary of CGI (Note 11).In March 1995, holders of a promissory note in the amount of $300,000 converted such note into common stock of CGI (Note 11).During the year ended March 25, 1995, Corniche acquired a company through the assumption of debt as follows: March 27, 1995 Fair Value of Assets Acquired $2,046,000 Cash Paid 0 Liabilities Assumed and Incurred $2,046,000In connection with the reverse acquisition on March 2, 1995, cash of $368,599 was received. See Accompanying Notes 26 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 1 THE COMPANY Corniche Group Incorporated, formerly Fidelity Medical, Inc. (hereinafter referred to as the "Company" or "CGI") as result of a reverse acquisition with Corniche Distribution Limited and its Subsidiaries ("Corniche") (see "Reverse Acquisition" below), was engage in the retail sale and wholesale distribution of stationery products and related office products, including office furniture, in the United Kingdom. The operating subsidiaries of Corniche were Chessbourne International Limited ("Chessbourne") and The Stationery Company Limited ("TSCL"). Corniche experienced large operating losses and net cash outflows from operating activities in fiscal 1995 and 1996 resulting in a significant reduction in working capital during that period. The Company was unsuccessful in its efforts to raise interim financing to resolve its liquidity problems. Additionally, the Company was not able to convert a significant portion of its bank debt to equity. As a result, receivers were appointed to Corniche's subsidiaries Chessbourne and TSCL on February 7, 1996 by their primary bankers Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. and secured lender, Bank of Scotland. Corniche Distribution Limited was placed in receivership on February 28, 1996 (See Notes 2 & 3).NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reverse Acquisition On March 2, 1995, the stockholders of Corniche exchanged all of their common stock for 1,097,250 shares of CGI. Since the former stockholders' of Corniche owned a majority of the outstanding stock of CGI after the acquisition, such purchase transaction was accounted for as a reverse acquisition. The acquired company (Corniche) was deemed to have acquired the acquiring company (CGI). Accordingly, CGI changed its fiscal year to the last Saturday in March of each year in order to conform to the fiscal year of its operating subsidiary. Historical stockholders' equity of Corniche has been retroactively restated to give effect to the recapitalization. The historical financial statements prior to March 2, 1995 are those of Corniche. Further, on March 2, 1995, CGI acquired a 49 % interest in the outstanding shares of Chessbourne. 27 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) UK Receivership Proceeding Significant losses were incurred during the forty weeks to December 30, 1995, and in the fiscal year ended March 25, 1995, resulting in a working capital and a stockholders deficiency as of December 30, 1995 and March 25, 1995. Management of Corniche had taken several steps to reduce the amount of cash used by operations, including relocation of its corporate facilities and reduce staffing levels and other operating expenses. However, a receivership proceeding involving the operating subsidiaries of the Company was commenced on February 7, 1996 and the UK holding company, Corniche Distribution Limited, was placed in receivership on February 28, 1996. The receiverships resulted in the loss of all of the Company's operations and operating assets and eliminated most liabilities. Accordingly, the operating activities of the UK subsidiaries have been classified as a discontinued operation and the excess of the UK subsidiary's cumulative losses over the Company's investment is included in the income statement for the year ended March 31, 1996. In addition, the UK Subsidiaries have been removed from the balance sheet as of March 31, 1996 and the audited balance sheet as of March 25, 1995 has been restated on a proforma basis to reflect the removal of the UK subsidiaries as of that date. This significantly reduces the Company's stockholder equity deficiency. The adjustments necessary to eliminate the UK subsidiaries are set out in Note 3. Basis of Presentation The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company's ability to continue as a going concern may depend on its ability to obtain outside financing sufficient to support it pending identification and completion of a suitable acquisition or acquisitions and its ability to obtain financing and consummate such acquisition or acquisitions. There can be no assurance given that the Company will obtain such short-term or long-term outside financing or complete the acquisition of new business operations.Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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. 28 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Consolidation Policy The consolidated financial statements for the fiscal years ended March 25, 1995 and March 27, 1994 include the accounts of CGI and its subsidiary, Corniche. All significant intercompany accounts and transactions have been eliminated in consolidation. Inventories Inventories were valued at the lower of cost (first-in, First-out method) or market for wholesale inventories ($1,906,300 in 1995). The retail inventory method ($1,240,007 in 1995) was used for inventory in retail stores. Property and Equipment Machinery and equipment, furniture and fixtures and motor vehicles are depreciated by the straight-line method over the estimated useful lives of the assets, which range principally from two to five years. Leasehold improve-ments were amortized over the lesser of the estimated useful lives or the remaining lease term. Repairs and maintenance which did not materially extend the useful lives of the assets were expensed as incurred. The cost of assets sold or retired and the related accumulated depreciation or amortization are removed from the accounts with any resulting gain or loss included in the statement of operations. Intangible Assets Goodwill Goodwill arising on acquisitions represents the cost in excess of the fair value of net assets acquired and was amortized on the straight-line method over ten years. Trademarks Trademarks were being carried at cost and were amortized over a period of two years. 29 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSSource: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Intangible Assets (Cont'd) Intangible Assets are as follows: March 31 March 25 1996 1995 Goodwill $ 0 $1,321,363 Trademarks 0 11,374 0 1,332,737 Less: Accumulated Amortization 0 126,242 $ 0 $1,206,495 Income Taxes Effective October 1993, the Company adopted SFAS 109, "Accounting for Income Taxes", which recognizes (a) the amount of taxes payable or refundable for the current year and, (b) deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an enterprise's financial statement or tax returns. Income tax expense/benefit is calculated on a separate company basis between CGI and Corniche. Reverse Premiums and Rent Free Periods Reverse premiums received on the inception of lease agreements and rent free periods were accounted for as deferred income and were amortized over the lease term on a straight-line basis. New Accounting Standards Effective fiscal 1996, the Company adopted Statement of Financial Accounting Standards No. 107, "Disclosure About Fair Value of Financial Instruments", and Statement of Position 94-6, "Disclosure of Certain Significant Risks and Uncertainties". 30 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) Translation of Foreign Currency Corniche's functional currency was pounds sterling. Assets and liabilities of non-U.S. operations were translated into U.S. dollars at year end exchange rates. Revenue and expenses were translated using average exchange rates. The resulting translation adjustment was reported as a separate component of stockholders' equity. Gains and losses from non-U.S. currency transactions were included in results of operations. Concentrations of Credit RiskSource: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Financial instruments which subject the Company to credit risk consist of deposits with financial institutions and in the case of Corniche, trade receivables. Corniche's deposits were primarily held with a single financial institution and its trade receivables were due from retailers and mass merchants. Corniche performed ongoing credit evaluations of its customers. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management's knowledge of current events and actions it may take in the future, they may ultimately differ from actual results. Per Share Information Per share information has been computed based on the weighted average number of shares and dilutive common stock equivalents outstanding during each respective period. Common stock equivalents were excluded from the loss per common share computation in fiscal 1995 as the effect of their inclusion would be anti-dilutive and for fiscal 1994 the dilutive effect was less than 3%. Retroactive effect has been given to the recapitalization discussed in Note 2. 31 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 3 UK SUBSIDIARY RECEIVERSHIP PROCEEDING Receivers were appointed to Chessbourne and TSCL on February 7, 1996 and to Corniche Distribution Limited on February 28, 1996. Corniche had prepared unaudited financial statements as of December 30, 1995. No financial statements were prepared for the period from December 31, 1995 to the date of the receivership proceedings as none were required under UK corporate laws nor generally accepted accounting standards. In addition, as a result of the receivership proceedings no audit of the financial statements of Corniche for their period from March 25, 1995 will be carried out. Accordingly, proforma financial statements reflecting the impact of the receiverships and adjustments necessary to eliminate these companies from the balance sheet of CGI were prepared as of December 30, 1995 and are as follows: PROFORMA BALANCE SHEET Consolidated Proforma December 30, EIimination December 30, ASSETS 1995 of subsidiary 1995 Current Assets: Cash $ 45,433 $ 45,223 $ 210 Accounts receivable 679,297 679,297 0 Allowances for doubtful accounts (34,146) (34,146) 0 Notes receivable 200,000 0 200,000 Inventory 2,120,367 2,120,367 0 Prepaid expenses 1,372,141 1,229,356 142,785Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Prepaid expenses 1,372,141 1,229,356 142,785 Other receivables 86,067 0 86,067 Total Current Assets 4,469,159 4,040,097 429,062 Other Assets: Property and equipment 1,781,126 1,779,894 1,232 at cost, net Intangible Assets at cost, net 1,788,499 1,788,499 0 Total Assets $8,038,784 $7,608,490 $430,294 32 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 3 UK SUBSIDIARY RECEIVERSHIP PROCEEDING (Cont'd) PROFORMA BALANCE SHEET (Cont'd) Consolidated Proforma December 30, EIimination of December 30,Liabilities 1995 subsidiary 1995 Current Liabilities:Notes Payable $ 2,026,387 $ 2,014,708 $ 11,679Note Payable on Debt Compromise 0 (77,630) 77,630Trade-Accounts Payable 4,792,996 4,467,350 325,646Current Portion of Long-term Debt 700,476 700,476 0Dividends Payable 72,897 0 72,897Accrued Liabilities 1,581,497 1,245,677 335,820Deferred Income 69,067 69,067 0Payroll and Sales Tax Payable 994,342 994,342 0Total Current Liabilities 10,237,662 9,413,990 823,672Long-term Liabilities:Long-term Debt 3,258,962 3,258,962 0Deferred Income 212,108 212,108 0Deferred Credit 33,805 33,805 0Total Long-term Liabilities 3,504,875 3,504,875 0Total Liabilities $13,742,537 $12,918,865 $823,672Cumulative Redeemable PreferenceShares andClass B Ordinary Shares 156,261 156,261 0 33 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 3 UK SUBSIDIARY RECEIVERSHIP PROCEEDING (Cont'd)Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. PROFORMA BALANCE SHEET (Cont'd) Consolidated Proforma December 30, Elimination of December 30,Liabilities 1995 subsidiary 1995 Stockholders' (deficiency) equity:7% Cumulative Convertible Preferred Stock authorized 5,000,000. shares, issued and outstanding 909,267 (December 30, 1995) and 946,069 (March 25, 1995) 946,069 0 946,069Common Stock, $0. 1 0 par value, authorized 30,000,000 shares, issued 2,623,457 (December 30, 1995) and 2,119,857 (March 25, 1995) 262,345 0 262,345Additional Paid-in Capital 793,976 0 793,976Accumulated Deficit (7,754,330) (5,563,272) (2,191,058) (5,751,940) (5,563,272) (188,668)Cumulative Translation Adjustment 96,636 96,636 0Treasury Stock at cost, 218,100 shares (204,710) 0 (204,710)Total Stockholders' Deficiency (5,860,014) (5,466,636) (393,378)Total Liabilities and Stockholders'(Deficiency) Equity $ 8,038,784 $ 7,608,490 $ 430,294 34 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 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: ------------ 40 Weeks Ended------------ December 30, December 30, 1995 1994 Net Sales $12,370,716 $16,311,552 Cost of Sales (8,554,569) (11,667,351)Gross Profit 3,816,147 4,644,201 Selling, general & admin. expenses (7,086,773) (5,527,519)Operating Loss (3,270,626) (883,318)Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (Loss) gain on sale of equipment (6,563) 1,308 Interest expense, net (501,683) (391,178)Net Loss before preferred stock dividend (3,778,872) (1,273,188) Preferred stock dividend (50,943) 0Net Loss $(3,829,815) $(1,273,188)Loss per share of common stock $(1.69) $(0.76)Weighted average number of common shares outstanding 2,260,599 1,669,336 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. 35 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 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:Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. March 31, March 25, 1996 1995 Cost $ 0 $ 311,385 Less: Accumulated Depreciation 0 102,409 Net book value $ 0 $ 208,976 36 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 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 =========== 37 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSSource: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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 $1,121NOTE 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. 38 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 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 36,802Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. shares of preferred stock converted such shares into 7,077 shares of CGI'scommon 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. 39 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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. 40 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 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: ---------- Year Ended --------- March 31, March 25, Sept. 30, Sept. 30, 1996 1995 1994 1993 Outstanding, Beginning of Year 28,980 131,367 82,900 22,875 Granted 9,000 15,896 69,117 86,000 Converted 0 (91,933) 0 0 Expired (30,480) (26,350) (20,650) (25,975) Exercised 0 0 0 0 Outstanding, End of Year 700 28,980 131,367 82,900Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 41 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 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. 42 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 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.Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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). 43 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 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. 44 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. carryforward. Earnings (loss) before income taxes and preferred stock dividend is attributable to the following sources: Years Ended In ===================================== 1996 1995 1994 United Kingdom $ 0 $(2,786,689) $3,213 United States (596,849) (595,517) 0 $(596,849) $(3,382,206) $3,213 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. 45 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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. 46 CORNICHE GROUP INCORPORATED NOTES TO FINANCIAL STATEMENTSNOTE 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.Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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. 47 CORNICHE GROUP INCORPORATED SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED MARCH 31,1996, MARCH 25,1995 AND MARCH 27,1994 COL. A COL B. COL. C COL. D COL. E ADDITIONS Balance at Beginning Charges to Costs Acquisitions Deductions Balance at Description of Period and expenses of Subsidiaries Describe End of Period Allowance for DoubtfulAccount 1994 $ 0 $ 71,832 $59,860 $ 0 $131,692 1995 131,692 349,231 0 135,815 (1) 345,108 1996 345,108 0 0 345,108 (3) 0Reserve againstNotes Receivablein Default 1994 0 0 0 0 0 1995 0 0 0 0 0 1996 0 75,000 0 0 75,000Inventory Reserve 1994 0 56,659 29,930 0 86,589 1995 86,589 9,758 0 56,123 (2) 40,224 1996 40,224 0 0 40,224 (3) 0(1) Elimination of reserve on bad debt write-off.(2) Release of provision no longer required.(3) Elimination of UK subsidiary following receivership proceeding. 48ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE On April 5, 1995, Registrant terminated its relationship with the accounting firm of Ernst & Young, LLP ("Ernst & Young") as Registrant's independent auditors responsible for the audit of Registrant's financial statements. This action was recommended by Registrant's Audit Committee and approved by its Board of Directors. The decision to terminate Ernst & Young as Registrant's principal independent auditors was made because another accounting firm, Coopers & Lybrand LLP ("Coopers"), had been the auditor for Registrant's then recently-acquired subsidiary, CDL, for some time. In connection with the audits of Registrant's financial statements for the fiscal year ended September 30, 1994, and in the subsequent interim period, there were no disagreements with Ernst & Young on any matters of accounting principles or practices, financial statement disclosure, or auditing scope and procedures which, if not resolved to the satisfaction of Ernst & Young, would have caused Ernst & Young to make reference to such matter in their report. Ernst & Young's report on Registrant's financial statements for its fiscal year ended September 30, 1994 expressed an unqualified opinion on those financial statements based on their audit but included an explanatory paragraph noting a "substantial doubt about Registrant's ability to continue as a going concern" based upon the several matters summarized in such report. Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. During the period April 1995 through on or about July 6, 1995 Registrant negotiated with Coopers regarding the preparation of Registrant's audited financial statements for the year ended March 25, 1995. Coopers subsequently declined to act as Registrant's independent auditors even though Coopers' U.K. office continued to act as auditor for Registrant's subsidiary, CDL, and provided audited financial statements for CDL for the year ended March 25, 1995. Coopers decision not to act as Registrant's auditors was not based on any disagreements with Registrant on any matters of accounting principles or practices, financial statement disclosure or auditing scope and procedures which, if not resolved to Coopers satisfaction, would have caused Coopers to make reference to such matters in their reports. Coopers never offered Registrant a formal reason for declining to act as Registrant's auditors although Registrant was led to believe that Coopers' U.S. offices did not want to act for a company with a recent experience of significant losses coupled with prior shareholder litigation. On July 20, 1995, Registrant appointed Mahoney Cohen & Company, PC ("Mahoney Cohen") as Registrant's independent auditors responsible for the audit of Registrant's financial statements. This action was recommended by Registrant's Audit Committee and approved by its Board of Directors. Registrant had not consulted Mahoney Cohen regarding any accounting or financial reporting issues prior to that firm being retained by Registrant. In connection with its audit of Registrant's financial statements for the fiscal year ended March 25, 1995, and in the subsequent interim period through on or about April 17, 1997 when the relationship was formally terminated and it resigned as Registrant's independent auditors, there were no disagreements between Mahoney Cohen and Registrant on any matters of accounting principles or practices, financial statement disclosure or auditing scope and procedures which, if not resolved to the satisfaction of Mahoney Cohen, would have caused Mahoney Cohen to make reference to such matters in their report. Mahoney Cohen's report on Registrant's financial statements for the fiscal year ended March 25, 1995 expressed an unqualified opinion on those financial statements based upon their audit but included a paragraph noting a "substantial doubt about Registrant's ability to continue as a going concern" based upon the several matters summarized in such report. In February 1997 Registrant appointed Simontacchi & Co., P.A. ("Simontacchi") as Registrant's independent auditors responsible for the audit of Registrant's financial statements. This action was approved by Registrant's board of directors. Registrant had not consulted Simontacchi regarding any accounting or financial reporting issues prior to that firm being retained by Registrant. 49PART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANTDirectors The following sets forth, as at March 31, 1996, the directors of Registrant, their respective ages, the year in which each was first elected or appointed a director, and any other office in Registrant held by each director. Each director holds office until the next annual meeting of shareholders and until their successors have been elected and qualified. Other Offices DirectorSource: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Other Offices Director Name Held Age Since James J. Fyfe Vice President, Chief 42 1995 Operating Officer Mathew P. Pazaryna None 54 1993 In September 1996, Mathew P. Pazaryna ceased all his activities relating to his engagement as a director of Registrant. Efforts to contact him proved unsuccessful and consequently, his association with Registrant was terminated. Although no written resignation was provided to Registrant by Mr. Pazaryna, Registrant, based upon the actions of Mr. Pazaryna, treated Mr. Pazaryna as having resigned effective September 1996. During the fiscal year ended March 31, 1996 several other directors of Registrant resigned their positions as such including George Lombardi (January 1996), Manfred Pfeiler (May 28, 1995), Werner Haas (June 27, 1995), Brian J. Baylis (March 6, 1996), and Susan A.M. Crisp (March 6, 1996). None of the foregoing resignations were the result of any disagreements with Registrant on any matter relating to Registrant's operations, policies or practices. The resignations of Brian J. Baylis and Susan A.M. Crisp were the result of the receivership proceedings instituted against Registrant's operating subsidiaries. Executive Officers The following sets forth the executive officers of Registrant, their respective ages, the year in which each was first appointed an executive officer of Registrant and all positions and offices in Registrant held by each such person as at March 31, 1996. Office Held Name Offices Held Age Since James J. Fyfe Vice President 42 May 1995 During the fiscal year ended March 31, 1996 all of Registrant's executive officers, with the exception of James J. Fyfe, resigned. Brian J. Baylis and Susan A. M. Crisp resigned on March 6, 1996 as the result of the receivership proceedings instituted against Registrant's operating subsidiaries. At the time of their resignations, Mr. Baylis had been serving as Registrant's president and chief executive and Ms. Crisp had been serving as Registrant's vice president for finance and administration, chief financial officer, treasurer and secretary. Mr. Baylis and Ms. Crisp had been serving in such capacities as of March 25, 1995 when they replaced Werner Haas and George Lombardi, respectively, following Registrant's sale of its medical imaging products subsidiary, FMI, to Chester. 50Family Relationships No family relationship exists between any director, executive officer of Registrant or any person contemplated to become such.Business Experience The following summarizes the occupation and business experience during at least the five years preceding March 31, 1996 of each person who served as a director and/or executive officer of Registrant at March 31, 1996. JAMES J. FYFE has been a director, vice president and the chief operating officer of Registrant since May 1995. From January 1991 to May 1995, he was an independent business consultant. Prior to January 1991 he was chairman and chief executive officer of the Lewis Group, a UK based chain of department stores and specialty retail outlets.Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. MATHEW P. PAZARYNA was a director of Registrant from December 1993 until September 1996. From May 1995 through September 1996, Mr. Pazaryna was an independent business consultant. From 1992 until April 1995, he was the senior vice president and chief financial officer of Bio-Technology General Corp. From 1966 until 1992, he held positions in finance, accounting, and strategic planning for several subsidiaries and divisions of Johnson & Johnson, a consumer products manufacturer.ITEM 11. EXECUTIVE COMPENSATION The following table sets forth the aggregate compensation paid during the three years ended March 31, 1996 to each person who served as Registrant's Chief Executive Officer during fiscal 1996 and any other executive officer of Registrant earning in excess of $100,000 for services rendered during fiscal 1996. Summary Compensation Table Long-Term Compensation Annual Compensation Awards Payouts -------------------- -------------------------- Other AllName Annual Rest. Otherand Compen- Stock Options LTIP Compen-Principal Salary Bonus sation Awards SARs Payouts sationPosition Year ($) ($) ($)(1) ($) (#) ($) ($)(2) Brian J. Baylis 1996 79,335 0 10,311 0 1,500 0 0 CEO(3) 1995 78,200 0 16,198 0 0 0 17,204 1994 37,500 0 9,808 0 0 0 16,500(1) Includes car allowance.(2) Includes pension contributions.(3) Compensation includes amounts paid to Mr. Baylis by CDL and its subsidiaries prior to their acquisition by Registrant in March 1995. Mr. Baylis resigned as Registrant's chief executive officer on March 6, 1996. 51 Option/SAR Grants During The Fiscal Year Ended March 31, 1996 Individual Grants Number % of Shares of Total Common Stock Options/ Underlying SARs Options/ Granted to Exercise SARs Employees or Base Granted in Fiscal Price ExpirationName (#) Year ($/Sh) Date - - ------------------------------------------------------------------------------ Brian J. Baylis 1,500 16.67% .48 June 6, 1996Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Aggregate Options/SAR Exercises During Fiscal Year Ended March 31, 1996 and Fiscal Year-End Options/SAR/Values Value of Number of Unexercised Unexercised In-the-Money Options/SARs Options/SARs At FY-End (#) At FY-End ($) Shares Acquired Exercisable/ Exercisable/Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable Brian J. Baylis 0 0 1,500 (unexercisable) N/ACompensation 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 52Form 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. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTSecurity 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSTransactions 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. 53 PART IVITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-KFinancial 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 statementsFinancial 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.Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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: Exhibit No. as filed with registration statement or report specified below 3 (a) Certificate of Incorporation filed September 18, 1980 (1) 3 (b) Amendment to Certificate of Incorporation filed September 29, 1980 (1) 3 (c) Amendment to Certificate of Incorporation filed July 28, 1983 (2) 3(b) (d) Amendment to Certificate of Incorporation filed February 10, 1984 (2) 3(d) (e) Amendment to Certificate of Incorporation filed March 31, 1986 (3) 3(e) 54 (f) Amendment to Certificate of Incorporation filed March 23, 1987 (4) 3(g) (g) Amendment to Certificate of Incorporation filed June 12, 1990 (5) 3.8 (h) Amendment to Certificate of Incorporation filed September 27, 1991 (6) 3.9 (i) Certificate of Designation filed November 12, 1984 (7) 3.8 (j) Amendment to Certificate of Incorporation filed September 28, 1995 * (k) By-laws of the Registrant, as amended on December 22, 1983(2) 3(c) (l) By-laws of the Registrant, as amended on December 5, 1985(3) 3(f) (m) By-laws of the Registrant, as amended on April 25, 1991(6) 3.10 4 (a) Form of Underwriter's Warrant (6) 4.9.1 (b) Form of Promissory Note - 1996 Offering * (c) Form of Promissory Note - 1997 Offering * (d) Form of Common Stock Purchase Warrant - 1996 Offering * (e) Form of Common Stock Purchase Warrant - 1997 Offering * 10 (a) Form of Financial Advisory Agreement between Registrant and Commonwealth Associates (6) 10.13 (b) Underwriting Agreement among Registrant, Commonwealth Associates and Selling Stockholders, dated November 15, 1991 (8) 10.14 (c) 1986 Stock Option Plan, as amended (7) 10.6 (d) 1992 Stock Option Plan (9) B (e) Novation Agreement relating to a Share Sale and Purchase Agreement dated April 24, 1994 among Brian John Baylis, Susan Ann Meadows Crisp and Fidelity Medical, Inc. dated March 2, 1995 (10) 2(a) (f) Supplemental Agreement relating to a Share Sale and Purchase Agreement dated April 24, 1994 among Brian John Baylis, Susan Ann Meadows Crisp and Fidelity Medical, Inc. dated March 2, 1995 (10) 2(b) (g) Agreement for sale and purchase of the entire issued share capital of Corniche Distribution Limited amongSource: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Brian John Baylis, Susan Ann Meadows Crisp and Fidelity Medical, Inc. dated March 2, 1995 (10) 2(c) (h) Letter of Agreement between Fidelity Medical, Inc. and NWCM Limited dated as of March 6, 1995 (10) 2(d) (i) Supplemental Agreement with respect to Options dated March 2, 1995 (10) 9(b) (j) Stock Purchase Agreement dated as of March 25, 1995 by and between Fidelity Medical, Inc. and Chester Holdings, Ltd (11) 2(a) (k) Promissory Note and Option Agreement dated as of March 25, 1995 from Chester Holdings, Ltd. to Fidelity Medical, Inc. (11) 2(b) 55 (l) Form of Warrant of Fidelity Medical, Inc. to be issued to employees of Fidelity Medical, Inc., a New Jersey corporation, in replacement of stock options (11) 2(c) (m) Stock Purchase Agreement dated as of January 30, 1997 by and among Registrant, the Bank of Scotland and 12 Buyers * (n) Mutual Release dated as of January 30, 1997 by and among Registrant, James Fyfe and the Bank of Scotland * 27 Financial Data Schedule 99 (a) Opinion Letter of Smithsons Solicitors dated March 7, 1997 regarding the status of Registrant's former subsidiaries as the result of the February 1996 receivership proceedings. * 99 (b) Letter of James J. Fyfe Regarding Unavailablity of Re-signed Audit Reports from Coopers & Lybrand LLP * 99 (c) Letter of Mahoney Cohen Rashba & Pokart, CPA, PC Regarding Their Inability to Re-Sign Their July 25, 1995 Audit Report ** 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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 byreference.(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. 56(10) Filed with the Securities and Exchange Commission as an exhibit, numberedas 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. 57 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, 1997JAMES J. FYFEPrincipal Financial and Accounting Officer:/s/ James J. Fyfe Vice President April 24, 1997JAMES J. FYFEA Majority of the board of directors:Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. /s/ James J. Fyfe April 24, 1997JAMES J. FYFE 58 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. Exhibit No. as filed with registration statement or report specified below Page No. 3 (a) Certificate of Incorporation filed September 18, 1980 (1) 3 (b) Amendment to Certificate of Incorporation filed September 29, 1980 (1) 3 (c) Amendment to Certificate of Incorporation filed July 28, 1983 (2) 3(b) (d) Amendment to Certificate of Incorporation filed February 10, 1984 (2) 3(d) (e) Amendment to Certificate of Incorporation filed March 31, 1986 (3) 3(e) (f) Amendment to Certificate of Incorporation filed March 23, 1987 (4) 3(g) (g) Amendment to Certificate of Incorporation filed June 12, 1990 (5) 3.8 (h) Amendment to Certificate of Incorporation filed September 27, 1991 (6) 3.9 (i) Certificate of Designation filed November 12, 1984 (7) 3.8 (j) Amendment to Certificate of Incorporation filed September 28, 1995 * 62 (k) By-laws of the Registrant, as amended on December 22, 1983(2) 3(c) (l) By-laws of the Registrant, as amended on December 5, 1985(3) 3(f) (m) By-laws of the Registrant, as amended on April 25, 1991(6) 3.10 4 (a) Form of Underwriter's Warrant (6) 4.9 (b) Form of Promissory Note - 1996 Offering * 69 (c) Form of Promissory Note - 1997 Offering * 76 (d) Form of Common Stock Purchase Warrant - 1996 Offering * 83 (e) Form of Common Stock Purchase Warrant - 1997 Offering * 88 59 10 (a) Form of Financial Advisory Agreement between Registrant and Commonwealth Associates (6) 10.13 (b) Underwriting Agreement among Registrant, Commonwealth Associates and Selling Stockholders, dated November 15, 1991 (8) 10.14 (c) 1986 Stock Option Plan, as amended (7) 10.6 (d) 1992 Stock Option Plan (9) B (e) Novation Agreement relating to a Share Sale and Purchase Agreement dated April 24, 1994 among Brian John Baylis, Susan Ann Meadows Crisp and FidelitySource: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Medical, Inc. dated March 2, 1995 (10) 2(a) (f) Supplemental Agreement relating to a Share Sale and Purchase Agreement dated April 24, 1994 among Brian John Baylis, Susan Ann Meadows Crisp and Fidelity Medical, Inc. dated March 2, 1995 (10) 2(b) (g) Agreement for sale and purchase of the entire issued share capital of Corniche Distribution Limited among Brian John Baylis, Susan Ann Meadows Crisp and Fidelity Medical, Inc. dated March 2, 1995 (10) 2(c) (h) Letter of Agreement between Fidelity Medical, Inc. and NWCM Limited dated as of March 6, 1995 (10) 2(d) (i) Supplemental Agreement with respect to Options dated March 2, 1995 (10) 9(b) (j) Stock Purchase Agreement dated as of March 25, 1995 by and between Fidelity Medical, Inc. and Chester Holdings, Ltd (11) 2(a) (k) Promissory Note and Option Agreement dated as of March 25, 1995 from Chester Holdings, Ltd. to Fidelity Medical, Inc. (11) 2(b) (l) Form of Warrant of Fidelity Medical, Inc. to be issued to employees of Fidelity Medical, Inc., a New Jersey corporation, in replacement of stock options (11) 2(c) (m) Stock Purchase Agreement dated as of January 30, 1997 by and among Registrant, the Bank of Scotland and 12 Buyers * 93 (n) Mutual Release dated as of January 30, 1997 by and among Registrant, James Fyfe and the Bank of Scotland * 115 27 Financial Data Schedule * 118 99 (a) Opinion Letter of Smithsons Solicitors dated March 7, 1997 regarding the status of Registrant's former subsidiaries as the result of the February 1996 receivership proceedings. * 119 99 (b) Letter of James J. Fyfe Regarding Unavailablity of Re-signed Audit Reports from Coopers & Lybrand LLP * 206 99 (c) Letter of Mahoney Cohen Rashba & Pokart, CPA, PC Regarding Their Inability to Re-Sign Their July 25, 1995 Audit Report * 210* 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. 60(2) Filed with the Securities and Exchange Commission as an exhibit, numberedas 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 Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 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. 61Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 3 ( j ) 62 STATE OF DELAWARE Page 1 OFFICE OF THE SECRETARY OF STATE I, EDWARD J. FREEL, secretary of state of the state of delaware, do hereby certify the attached is a true copy and correct copy of the certificate of amendment of "fidelity medical, inc.", changing its name from "fidelity medical, inc.", to "corniche group incorporated", filed in this office on the twenty-eighth dat of September, a.d. 1995, at 9 o'clock a.m. a certified copy of this certificate has been forwarded to the kent county recorder of deeds for recording. [DELAWARE'S STATE SEAL APPEARS AS WATERMARK] /s/ Edward J. Freel Edward J. Freel, Secretary of State AUTHENTICATION: 7659162 DATE: 09-29-95 0899444 0100 950223828 63 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF FIDELITY MEDICAL, INC. (Under Section 242 of the General Corporation Law) The undersigned, being the President and Secretary, respectively, of Fidelity Medical, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), do hereby amend and certify as follows: 1. The name of the Corporation is Fidelity Medical, Inc. 2. The Certificate of Incorporation of the Corporation is hereby amended effective October 1, 1995 to effect the following amendments which were set forth in a resolution adopted by the board of directors and adopted by the holders of a majority of the outstanding shares of common stock of the Corporation entitled to vote thereon, in accordance with the provisions of Section 242 of the Delaware General Corporation Law: (a) to change the name of the Corporation, (b) to reduce the number of shares of common stock, par value $.01 per share ("Common Stock"), issued and outstanding by means of a reverse stock split of one share for every ten shares outstanding on October 1, 1995 (without reducing the number of authorized common shares), and (c) to increase the number of authorized shares of Preferred Stock.Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 3. To accomplish the second of the foregoing amendments, Article FIRST of the Restated Certificate of Incorporation is hereby amended to change the name of the corporation as follows: "The name of the Corporation is CORNICHE GROUP INCORPORATED." 4. To accomplish the second of the foregoing amendments, Article FOURTH of the Restated Certificate of Incorporation is amended by adding the following clause at the end of such Article, which reads in its entirety as follows: Immediately prior to the date of filing this Certificate of Amendment, there were 24,083,075 shares of Common Stock outstanding. The Corporation hereby is reducing the number of shares of Common Stock issued and outstanding by means of a reverse stock split of one for every ten shares outstanding on October 1, 1995. Upon surrender to the Corporation of certificates (duly endorsed in blank) representing shares of common Stock to be converted, certificates representing the appropriate number of 64 shares of Common Stock will be issued. with respect to any resulting fractional shares, the Corporation shall (i) arrange for the disposition of fractional interests by those entitled thereto and (ii) pay in cash the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined. 5. To accomplish the third of the foregoing amendments, Article FOURTH of the Restated Certificate of Incorporation is restated in its entirety as follows (with the preceding paragraph to follow): FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is THIRTY FIVE MILLION (35,000,000) consisting of (i) Thirty Million(30,000,000) shares of Common Stock of the par value of $.10 per share and (ii) Five Million (5,000,000) shares of Preferred Stock of the par value of $.01 per share. The designations and the powers, preferences and right, and the qualifications, limitations or restrictions thereof of the Preferred Stock, and the Common Stock are as follows: A. Preferred Stock. The Board of Directors is authorized, subject to limitations prescribed by law and the provisions of this Article FOURTH, to provide for the issuance of the Preferred Stock in series and by filing a Certificate pursuant to the Delaware General Corporation Law to establish the number of shares to be included in each such series. The Preferred Stock may be issued either as a class without series, or as so determined from time to time by the Board of Directors, either in whole or in part in one or more series, each series to be appropriately designated by a distinguishing number, letter or title prior to the issue of any shares thereof. Whenever the term "Preferred Stock" is used in this Article FOURTH, it shall be deemed to mean and include Preferred Stock issued as a class without series, or one or more series thereof, or both unless the context shall otherwise require. There is hereby expressly granted to the Board of Directors of the Corporation authority, subject to the limitations provided by law, to fix the voting power, the designations, and the relative preferences, powers, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the shares of each series of said Preferred Stock and the variations in the relative powers, rights, preferences and limitations as between series, and to increase the number of shares constituting each series, and to decrease such number of shares (list not to less than tile number of Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. outstanding shares of the series), in the resolution or resolutions adopted by the Board of Directors providing for the issue of said Preferred stock. The authority of the Board of Directors of die corporation with respect to each series shall include, but shall not be limited to, the authority to determine the following: 1. The designation of the series; 2. The number of shares initially constituting such series; 65 3. The increase, and the decrease to a number not less than thenumber of the outstanding shares of such series, of the number of sharesconstituting such series theretofore, fixed; 4. The rate or rates and the times and conditions under which dividendson the shares of such series shall be paid, and, (i) if such dividends are payable in preference to, or in relation to, the dividends payable on any other class or classes of stock, the terms and conditions of such payment, and (ii) if such dividends shall be cumulative, the date or dates from and after which they shall accumulate; 5. Whether or not the shares of such series shall be redeemable, and, if such shares shall be redeemable, the terms and conditions of such redemption, including, but not limited to, the date or dates upon or after which such shares shall be redeemable and the amount per share which shall be payable upon such redemption, which amount may vary under conditions and at different redemption dates; 6. The amount payable on the shares of such series in the event of the dissolution of, or upon any distribution of the assets of, the Corporation; 7. Whether or not the shares of such series may be convertible into, or exchangeable for, shares, of any other class or series and the price or prices and the rates of exchange and the terms of any adjustments to be made in connection with such conversion or exchange; 8. Whether or not the shares of such series shall have voting rights in addition to the voting rights provided by law, and, if such shares shall have such voting rights, the terms and conditions thereof, including but not limited to, the right of the holders of such shares to vote as a separate class either alone or with the holders of shares of one or more other series of Preferred Stock and the right to have more or less than one vote per share; 9. Whether or not a purchase fund shall be provided for the shares ofsuch series, and, if such a purchase fund shall be provided, the terms and conditions thereof; 10. Whether or not a sinking fund shall be provided for the redemption of the shares of such series and if such a sinking fund shall be provided, the terms and conditions thereof; and 11. Any other powers, preferences and relative, participating, optional, or other special rights, and qualifications, limitations or restrictions thereof, as shall not be inconsistent with the provisions of this Article FOURTH or the limitations provided by law. 66B. Common Stock. 1. Subject to the rights of the Preferred stockholders, the holders ofthe Common Stock shall be entitled to receive such dividends as may be declaredthereon by the Board of Directors of the Corporation in its discretion, from Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. time to time, out of any funds or assets of the Corporation lawfully available for the payment of such dividends. 2. In the event of any liquidation, dissolution or winding up of the Corporation, or any reduction of its capital, resulting in a distribution of its assets to its stockholders, whether voluntary or involuntary, then, after there shall have been paid or set apart for the holders of the Preferred Stock the full preferential amounts to which they are entitled, the holders of the Common Stock shall be entitled to receive as a class, pro rata, the remaining assets of the Corporation available for distribution to its stockholders. 3. For any and all purposes of this Certificate of Incorporation neither the merger or consolidation of the Corporation into or with any other corporation, nor the merger or consolidation of any other corporation into or with the Corporation, nor a sale, transfer or lease of all or substantially all of the assets of the Corporation, or any other transaction or series of transactions having the effect of a reorganization shall be deemed to be a liquidation, dissolution or winding-up of the Corporation. 4. Except as otherwise expressly provided by, law or in a resolution of the Board of Director, providing voting rights to the holders of the Preferred Stock, the holders of the Common Stock shall possess exclusive voting power for the election of directors and for all other purposes and each holder thereof shall be entitled to one vote for each share thereof. 67 IN WITNESS WHEREOF, the undersigned being duly elected officers of the above-named corporation, have executed this Certificate of Amendment and affirm the statements herein contained on this 28th day of September, 1995. FIDELITY MEDICAL INC. By: /s/ Brian J. Baylis Brian J. Baylis, PresidentATTEST:/s/ Susan A.M. Crisp Susan A. M. Crisp, Secretary 68Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 4 ( b ) 69NEITHER THIS PROMISSORY NOTE NOR THE SECURITIES ISSUABLE UPON THE CONVERSION THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW, AND MAY BE TRANSFERRED ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR ANY APPLICABLE STATE SECURITIES LAW OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE PROMISSORY NOTENo. NA-__________ $25,000Dated: ____________, 1996 Wayne, New JerseyFOR VALUE RECEIVED, CORNICHE GROUP INCORPORATED, a Delaware corporation (hereinafter called the "Company), hereby promises to pay ________________________________________ (Name) ________________________________________ (Street and No.) ________________________________________ (City, State and Zip Code) ________________________________________ (Social Security No. or Federal Employer ID No.) ________________________________________ (Date of Birth)(herein called the "Holder"), or to his order, the sum of TWENTY-FIVE THOUSAND DOLLARS ($25,000), together with interest thereon at the rate of eight percent (8%) per annum from the date hereof on ________, _____. Interest shall be payable at maturity, and shall be computed on the balance of principal outstanding from time to time based on actual number of days elapsed. Both principal hereof and interest thereon are payable in lawful money of the United States of America at the Holder's address above or such other address as the Holder shall designate in writing delivered to the Company from time to time. 70 ARTICLE ONE EVENTS OF DEFAULT If any of the following events of default (each, an "Event of Default") shall occur, the Holder hereof, at its option, may declare the sum of principal then remaining unpaid hereon immediately due and payable.1.01 Event of DefaultSource: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. For purposes of this instrument, an Event of Default will be deemed to have occurred if: (a) the Company shall fail to pay the principal of or interest due on this Promissory Note on the due date and such non-payment shall continue for a period of five (5) days from the date due; or (b) a receiver, liquidator or trustee of the Company or of any property of the Company, shall be appointed by court order and such appointment shall remain in effect for 60 days; or the Company shall be adjudged bankrupt or insolvent; or any of the property of the Company shall be sequestered by court order and such order shall remain in effect for more than 60 days; or a petition to reorganize the Company under any bankruptcy, reorganization or insolvency law shall be filed against the Company and shall not be dismissed within 60 days after such filing; or (c) the Company shall file a petition in voluntary bankruptcy or requesting reorganization under any provision of any bankruptcy, reorganization or insolvency law or shall consent to the filing of any petition against it under any such law; or (d) the Company shall make a formal or informal assignment for the benefit of its creditors or admit in writing its inability to pay its debts generally when they become due or shall consent to the appointment of a receiver, trustee or liquidator of the Company or of all or part of the property of the Company after the date hereof. 1.02 Remedies on Default If an Event of Default shall have occurred, in addition to its rights and remedies under this Promissory Note, and any other instruments, the Holder may at its option by written notice to the Company declare all indebtedness to the Holder hereunder to be due and payable, together with all reasonable expenses of enforcement of the Holder's rights including legal fees and related disbursements, whereupon the same shall forthwith mature and become due and payable without any further notice to and without presentment, demand, protest or notice of protest, all of which are hereby waived. The Holder may proceed to protect and enforce its rights by suit in equity, action at law or other appropriate proceedings, including, without limitation action for specific performance of any agreement contained herein or in any other instrument, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any right, power or remedy granted hereby or by law, equity or otherwise. ARTICLE TWO CONVERSION PRIVILEGE The Company hereby grants to the Holder of this Promissory Note the right to convert the principal and interest on this Promissory Note into fully paid and non-assessable shares of the Company's Common Stock, $0.10 par value, at the "Conversion Price" per share. The "Conversion Price" is defined as ten cents ($0.10). 71The right to convert may be exercised at any time after an Event of Default up to and including _____________, ____. The right to convert may only be exercised with respect to the entire amount due on this Promissory Note at the exercise date. The Company will reserve 300,000 (three hundred thousand) shares of its Common Stock for the foregoing purpose. 2.01 Exercise Procedure (a) The Conversion privilege shall be deemed to have beenSource: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. exercised (the "Exercise Time") when the Company shall have received all of the following: (i) a properly completed Exercise Agreement in the form set out in Section 2.02 below executed by the Holder; and (ii) this Promissory Note. (b) Certificates for the underlying shares acquired shall be delivered to the purchaser within 20 days after the Exercise Time. 2.02 Exercise Agreement Upon exercise, the undersigned shall execute an agreement stating as follows: "An event of default has occurred which has not been cured and therefore the undersigned irrevocably elects to subscribe for and purchase shares of the Company's Common Stock as provided in the Promissory Note, and makes payment in full therefor by conversion. The undersigned hereby represents and warrants that the shares of Common Stock to be acquired upon exercise are being acquired for its own account, without any present intention of reoffering, reselling or distributing such Common Stock, except to the extent permitted under the Securities Act of 1993, as amended".2.03 Changes in Capital Structure (a) In the event that the outstanding shares of Common Stock of the Company are hereafter increased or decreased, or changed into or exchanged for a different number or kind of shares or other securities of the Company, or of any other corporation, by reason of reorganization, merger, consolidation, recapitalization, reclassification, stock split-up, combination of shares, or dividends payable in capital stock of the Company, appropriate adjustments shall be made by the Company in the number and kind of shares to be purchased upon exercise of this conversion right to the end that the Holder's proportionate interest shall not be altered. All such adjustments made by the Board of Directors of the Company shall be conclusive, absent manifest error. (b) Until this Promissory Note has been paid in full or the conversion privilege has been exercised, the Company will not issue any shares of its Common Stock for a price less than the then fair market value of the stock. ARTICLE THREE RESTRICTIONS ON TRANSFER The Holder, by execution of the acknowledgment at the end of this Promissory Note, acknowledges that it understands that the Company will rely upon the representations set forth herein in issuing the Promissory Note and the Underlying Shares, if any, without registration under the Securities Act of 1933, as amended, the New Jersey Uniform Securities Law, or any other state securities law. 72 Accordingly, the Holder, by acceptance of the Promissory Note, represents and warrants that this offering is being made pursuant to the exemption from registration with the Securities and Exchange Commission ("SEC") afforded by Sections 3(b) and/or 4(2) of the Securities Act of 1933, as amended ("Act") relating to transactions by an issuer not involving any public offering. The Holder understands that the Company has no present intention, and is under no obligation to, register the Promissory Note or the Underlying Shares under the Act, or any applicable state law. The Holder understands that due to lack of registration, the Promissory Note and the Underlying Shares will be restricted securities, that the holder Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. must bear the economic risk of the investment for an indefinite period, that the Promissory Note and the Underlying Shares may not be sold, pledged or otherwise disposed of unless they are registered under the Act and any applicable state securities law, or an exemption from such laws is available and the Company is supplied with an opinion of counsel to the Holder, satisfactory to the Company, that registration is not required under any of such laws, and in the opinion of counsel for the Company, such sale, transfer, or pledge will not cause the Company to fail to be in compliance with the exemption provisions under which the Promissory Note or the Underlying Shares were issued. The Holder has such knowledge and experience in financial and business affairs that it is capable of evaluating the merits and risks of the prospective investment. The Holder is able to bear the economic risk of this investment. An investment in the Promissory Note and the Underlying Shares is suitable for the Holder in light of its financial position and investment objectives, with full knowledge that this investment could result in a complete loss. The Holder recognizes that the Promissory Note represents a HIGH-RISK, SPECULATIVE INVESTMENT and that there is no assurance that any return will be received thereon. The Holder can afford a total loss of this investment.The Holder is an Accredited Investor" as that term is defined in Regulation D under the Securities Act of 1933 as amended. The Promissory Note is being, and the Underlying Shares will be, purchased for the Holder's own account for investment purposes and not with a view to the resale or distribution thereof by the Holder. The Holder has reviewed the Company's Annual Report on Form 10-K for the year ended March 25, 1995; its quarterly reports on Form 10-Q for the quarters ended June 17, October 6, and December 30, 1995; its proxy statement for an annual meeting held on September 28, 1995; and all current reports on Form 8-K filed on or after March 25, 1995, including but not limited to, the Form 8-K filed on February 12, 1996. The Holder has also been informed that the proceeds of this investment shall be used for general corporate purposes, including the settlement of accrued past due liabilities due to the Company's professional advisors, suppliers of goods and corporate services, director and officer liability insurance premiums and director and officer fees and expenses. Prior to the date hereof, the Holder has had ample opportunity to ask questions of and receive answers from the officers and directors of the Company, concerning the Company, the Promissory Note and the Company's business and to obtain any additional information which was considered necessary to verify the information supplied by those individuals. The Holder understands that a restrictive legend in substantially the following form shall be placed on the certificates representing the Underlying Shares:"The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended ("Act"). Such shares have been acquired for investment and may not be publicly offered or sold in the absence of (1) an effective registration for such shares under the Act; (2) opinions of counsel to the Company and to the holder hereof and presented to the Company prior to any proposed transfer to the effect that registration is not required under the Act; or (3) a letter presented to the Company, prior to any proposed 73transfer, from the staff of the Securities and Exchange Commission, to the effect that it will not take enforcement action if the proposed transfer is made without registration under the Act" Except as set forth in the documents which the Holder has reviewed, no representations or warranties have been made to the Holder by the Company. In entering into this transaction, the Holder is not relying upon any Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. information, other than the results of its own independent investigation. ARTICLE FOUR PIGGY-BACK REGISTRATION RIGHTS If this Promissory Note has been converted to Common Stock, and if the Company proposes to file a registration statement under the Securities Act with respect to an offering by the Company of Company Common Stock (other than a registration statement on Form S-4 or S-8 or any form substituting therefor) the Company shall in each such case give written notice of such proposed filing and the proposed method of distribution of securities covered by such proposed filing to the Holder of shares issued upon conversion of this Promissory Note at least ten (10) days before the anticipated filing date. The Company will use its best efforts to include in the registration statement proposed to be filed by the Company all shares issued upon conversion hereof and other Promissory Notes in this series with respect to which the Company has received written requests for inclusion therein prior to the anticipated filing date. Notwithstanding the foregoing, if the managing underwriter or underwriters of such offering deliver a written opinion to the holders of securities to be included therein to the effect that .the total amount of securities intended to be included in such offering would materially and adversely affect the success of such offering, then the amount of securities to be offered for the account of the participating holders shall be reduced (pro rata among the participating holders) to the extent necessary to reduce the total amount of securities to be included in such offering to the amount recommended by such managing underwriter or underwriters. The Holder shall provide the Company and any underwriters with any further documents and assurances reasonably required to effect such registration. Notwithstanding anything to the contrary herein, if the Company determines, in its business judgment, that there are business reasons to delay the effectiveness of,-or to withdraw, a registration statement prior to it becoming effective under the Securities Act, the Company shall not be deemed to have breached any of its obligations hereunder. ARTICLE FIVE MISCELLANEOUS5.01 Failure or Delay Not Waiver No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude, other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.5.02 Notices Any notice herein required or permitted to be given shall be given by federal express or similar overnight courier or by same day courier service or by certified mail, return receipt requested, if to the Holder, at the address set forth on the first page hereof, or, if to the Company: 74 Corniche Group Incorporated, Wayne Interchange Plaza 1, 145 Route 46 West, Wayne, New Jersey 07470.5.03 Amendments The term "Promissory Note" or "this Promissory Note" and all reference thereto, as used through this instrument, shall mean this instrument as originally executed or, if later amended or supplemented, then, as so amended or supplementedSource: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 5.04 Assignability This Promissory Note shall be binding on the Company, its successors and assigns, and shall inure to the benefit of the Holder, its successors and assigns. 5.05 Governing Law and Jurisdiction This Promissory Note has been executed in and shall be governed by the laws of the State of New Jersey and any proceeding brought to enforce its terms shall be brought in a federal or state court located in the State of New Jersey. 5.06 No Personal Liability No officer, director, shareholder, employee, consultant or agent of the Company shall be personally liable for repayment of this Promissory Note. IN WITNESS WHEREOF, the Company has caused this Promissory Note to be signed in its name by its duly authorized officer and its-corporate seal to be affixed hereto. CORNICHE GROUP INCORPORATED _________________________________ James J. Fyfe Director and Vice President I acknowledge the accuracy of the representations in Article Three of this Promissory Note. By:______________________________ 75Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 4 ( c ) 76NEITHER THIS PROMISSORY NOTE NOR THE SECURITIES ISSUABLE UPON THE CONVERSION THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW, AND MAY BE TRANSFERRED ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR ANY APPLICABLE STATE SECURITIES LAW OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE PROMISSORY NOTENo. NA-__________ $25,000Dated: ____________, 1997 Wayne, New JerseyFOR VALUE RECEIVED, CORNICHE GROUP INCORPORATED, a Delaware corporation (hereinafter called the "Company), hereby promises to pay ______________________________________________ (Name) ______________________________________________ (Street and No.) ______________________________________________ (City, State and Zip Code) ______________________________________________ (Social Security No. or Federal Employer ID No.) ______________________________________________ (Date of Birth)(herein called the "Holder"), or to his order, the sum of TWENTY-FIVE THOUSAND DOLLARS ($25,000), together with interest thereon at the rate of eight percent (8%) per annum from the date hereof on __________ ___, 1997. Interest shall be payable at maturity, and shall be computed on the balance of principal outstanding from time to time based on actual number of days elapsed. Both principal hereof and interest thereon are payable in lawful money of the United States of America at the Holder's address above or such other address as the Holder shall designate in writing delivered to the Company from time to time. ARTICLE ONE EVENTS OF DEFAULT If any of the following events of default (each, an "Event of Default") shall occur, the Holder hereof, at its option, may declare the sum of principal then remaining unpaid hereon immediately due and payable. 77Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 1.01 Event of Default For purposes of this instrument, an Event of Default will be deemed to have occurred if: (a) the Company shall fail to pay the principal of or interest due on this Promissory Note on the due date and such non-payment shall continue for a period of five (5) days from the date due; or (b) a receiver, liquidator or trustee of the Company or of any property of the Company, shall be appointed by court order and such appointment shall remain in effect for 60 days; or the Company shall be adjudged bankrupt or insolvent; or any of the property of the Company shall be sequestered by court order and such order shall remain in effect for more than 60 days; or a petition to reorganize the Company under any bankruptcy, reorganization or insolvency law shall be filed against the Company and shall not be dismissed within 60 days after such filing; or (c) the Company shall file a petition in voluntary bankruptcy or requesting reorganization under any provision of any bankruptcy, reorganization or insolvency law or shall consent to the filing of any petition against it under any such law; or (d) the Company shall make a formal or informal assignment for the benefit of its creditors or admit in writing its inability to pay its debts generally when they become due or shall consent to the appointment of a receiver, trustee or liquidator of the Company or of all or part of the property of the Company after the date hereof. 1.02 Remedies on Default If an Event of Default shall have occurred, in addition to its rights and remedies under this Promissory Note, and any other instruments, the Holder may at its option by written notice to the Company declare all indebtedness to the Holder hereunder to be due and payable, together with all reasonable expenses of enforcement of the Holder's rights including legal fees and related disbursements, whereupon the same shall forthwith mature and become due and payable without any further notice to and without presentment, demand, protest or notice of protest, all of which are hereby waived. The Holder may proceed to protect and enforce its rights by suit in equity, action at law or other appropriate proceedings, including, without limitation action for specific performance of any agreement contained herein or in any other instrument, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any right, power or remedy granted hereby or by law, equity or otherwise. ARTICLE TWO CONVERSION PRIVILEGE The Company hereby grants to the Holder of this Promissory Note the right to convert the principal and interest on this Promissory Note into fully paid and non-assessable shares of the Company's Common Stock, $0.10 par value, at the "Conversion Price" per share. The "Conversion Price,, is defined as ten cents ($0.10). The right to convert may be exercised at any time after an Event of Default up to and including ____________, 1997. The right to convert may only be exercised with respect to the entire amount due on this Promissory Note at the exercise date. The Company will reserve 300,000 (three hundred thousand) shares of its Common Stock for the foregoing purpose. 78 2.01 Exercise Procedure (a) The Conversion privilege shall be deemed to have beenSource: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. exercised (the "Exercise Time") when the Company shall have received all of the following: (i) a properly completed Exercise Agreement in the form set out in Section 2.02 below executed by the Holder; and (ii) this Promissory Note. (b) Certificates for the underlying shares acquired shall be delivered to the purchaser within 20 days after the Exercise Time. 2.02 Exercise Agreement Upon exercise, the undersigned shall execute an agreement stating as follows: "An event of default has occurred which has not been cured and therefore the undersigned irrevocably elects to subscribe for and purchase shares of the Company's Common Stock as provided in the Promissory Note, and makes payment in full therefor by conversion. The undersigned hereby represents and warrants that the shares of Common Stock to be acquired upon exercise are being acquired for its own account, without any present intention of reoffering, reselling or distributing such Common Stock, except to the extent permitted under the Securities Act of 1993, as amended".2.03 Changes in Capital Structure (a) In the event that the outstanding shares of Common Stock of the Company are hereafter increased or decreased, or changed into or exchanged for a different number or kind of shares or other securities of the Company, or of any other corporation, by reason of reorganization, merger, consolidation, recapitalization, reclassification, stock split-up, combination of shares, or dividends payable in capital stock of the Company, appropriate adjustments shall be made by the Company in the number and kind of shares to be purchased upon exercise of this conversion right to the end that the Holder's proportionate interest shall not be altered. All such adjustments made by the Board of Directors of the Company shall be conclusive, absent manifest error. (b) Until this Promissory Note has been paid in full or the conversion privilege has been exercised, the Company will not issue any shares of its Common Stock for a price less than the then fair market value of the stock. ARTICLE THREE RESTRICTIONS ON TRANSFER The Holder, by execution of the acknowledgment at the end of this Promissory Note, acknowledges that it understands that the Company will rely upon the representations set forth herein in issuing the Promissory Note and the Underlying Shares, if any, without registration under the Securities Act of 1933, as amended, the New Jersey Uniform Securities Law, or any other state securities law. Accordingly, the Holder, by acceptance of the Promissory Note, represents and warrants that this offering is being made pursuant to the exemption from registration with the Securities and Exchange Commission ("SEC") afforded by Sections 3(b) and/or 4(2) of the Securities Act of 1933, as amended ("Act") relating to transactions by an issuer not involving any public offering. The Holder understands that the 79Company has no present intention, and is under no obligation to, register the Promissory Note or the Underlying Shares under the Act, or any applicable state law.Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. The Holder understands that due to lack of registration, the Promissory Note and the Underlying Shares will be restricted securities, that the holder must bear the economic risk of the investment for an indefinite period, that the Promissory Note and the Underlying Shares may not be sold, pledged or otherwise disposed of unless they are registered under the Act and any applicable state securities law, or an exemption from such laws is available and the Company is supplied with an opinion of counsel to the Holder, satisfactory to the Company, that registration is not required under any of such laws, and in the opinion of counsel for the Company, such sale, transfer, or pledge will not cause the Company to fail to be in compliance with the exemption provisions under which the Promissory Note or the Underlying Shares were issued. The Holder has such knowledge and experience in financial and business affairs that it is capable of evaluating the merits and risks of the prospective investment. The Holder is able to bear the economic risk of this investment. An investment in the Promissory Note and the Underlying Shares is suitable for the Holder in light of its financial position and investment objectives, with full knowledge that this investment could result in a complete loss. The Holder recognizes that the Promissory Note represents a HIGH-RISK, SPECULATIVE INVESTMENT and that there is no assurance that any return will be received thereon. The Holder can afford a total loss of this investment.The Holder is an Accredited Investor" as that term is defined in Regulation D under the Securities Act of 1933 as amended. The Promissory Note is being, and the Underlying Shares will be, purchased for the Holder's own account for investment purposes and not with a view to the resale or distribution thereof by the Holder. The Holder has reviewed the Company's Annual Report on Form 10-K for the year ended March 25, 1995; its quarterly reports on Form 10-Q for the quarters ended June 17, October 6, and December 30, 1995; its proxy statement for an annual meeting held on September 28, 1995; and all current reports on Form 8-K filed on or after March 25, 1995, including but not limited to, the Form 8-K filed on February 12, 1996. The Holder has also been informed that the proceeds of this investment shall be used for general corporate purposes, including the settlement of accrued past due liabilities due to the Company's professional advisors, suppliers of goods and corporate services, director and officer liability insurance premiums and director and officer fees and expenses. Prior to the date hereof, the Holder has had ample opportunity to ask questions of and receive answers from the officers and directors of the Company, concerning the Company, the Promissory Note and the Company's business and to obtain any additional information which was considered necessary to verify the information supplied by those individuals. The Holder understands that a restrictive legend in substantially the following form shall be placed on the certificates representing the Underlying Shares:"The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended ("Act"). Such shares have been acquired for investment and may not be publicly offered or sold in the absence of (1) an effective registration for such shares under the Act; (2) opinions of counsel to the Company and to the holder hereof and presented to the Company prior to any proposed transfer to the effect that registration is not required under the Act; or (3) a letter presented to the Company, prior to any proposed transfer, from the staff of the Securities and Exchange Commission, to the effect that it will not take enforcement action if the proposed transfer is made without registration under the Act" 80 Except as set forth in the documents which the Holder has reviewed, no representations or warranties have been made to the Holder by the Company. In Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. entering into this transaction, the Holder is not relying upon any information, other than the results of its own independent investigation. ARTICLE FOUR PIGGY-BACK REGISTRATION RIGHTS If this Promissory Note has been converted to Common Stock, and if the Company proposes to file a registration statement under the Securities Act with respect to an offering by the Company of Company Common Stock (other than a registration statement on Form S-4 or S-8 or any form substituting therefor) the Company shall in each such case give written notice of such proposed filing and the proposed method of distribution of securities covered by such proposed filing to the Holder of shares issued upon conversion of this Promissory Note at least ten (10) days before the anticipated filing date. The Company will use its best efforts to include in the registration statement proposed to be filed by the Company all shares issued upon conversion hereof and other Promissory Notes in this series with respect to which the Company has received written requests for inclusion therein prior to the anticipated filing date. Notwithstanding the foregoing, if the managing underwriter or underwriters of such offering deliver a written opinion to the holders of securities to be included therein to the effect that .the total amount of securities intended to be included in such offering would materially and adversely affect the success of such offering, then the amount of securities to be offered for the account of the participating holders shall be reduced (pro rata among the participating holders) to the extent necessary to reduce the total amount of securities to be included in such offering to the amount recommended by such managing underwriter or underwriters. The Holder shall provide the Company and any underwriters with any further documents and assurances reasonably required to effect such registration. Notwithstanding anything to the contrary herein, if the Company determines, in its business judgment, that there are business reasons to delay the effectiveness of, or to withdraw, a registration statement prior to it becoming effective under the Securities Act, the Company shall not be deemed to have breached any of its obligations hereunder. ARTICLE FIVE MISCELLANEOUS5.01 Failure or Delay Not Waiver No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude, other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.5.02 Notices Any notice herein required or permitted to be given shall be given by federal express or similar overnight courier or by same day courier service or by certified mail, return receipt requested, if to the Holder, at the address set forth on the first page hereof, or, if to the Company: Corniche Group Incorporated, Wayne Interchange Plaza 1, 145 Route 46 West, Wayne, New Jersey 07470. 815.03 Amendments The term "Promissory Note" or "this Promissory Note" and all reference thereto, as used through this instrument, shall mean this instrument as originally executed or, if later amended or supplemented, then, as so amended Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. or supplemented 5.04 Assignability This Promissory Note shall be binding on the Company, its successors and assigns, and shall inure to the benefit of the Holder, its successors and assigns. 5.05 Governing Law and Jurisdiction This Promissory Note has been executed in and shall be governed by the laws of the State of New Jersey and any proceeding brought to enforce its terms shall be brought in a federal or state court located in the State of New Jersey. 5.06 No Personal Liability No officer, director, shareholder, employee, consultant or agent of the Company shall be personally liable for repayment of this Promissory Note. IN WITNESS WHEREOF, the Company has caused this Promissory Note to be signed in its name by its duly authorized officer and its-corporate seal to be affixed hereto. CORNICHE GROUP INCORPORATED _________________________________ James J. Fyfe Director and Vice President I acknowledge the accuracy of the representations in Article Three of this Promissory Note. By:______________________________ 82Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 4 ( d ) 83NEITHER THIS WARRANT NOR THE SHARES ISSUABLE ON THE EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"); AND THIS WARRANT IS NOT TRANSFERABLE EXCEPT ON DEVOLUTION OF SUCH WARRANT BY OPERATION OF THE LAWS OF DESCENT AND DISTRIBUTION IN THE EVENT OF THE DEATH OR ADJUDICATED INCOMPETENCE OF THE HOLDER.No. WA-__________ 3-Year Warrant to purchase *60,000* shares (subject to adjustment)Dated: _____________, 1996 of common stock, $.10 par value, of Corniche Group Incorporated VOID AFTER ______________, 1999 CORNICHE GROUP INCORPORATED Non-Transferable, Redeemable Common Stock Purchase Warrant Corniche Group Incorporated (hereby called the "Company"), a Delaware corporation, hereby certifies that, for and in consideration of the sum of $1,000: ______________________________________________ (Name) ______________________________________________ (Street and No.) ______________________________________________ (City, State and Zip Code) ______________________________________________ (Social Security No. or Federal Employer ID No.) ______________________________________________ (Date of Birth)is entitled to purchase from the Company, at any time or from time to time, subsequent to the date of issuance hereof and before 3:00 P.M. New York local time on _________, 1999 (the "Exercise Period"), subject to prior redemption by the Company, an aggregate of up to 60,000 fully paid and non-assessable shares (the number or character of such shares being subject to adjustment as provided below) of the common stock, $.10 par value per share, of the Company (the "Underlying Shares") on the payment therefor of $.50 for each share of the common stock subscribed for and purchased, upon the surrender of this warrant duly signed by the registered holder hereof or assigns at the time of subscription, accompanied by payment of the total subscription price in cash or by certified check or bank draft payable to the order of the Company, upon the terms and subject to the conditions hereinafter set forth. 1. Notice of Exercise. Notice of intention to exercise any of the purchase rights evidenced by this warrant must be given during the Exercise Period by written notice addressed to the Company at its principal office or by written notice addressed to its duly designated and acting agent, if any, at least 10 days prior to any intended exercise. Such notice shall specify Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. the date on which purchase rights are to be exercised and the number of shares of the common stock to be purchased on that date. 84 2. Exercise of Warrant. On or before the date of exercise specified in such notice given during the Exercise Period, the holder shall surrender this warrant (in negotiable form, if not surrendered by the holder named above) to the principal office of the Company, or to that of its duly designated and acting agent with the exercise form attached to this warrant duly signed together with the purchase price of the common stock represented by certified or official bank check on New York Clearing House funds payable to the order of the Company, in the amount of the said purchase price. 3. Delivery of Stock Certificates on Exercise. As soon as practicable after the exercise of this warrant and payment of the purchase price, and in any event no later than 10 days thereafter, the Company or its duly designated and acting agent, if any, will cause to be issued in the name of and delivered to the holder hereof, or such holder's nominee or nominees, a certificate or certificates for the number of full shares of the common stock of the Company to which such holder shall be entitled upon such exercise. In case, between the date of such exercise and the date on which such certificate or certificates are issued, the record holder of such shares shall become entitled to any dividend or other right, the Company will forthwith pay or cause to be paid in cash to the holder hereof the amount of such dividend, or transfer to the holder hereof such right, as the case may be. No fraction of a share or scrip certificate for such fraction shall be issued upon the exercise of this warrant; in lieu thereof, the Company will pay or cause to be paid to such holder cash equal to a like fraction at the then prevailing market price for such share as determined by the Company. 4. Partial Exercise of a Warrant. In case this warrant shall be exercised for less than the full number of shares to which the holder is entitled the Company, at its expense, will issue, or will cause to be issued and delivered to the holder hereof, a new warrant or warrants of like tenor issued in said holder's name, representing the unexercised warrants. 5. Dividends in Stock, Property, Reclassifications. In case at any time or from time to time the holders of the common stock of the Company (or any other shares of stock or other securities at that time receivable upon exercise of this warrant) shall have received, or as of a record date shall have become entitled to receive other or additional or less stock or other securities or property (other than cash) without payment therefor (whether through a dividend in stock of any class of stock of the Company or any other corporation, or a dividend in any securities or property other than cash, or through stock split, spin-off, reclassification, combination, of shares or otherwise), then and in each such case the holder of this warrant upon the exercise thereof and upon the payment of the sum obtained by multiplying (a) the number of shares of the common stock of the Company called for on the face of this warrant by (b) the purchase price per share obtaining on the date of such event, as hereinabove provided, shall be entitled to receive, in lieu of the shares called for hereby, the stock or other securities of property which said holder would hold on the date of such exercise, if, from the date hereof to and including such date, he had been the holder of record of the number of shares of the common stock of the Company called for on the face of this warrant and had retained such shares and all such other or additional or less stock and other securities and property receivable in respect of such shares. In case of the partial exercise of this warrant under such circumstances, the number of shares of stock which would have been receivable upon the full exercise of this warrant, computed as provided above, shall be proportionately reduced. 6. Reorganization, Consolidations, Mergers. In case of any reorganization of the Company, or any other corporation, the stock or securities of which are at the time deliverable on the exercise of this warrant, or in case the Company or such other corporation shall consolidate Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. with or merge into another corporation, or convey all or substantially all of its assets to another corporation, the holder of this warrant, upon the exercise hereof and upon the payment of the sum obtained by multiplying (a) the number of shares of the Company called for on the face of the warrant by (b) the purchase price per share obtaining on the date of such event, as hereinabove provided, shall be entitled to receive, in lieu of the shares theretofore called for hereby, the stock or other securities or property to which such holder would have been entitled upon the consummation of such reorganization, consolidation, merger or conveyance if he had purchased the shares 85called for hereby immediately prior thereto; and in such case, the provisions of this warrant shall be applicable to the shares of stock or other securities or property thereafter deliverable upon the exercise of this warrant. In the case of the partial exercise of this warrant under such circumstances, the number of shares of stock or other securities or property which would have been receivable upon the full exercise of this warrant, and the sum payable therefor, shall be proportionately reduced. 7. Redemption Of Warrants. The unexercised portions, if any, of the warrants are redeemable at the option of the Company at a price of $.075 per Underlying Share at any time during a period of one hundred twenty days commencing on the date hereof (the "Redemption Period"). If the Company shall elect to redeem warrants as permitted by this Section 7, notice of redemption shall be given to the holders of all outstanding warrants to whom the redemption shall apply by mailing, by regular first class or certified mail or by recognized courier service, a notice of such redemption, accompanied by payment in full therefor by check or draft at the rate herein provided, to their last addresses as they shall appear upon the Company's registry books. The date of the mailing of such notice and payment shall be deemed the effective date of such redemption (the "Redemption Date") whereupon, as of the close of business on the Redemption Date, the warrants which shall have been thus redeemed shall be null, void and of no further force and effect. 8. Lost, Stolen, Destroyed or Mutilated Warrants. Upon receipt by the Company or its duly designated and acting agent, if any, of evidence satisfactory (in the exercise of reasonable discretion) to each of them of the ownership of and the loss, theft or destruction or mutilation of this or any warrant and (in the case of loss, theft or destruction) of indemnity satisfactory (in the exercise of reasonable discretion) to each of them, and (in the case of mutilation) upon the surrender and cancellation thereof, the Company or its duly designated and acting agent will issue and deliver, in lieu thereof, a new warrant of like tenor. 9. Transferability. This warrant has not been registered under the Securities Act; and is not transferable except on devolution of such warrant by operation of the laws of descent and distribution in the event of the death or adjudicated incompetence of the holder. Neither this warrant nor any shares of common stock issued by reason of the exercise thereof shall be pledged, hypothecated, made the subject of a security interest or otherwise lodged as collateral to secure or guaranty the payment or performance of any debt, indemnity, cause, claim, demand or other obligation of any kind, in furtherance of which the certificate(s) evidencing any such shares of common stock shall bear a restrictive legend reciting the proscription set forth above. 10. Piggyback Registration Rights. If at any time, or from time to time, commencing on the date of issuance hereof and ending three years after the date of issuance hereof, the Company proposes to file a registration statement with the Securities and Exchange Commission with respect to the sale of any securities of the Company, the Company will, at least thirty (30) days prior to such filing, give written notice thereof to the holders of this warrant and the holders of the Underlying Shares and if, within twenty (20) days after receipt of such notice, such holders request inclusion in such registration statement of the Underlying Shares, the Company will use its best Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. efforts to include the Underlying Shares in such registration statement. The Company will pay and bear all costs and expenses in connection with registering such Underlying Shares. 11. Miscellaneous. This warrant shall not be valid for any purpose unless signed by an authorized officer of the Company and countersigned by the duly designated and acting agent, if any. This warrant does not confer upon the holder any right to vote or to consent or to receive notice as a stockholder of the Company. 12. Headings. The headings in this warrant are for purposes of reference only, and shall not limit or otherwise affect the meaning hereof. 13. Expiration. This warrant will be wholly void and of no effect after 3 P.M., New York local time, on the expiration date set forth on the first page hereof. 86 14. Law Governing. This warrant shall be construed and enforced in accordance with and governed by the laws of the State of New Jersey. 15. Savings Clause. If any provision of this warrant, or the application of such provision to any person or circumstance, shall be held invalid, the remainder of this warrant, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby. CORNICHE GROUP INCORPORATED By_______________________________ JAMES J. FYFE, Vice PresidentATTEST:_______________________________ , Secretary 87Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 4 ( e ) 88NEITHER THIS WARRANT NOR THE SHARES ISSUABLE ON THE EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"); AND THIS WARRANT IS NOT TRANSFERABLE EXCEPT ON DEVOLUTION OF SUCH WARRANT BY OPERATION OF THE LAWS OF DESCENT AND DISTRIBUTION IN THE EVENT OF THE DEATH OR ADJUDICATED INCOMPETENCE OF THE HOLDER.No. WA-__________ 3-Year Warrant to purchase *60,000* shares (subject to adjustment)Dated: ______________, 1997 of common stock, $.10 par value, of Corniche Group Incorporated VOID AFTER ______________, 2000 CORNICHE GROUP INCORPORATED Non-Transferable, Redeemable Common Stock Purchase Warrant Corniche Group Incorporated (hereby called the "Company"), a Delaware corporation, hereby certifies that, for and in consideration of the sum of $1,000: ______________________________________________ (Name) ______________________________________________ (Street and No.) ______________________________________________ (City, State and Zip Code) ______________________________________________ (Social Security No. or Federal Employer ID No.) ______________________________________________ (Date of Birth)is entitled to purchase from the Company, at any time or from time to time, subsequent to the date of issuance hereof and before 3:00 P.M. New York local time on _____________, 2000 (the "Exercise Period"), subject to prior redemption by the Company, an aggregate of up to 60,000 fully paid and non-assessable shares (the number or character of such shares being subject to adjustment as provided below) of the common stock, $.10 par value per share, of the Company (the "Underlying Shares") on the payment therefor of $.50 for each share of the common stock subscribed for and purchased, upon the surrender of this warrant duly signed by the registered holder hereof or assigns at the time of subscription, accompanied by payment of the total subscription price in cash or by certified check or bank draft payable to the order of the Company, upon the terms and subject to the conditions hereinafter set forth. 1. Notice of Exercise. Notice of intention to exercise any of the purchase rights evidenced by this warrant must be given during the Exercise Period by written notice addressed to the Company at its principal office or Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. by written notice addressed to its duly designated and acting agent, if any, at least 10 days prior to any intended exercise. Such notice shall specify the date on which purchase rights are to be exercised and the number of shares of the common stock to be purchased on that date. 89 2. Exercise of Warrant. On or before the date of exercise specified in such notice given during the Exercise Period, the holder shall surrender this warrant (in negotiable form, if not surrendered by the holder named above) to the principal office of the Company, or to that of its duly designated and acting agent with the exercise form attached to this warrant duly signed together with the purchase price of the common stock represented by certified or official bank check on New York Clearing House funds payable to the order of the Company, in the amount of the said purchase price. 3. Delivery of Stock Certificates on Exercise. As soon as practicable after the exercise of this warrant and payment of the purchase price, and in any event no later than 10 days thereafter, the Company or its duly designated and acting agent, if any, will cause to be issued in the name of and delivered to the holder hereof, or such holder's nominee or nominees, a certificate or certificates for the number of full shares of the common stock of the Company to which such holder shall be entitled upon such exercise. In case, between the date of such exercise and the date on which such certificate or certificates are issued, the record holder of such shares shall become entitled to any dividend or other right, the Company will forthwith pay or cause to be paid in cash to the holder hereof the amount of such dividend, or transfer to the holder hereof such right, as the case may be. No fraction of a share or scrip certificate for such fraction shall be issued upon the exercise of this warrant; in lieu thereof, the Company will pay or cause to be paid to such holder cash equal to a like fraction at the then prevailing market price for such share as determined by the Company. 4. Partial Exercise of a Warrant. In case this warrant shall be exercised for less than the full number of shares to which the holder is entitled the Company, at its expense, will issue, or will cause to be issued and delivered to the holder hereof, a new warrant or warrants of like tenor issued in said holder's name, representing the unexercised warrants. 5. Dividends in Stock, Property, Reclassifications. In case at any time or from time to time the holders of the common stock of the Company (or any other shares of stock or other securities at that time receivable upon exercise of this warrant) shall have received, or as of a record date shall have become entitled to receive other or additional or less stock or other securities or property (other than cash) without payment therefor (whether through a dividend in stock of any class of stock of the Company or any other corporation, or a dividend in any securities or property other than cash, or through stock split, spin-off, reclassification, combination, of shares or otherwise), then and in each such case the holder of this warrant upon the exercise thereof and upon the payment of the sum obtained by multiplying (a) the number of shares of the common stock of the Company called for on the face of this warrant by (b) the purchase price per share obtaining on the date of such event, as hereinabove provided, shall be entitled to receive, in lieu of the shares called for hereby, the stock or other securities of property which said holder would hold on the date of such exercise, if, from the date hereof to and including such date, he had been the holder of record of the number of shares of the common stock of the Company called for on the face of this warrant and had retained such shares and all such other or additional or less stock and other securities and property receivable in respect of such shares. In case of the partial exercise of this warrant under such circumstances, the number of shares of stock which would have been receivable upon the full exercise of this warrant, computed as provided above, shall be proportionately reduced. 6. Reorganization, Consolidations, Mergers. In case of any reorganization of the Company, or any other corporation, the stock or securities of which are at the time deliverable on the exercise of this Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. warrant, or in case the Company or such other corporation shall consolidate with or merge into another corporation, or convey all or substantially all of its assets to another corporation, the holder of this warrant, upon the exercise hereof and upon the payment of the sum obtained by multiplying (a) the number of shares of the Company called for on the face of the warrant by (b) the purchase price per share obtaining on the date of such event, as hereinabove provided, shall be entitled to receive, in lieu of the shares theretofore called for hereby, the stock or other securities or property to which such holder would have been entitled upon the consummation of such reorganization, consolidation, merger or conveyance if he had purchased the shares 90called for hereby immediately prior thereto; and in such case, the provisions of this warrant shall be applicable to the shares of stock or other securities or property thereafter deliverable upon the exercise of this warrant. In the case of the partial exercise of this warrant under such circumstances, the number of shares of stock or other securities or property which would have been receivable upon the full exercise of this warrant, and the sum payable therefor, shall be proportionately reduced. 7. Redemption Of Warrants. The unexercised portions, if any, of the warrants are redeemable at the option of the Company at a price of $.075 per Underlying Share at any time during a period of one hundred twenty days commencing on the date hereof (the "Redemption Period"). If the Company shall elect to redeem warrants as permitted by this Section 7, notice of redemption shall be given to the holders of all outstanding warrants to whom the redemption shall apply by mailing, by regular first class or certified mail or by recognized courier service, a notice of such redemption, accompanied by payment in full therefor by check or draft at the rate herein provided, to their last addresses as they shall appear upon the Company's registry books. The date of the mailing of such notice and payment shall be deemed the effective date of such redemption (the "Redemption Date") whereupon, as of the close of business on the Redemption Date, the warrants which shall have been thus redeemed shall be null, void and of no further force and effect. 8. Lost, Stolen, Destroyed or Mutilated Warrants. Upon receipt by the Company or its duly designated and acting agent, if any, of evidence satisfactory (in the exercise of reasonable discretion) to each of them of the ownership of and the loss, theft or destruction or mutilation of this or any warrant and (in the case of loss, theft or destruction) of indemnity satisfactory (in the exercise of reasonable discretion) to each of them, and (in the case of mutilation) upon the surrender and cancellation thereof, the Company or its duly designated and acting agent will issue and deliver, in lieu thereof, a new warrant of like tenor. 9. Transferability. This warrant has not been registered under the Securities Act; and is not transferable except on devolution of such warrant by operation of the laws of descent and distribution in the event of the death or adjudicated incompetence of the holder. Neither this warrant nor any shares of common stock issued by reason of the exercise thereof shall be pledged, hypothecated, made the subject of a security interest or otherwise lodged as collateral to secure or guaranty the payment or performance of any debt, indemnity, cause, claim, demand or other obligation of any kind, in furtherance of which the certificate(s) evidencing any such shares of common stock shall bear a restrictive legend reciting the proscription set forth above. 10. Piggyback Registration Rights. If at any time, or from time to time, commencing on the date of issuance hereof and ending three years after the date of issuance hereof, the Company proposes to file a registration statement with the Securities and Exchange Commission with respect to the sale of any securities of the Company, the Company will, at least thirty (30) days prior to such filing, give written notice thereof to the holders of this warrant and the holders of the Underlying Shares and if, within twenty (20) days after receipt of such notice, such holders request inclusion in such Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. registration statement of the Underlying Shares, the Company will use its best efforts to include the Underlying Shares in such registration statement. The Company will pay and bear all costs and expenses in connection with registering such Underlying Shares. 11. Miscellaneous. This warrant shall not be valid for any purpose unless signed by an authorized officer of the Company and countersigned by the duly designated and acting agent, if any. This warrant does not confer upon the holder any right to vote or to consent or to receive notice as a stockholder of the Company. 12. Headings. The headings in this warrant are for purposes of reference only, and shall not limit or otherwise affect the meaning hereof. 13. Expiration. This warrant will be wholly void and of no effect after 3 P.M., New York local time, on the expiration date set forth on the first page hereof. 91 14. Law Governing. This warrant shall be construed and enforced in accordance with and governed by the laws of the State of New Jersey. 15. Savings Clause. If any provision of this warrant, or the application of such provision to any person or circumstance, shall be held invalid, the remainder of this warrant, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby. CORNICHE GROUP INCORPORATED By_____________________________ JAMES J. FYFE, Vice President 92Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 10 ( m ) 93 STOCK PURCHASE AGREEMENT THIS AGREEMENT, entered into as of January 30, 1997, by and among: The Governor and Company of The Bank of Scotland (the "Bank") Those persons named in Schedule A annexed hereto (collectively, jointly and severally "Buyers") and Corniche Group Incorporated a Delaware corporation (the "Company")Whereas: A. Pursuant to an agreement dated February 21, 1996, Susan A. Crisp has pledged 219,450 shares, $.01 par value per share, of the issued and outstanding common stock of the Company (the "Shares") to the Bank in order to secure certain obligations to the Bank. B. Pursuant to an agreement dated February 19, 1996, Brian J. Baylis has pledged 877,800 Shares to the Bank in order to secure certain obligations to the Bank. C. Buyers desire to purchase 1,042,250 of the pledged Shares (the "Sale Shares"). D. The Bank is willing to exercise its rights as pledgee of the Shares to sell all right, title and interest of Ms. Crisp and Mr. Baylis in the Sale Shares to the Buyers.Now, Therefore, for the mutual consideration set out herein, the parties agree as follows:1. Purchase And Sale Of Company Shares 1.1 The Bank shall sell to Buyers and Buyers shall purchase from the Bank, in the respective amounts set forth in Schedule A, all of the right, title and interest of Ms. Crisp and Mr. Baylis in and to the Sale Shares at a closing of such sale (the "Closing") to be held at the place and on the date hereinafter provided (the "Closing Date"). 1.2 The purchase price (the "Price") shall be $.12 per Sale Share or $125,070 on an aggregated basis. 1.3 The Price shall be paid at the Closing to the Bank by wire transfer of immediately available funds to an account in London or Edinburgh designated by the Bank. 1.4 At the Closing Date, the Bank will deliver the certificates purportedly representing the Sale Shares which were delivered to the Bank by Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Crisp and Baylis and purportedly represent the Sale Shares. Such certificates shall be accompanied by stock powers executed by Baylis and Crisp indicating appropriate signature guarantees. Since the number of Shares purportedly represented by such certificates exceeds the number of Sale Shares, the Bank and the Buyers shall make reasonable arrangements to cause certificates 94representing the excess number of Shares to be issued in the names of Brian J. Baylis (44,000 Shares) and Susan A. Crisp (11,000 Shares) and delivered to the Bank. The Company has advised the Bank and the Buyers that: (a) the Sale Shares are not registered under the Securities Act of 1933 as amended (the "'33 Act"); (b) the Sale Shares are subject to usual and appropriate stop transfer orders on the books and records of the Company's transfer agent pertaining to securities not registered under the '33 Act; (c) the certificates for the Sale Shares delivered by the Bank bear and all new certificates for the Sale Shares to be delivered to Buyers shall bear on their face the following restrictive legend: "No sale, offer to sell or transfer of the shares represented by this certificate shall be made unless a registration statement under the Federal Securities Act of 1933, as amended, with respect to such shares is then in effect or an exemption from the registration requirements of such Act is then in fact applicable to such shares."2. Representations And Covenants Of Bank The Bank hereby represents and warrants, to the extent of the facts known to the Bank, that, effective this date and the Closing Date, the representations listed below are true and correct except to the extent specifically set forth in a schedule annexed hereto and numbered in accordance with the subsection number in which the relevant representation is made. 2.1 The certificates purportedly representing the Sale Shares are the certificates heretofore delivered by Crisp and Baylis to the Bank pursuant to the Pledge Agreements between the Bank and each of Crisp and Baylis. 2.2 The execution of this Agreement will not violate or breach any agreement, contract, or commitment to which the Bank is a party, the Bank has been duly authorized by all appropriate and necessary action to enter into and perform this Agreement, and this Agreement is fully enforceable against the Bank under English law. 2.3 The Bank will have no claim or lien on the Sale Shares upon payment of the Price indefeasibly and in full. 2.4 The representations and warranties of the Bank contained in this Section 2 shall survive the Closing Date. The Bank makes no other representation or warranty of any nature whatsoever. The Buyers have agreed to purchase the Sale Shares without recourse to the Bank and, insofar as the Bank is concerned, the Sale Shares will be sold "AS IS AND WHERE IS" and without representation or warranty (including any representation or warranty as to condition, value or any other matter concerning the Sale Shares or the Company, including the suitability of the Sale Shares as an investment). Without limiting the foregoing, the Bank has no basis to believe that the Sale Shares have a value equal to the Price, and the Sale Shares' value could be less than the Price and the Sale Shares could have no value.3. Representations and Covenants of the Company The Company hereby represents and warrants, to the extent of the facts known to the Company, that, effective this date and the Closing Date, the representations listed below are true and correct except to the extent Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. specifically set forth in a schedule annexed hereto and numbered in accordance with the subsection number in which the relevant representation is made. 3.1 A copy of the audited financial statements of the Company dated March 25, 1995 and the unaudited financial statements of the Company dated December 31, 1995 and September 30, 1996 (collectively the "Financial Statements") are attached hereto as Schedule 3.1. Except as noted therein, the Financial Statements fairly present the financial position of the Company for the periods indicated in conformity 95with generally accepted accounting principles consistently applied for such periods. Except as disclosed in Schedule 3.1 there has not been and will not be, prior to the Closing Date, any material changes in the financial position of the Company as reflected in the Financial Statements. 3.2 The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own or lease and operate its properties and to carry on its business as presently conducted. The Company is duly qualified as a foreign corporation, and is in good standing, in each jurisdiction listed on the Schedule 3.2 attached hereto, and in each other jurisdiction where the character of its properties owned or held under lease require it to be so qualified. Attached to Schedule 3.2 is a complete and correct copy of the Company's Certificate of Incorporation, as amended to date, certified by the Secretary of the State of Delaware, and the Company's By-Laws, as currently in effect. This Agreement has been duly executed and delivered on behalf of the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to general equitable principles and except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application relating to creditors' rights. 3.3 The authorized capital stock of the Company consists of 30,000,000 shares of Common Stock, $.01 par value per share, of which 2,405,357 shares are issued and outstanding, 1,097,250 of which are owned of record and beneficially by Crisp and Baylis and were pledged to the Bank to secure certain obligations. The Company has further authorized capital stock consisting of 1,000,000 shares of 7% cumulative convertible preferred stock, of which 946,069 shares are issued and outstanding.. All outstanding shares have been duly authorized and validly issued, are fully paid and non-assessable and were not issued in violation of any preemptive rights. There is outstanding no security, option, warrant, right, call, subscription, agreement, commitment or understanding of any nature whatsoever, fixed or contingent, that directly or indirectly (i) calls for the issuance, sale, pledge or other disposition of any shares or of any other capital stock of the Company or any securities convertible into, or other rights to acquire, any such shares or other capital stock of the Company or (ii) obligates the Company to grant, offer or enter into any of the foregoing or (iii) relates to the voting or control of such shares, capital stock, securities or rights except as disclosed in Schedule 3.3 attached hereto. No person has any right to require the Company to register any of its securities under the '33 Act, except as disclosed in Schedule 3.3 attached hereto. 3.4 Except as set forth in Schedule 3.4 attached hereto, the Company is not involved in any pending litigation or governmental investigation or proceeding and, to the best knowledge of the Company, no litigation, claims, assessments, or governmental investigation or proceeding is threatened against the Company, or its assets. 3.5 The Company has good and marketable title to all of the assets and properties which it purports to own and which are reflected on the Financial Statements contained in Schedule 3.1 hereof, free and clear of all encumbrances, except for (a) liens for current taxes not yet due and payable or for taxes the validity of which is being contested in good faith by Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. appropriate proceedings, and (b) encumbrances which individually or in the aggregate do not materially and adversely affect the business, operations or financial condition of the Company. 3.6 The Company has no debts, obligations or liabilities of whatever kind or nature, either direct or indirect, absolute or contingent, matured or unmatured, except debts, obligations and liabilities that are fully reflected in, or reserved against on, the Financial Statements contained in Schedule 3.1 hereof. 3.7 Except as set forth in Schedule 3.7 attached hereto, or except as otherwise contemplated by this Agreement, since the date of the Financial Statements contained in Schedule 3.1 there has not been (a) any damage, destruction or casualty loss to the physical properties of the Company (whether covered by insurance or not); (b) any material change in the business, operations or financial condition of the Company; (c) any entry into any transaction, commitment or agreement including without limitation any borrowing or capital expenditure) material to the Company's course of business; (d) any redemption or other acquisition by the Company of the Company's capital stock or any declaration, setting aside or payment of any dividend or other distribution in cash, stock or property with respect to the Company's capital stock; (e) any increase 96 in the rate or terms of compensation payable or to become payable by the Company to its directors, officers or employees or any increase in the rate or terms of any bonus, pension, insurance or other employee benefit plan, payment or arrangement made to, for or with any such directors, officers or key employees; (f) any change in production schedules, acceleration of sales, or reduction of aggregate administrative, marketing, advertising and promotional expenses or research and development expenditures other than in the ordinary course of business; (g) any sale, transfer or other disposition of any asset of the Company to any party except for payment of third-party obligations incurred in the ordinary course of business in accordance with the Company's regular payment practices; (h) any termination or waiver of any rights of value to the business of the Company; or (i) any failure by the Company to pay its accounts payable or other obligations in the ordinary course of business consistent with past practice. 3.8 Except as otherwise disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended March 25, 1995, the Company has complied with all state, federal and local laws in connection with its formation, issuance of securities, organization, capitalization and operations, and no contingent liabilities have been threatened or claims made, and no basis for the same exists with respect to said operations, formations or capitalization, including claims for violation of any state or federal securities laws, except that the Company is delinquent in its filings with the Securities and Exchange Commission as set forth in Schedule 3.8 hereof. 3.9 Except as otherwise disclosed in Schedule 3.9 hereof, the Company has filed and as of the Closing Date will have filed, all state, federal, and local tax or related returns and reports due or required to be filed and has paid and as of the Closing Date will have paid, all taxes or assessments which have become due. 3.10 The Company has no subsidiary corporations other than as disclosed in Schedule 3.10 attached hereto. 3.11 The execution of this Agreement will not violate or breach any agreement, contract, or commitment to which the Company is a party and has been duly authorized by all appropriate and necessary action. 3.12 The Company is registered under Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange Act") and its common stock is listed for quotation by the OTC Bulletin Board.Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 4. REPRESENTATIONS AND COVENANTS OF BUYERS EACH OF THE BUYERS HEREBY REPRESENTS AND WARRANTS THAT, EFFECTIVE THIS DATE AND THE CLOSING DATE, THE REPRESENTATIONS LISTED BELOW ARE TRUE AND CORRECT. 4.1 BUYER HAS MADE ALL REASONABLE INQUIRIES WITH RESPECT TO THE COMPANY AND THE SALE SHARES AND IS FULLY AWARE OF THE CONDITION AND PROSPECTS, FINANCIAL AND OTHERWISE, OF THE COMPANY, HAVING BEEN SUPPLIED WITH SUCH FINANCIAL AND OTHER DATA RELATING TO THE COMPANY AS BUYER CONSIDERED NECESSARY AND ADVISABLE TO ENABLE BUYER TO FORM A DECISION CONCERNING THE PURCHASE HEREIN PROVIDED. 4.2 BUYER IS FULLY AWARE THAT THE SALE SHARES, WHEN DELIVERED, WILL NOT HAVE BEEN REGISTERED UNDER THE ACT; THAT ACCORDINGLY NO SALE, OFFER TO SELL OR TRANSFER OF THE SALE SHARES SHALL BE MADE BY BUYER UNLESS A REGISTRATION STATEMENT UNDER THE '33 ACT WITH RESPECT TO THE SALE SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE '33 ACT IS THEN IN FACT APPLICABLE TO THE SALE SHARES OR, IN THE OPINION OF COMPANY'S COUNSEL, REGISTRATION IS NOT REQUIRED. 4.3 BUYER HAS BEEN FULLY ADVISED BY THE BANK THAT THE BANK WILL SELL THE SALE SHARES TO BUYER WITHOUT REGISTRATION UNDER THE '33 ACT ON THE BASIS OF A STATUTORY EXEMPTION IN SECTION 4 OF THE '33 ACT AND THAT THE BANK'S RELIANCE UPON THE STATUTORY EXEMPTION IS BASED IN LARGE PART UPON BUYER'S REPRESENTATIONS MADE IN THIS AGREEMENT. 97 4.4 BUYER IS ACQUIRING THE SALE SHARES FOR INVESTMENT FOR BUYER'S OWN ACCOUNT AND NOT WITH A VIEW TO RESELL OR OTHERWISE DISTRIBUTE THE SALE SHARES. IN MAKING THE FOREGOING REPRESENTATIONS, BUYER UNDERSTANDS THAT, IN THE VIEW OF THE SECURITIES AND EXCHANGE COMMISSION, THE STATUTORY EXEMPTION UNDER SECTION 4 OF THE '33 ACT WOULD NOT BE AVAILABLE IF, NOTWITHSTANDING BUYER'S REPRESENTATIONS, BUYER HAD IN MIND MERELY ACQUIRING THE SALE SHARES FOR RESALE UPON THE OCCURRENCE OR NONOCCURRENCE OF SOME PREDETERMINED EVENT. 4.5 BUYER HAS THE FULL RIGHT, POWER AND AUTHORITY TO PURCHASE THE SALE SHARES IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AND OTHERWISE TO CONSUMMATE AND CLOSE THE TRANSACTION PROVIDED FOR IN THIS AGREEMENT IN THE MANNER AND UPON THE TERMS HEREIN SPECIFIED. 4.6 EACH BUYER LISTED ON SCHEDULE A ATTACHED HERETO IS ACTING INDEPENDENTLY OF EACH OTHER BUYER AND NONE OF THEM ARE ACTING JOINTLY OR IN CONCERT FOR THE PURPOSE OF ACQUIRING OF THE SALE SHARES. ALL SUCH BUYERS HAVE ACTED IN THE PREMISES THROUGH A BROKER-DEALER, ROBERT M. COHEN & CO., INC. ("RMCC") ACTING ON THEIR BEHALF. THE BANK HAS NO LIABILITY TO RMCC FOR COMMISSIONS, FINDERS FEES, OR OTHERWISE IN CONNECTION WITH RMCC'S PARTICIPATION IN THIS TRANSACTION. FOLLOWING SUCH PURCHASE OF THE SALE SHARES, EACH BUYER WILL CONTINUE TO ACT INDEPENDENTLY, ONE FROM THE OTHER, AND WILL NOWISE ACT JOINTLY OR IN CONCERT IN THE VOTING, PLEDGING, SALE OR OTHER ACTIVITY OF ANY KIND RELATING TO THE SALE SHARES. 4.7 BUYER IS A SOPHISTICATED BUYER WITH RESPECT TO THE PURCHASE OF THE SALE SHARES AND HAS ADEQUATE INFORMATION CONCERNING THE BUSINESS AND FINANCIAL CONDITION OF THE COMPANY TO MAKE AN INFORMED DECISION REGARDING THE PURCHASE OF THE SALE SHARES AND HAS INDEPENDENTLY AND WITHOUT RELIANCE UPON THE BANK AND BASED ON SUCH INFORMATION BUYER HAS DEEMED APPROPRIATE, MADE HIS OWN ANALYSIS AND DECISION TO ENTER INTO THIS AGREEMENT, EXCEPT THAT BUYER HAS RELIED UPON THE REPRESENTATIONS, WARRANTIES, AGREEMENTS AND COVENANTS OF THE COMPANY CONTAINED IN THIS AGREEMENT. 4.8 BUYER ACKNOWLEDGES AND AGREES TO THE BANK'S REPRESENTATIONS AND STATEMENTS CONTAINED IN THE PARAGRAPH FOLLOWING SECTION 2.4 OF THIS AGREEMENT. BUYER IS NOT RELYING ON ANY REPRESENTATIONS OF THE BANK, EXCEPT AS EXPRESSLY PROVIDED IN SECTION 2. BUYER UNDERSTANDS THAT IT MAY LOSE ITS Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ENTIRE INVESTMENT AND REPRESENTS THAT IT IS ECONOMICALLY ABLE TO SUSTAIN SUCH LOSS. BUYER REPRESENTS THAT IT HAS HAD ADEQUATE OPPORTUNITY TO CONSULT WITH COUNSEL AND OTHER SOPHISTICATED ADVISORS IN CONNECTION WITH THE PURCHASE OF THE SALE SHARES. THE REPRESENTATIONS AND WARRANTIES OF BUYER CONTAINED IN THIS SECTION 4 SHALL SURVIVE THE CLOSING DATE.5. Closing Date The Closing Date herein referred to shall be upon such date as the parties hereto may mutually agree upon. At the Closing, Buyers will be provided with and accept delivery of the Sale Shares, and in connection therewith, will make payment of all sums due to the Bank. Certain closing documents may be delivered subsequent to the Closing Date upon the mutual agreement of the parties hereto. In the event the Closing Date has not occurred on or prior to January 31, 1997, each party to this Agreement will have the right to terminated this Agreement at any time thereafter upon written notice to the other parties and thereafter no party to this Agreement will have any liability or obligation to any other party to this Agreement.6. Conditions Precedent To The Obligations Of The Bank All obligations of the Bank under this Agreement are subject to the fulfillment, prior to or at the closing on the Closing Date, of each of the following conditions: 98 6.1 The representations and warranties by Buyers and the Company contained in this Agreement shall be true in all material respects at and as of the time of Closing as though such representations and warranties were made at and as of such time. 6.2 Buyers and the Company shall have performed and complied with all covenants, agreements, and conditions required by this Agreement to be performed or complied with by Buyers and the Company prior to or at the Closing including the payment of the Price by Buyers in accordance with the terms hereof, including the allocations set forth on Schedule A hereto.7. Conditions Precedent To The Obligations Of Buyer All obligations of Buyers under this Agreement are subject to the fulfillment, prior to or at the Closing on the Closing Date, of each of the following conditions: 7.1 The representations and warranties by the Bank and the Company contained in this Agreement shall be true at and as of the time of Closing as though such representations and warranties were made at and as of such time. 7.2 The Company and the Bank shall have performed and complied with all covenants, agreements, and conditions required by this Agreement to be performed or complied with by them prior to or at the Closing.8. Documents At Closing At the Closing, the following transactions shall occur, all of such transactions being deemed to occur simultaneously: 8.1 The Bank will deliver the certificates and stock powers referred to in Section 1.4 hereof. 8.2 The Company will deliver, or cause to be delivered, to Buyers the Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. following: a.a copy of the most recent shareholder list of the Company in the Company's possession certifying the number of shares outstanding. In the event additional shares of the Company have been issued since the date of such shareholder list, such issuances will be identified on a schedule attached to the shareholder list. b.such other instruments, documents and certificates, if any, as are required to be delivered pursuant to the provisions of this Agreement or which may be reasonably requested in furtherance of the provisions of this Agreement; 8.3 Buyer will deliver or cause to be delivered to the Bank: a.the Price. b.such other instruments and documents as are required to be delivered pursuant to the provisions of this Agreement or which may be reasonably requested in furtherance of the provisions of this Agreement. 8.4 The Company will deliver or cause to be delivered to the Bank and the Company's transfer agent, Continental Stock Transfer & Trust Company, an opinion of counsel to the effect that the sale of the Sale Shares by the Bank to the Buyers will be exempt from the registration requirements of the '33 Act. 999. Miscellaneous 9.1 Further Assurances. At any time, and from time to time, after the effective date, each party will execute such additional instruments and take such action as may be reasonably requested by the other party to carry out the intent and purposes of this Agreement. 9.2 Waiver. Any failure on the part of any party hereto to comply with any of its obligations, agreements or conditions hereunder may be waived in writing by the party to whom such compliance is owed. 9.3 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been given if delivered in person or sent by prepaid first class registered or certified mail, return receipt requested, fax or recognized courier to the following addresses: To the Bank: The Governor and Company of the Bank of Scotland The Mound Edinburg, Scotland Attention: Legal Services With copies to: Sullivan & Worcester LLP 767 Third Avenue New York, NY 10017 Attention: Paul R. Wiener, Esq. Telephone: 212-486-8200 Fax: 212-758-2151 To the Company: Corniche Group Incorporated a Delaware corporation Wayne Interchange Plaza I 145 Route 46 West Wayne, NJ 07974 To Buyer:Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. See Schedule A With copies to: The Law Offices of John L. Milling 115 River Road, Bldg. 12 Edgewater, NJ 07020 Telephone: 201-313-1600 Fax: 201-313-7249 9.4 Headings. The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 9.5 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 9.6 Governing Law a. With respect to any suit, action, or proceedings relating to this Agreement, each party irrevocably submits to the exclusive jurisdiction of the English courts. This Agreement shall be governed by English law. 100 b. Each party waives any objection which it may have at any time to the laying of venue of any proceedings in any such count, waives any claim that such proceedings have been brought in an inconvenient forum and further waives the right to object with respect to such proceedings, that such court does not have jurisdiction over such party. 9.7 Binding Effect. This Agreement shall be binding upon the parties hereto and inure to the benefit of the parties, their respective heirs, administrators, executors, successors and assigns. 9.8 Entire Agreement. This Agreement is the entire agreement of the parties covering everything agreed upon or understood in the transaction. There are no oral promises, conditions, representations, understandings, interpretations or terms of any kind as conditions or inducements to the execution hereof. 9.9 Severability. If any part of this Agreement is deemed to be unenforceable the balance of this Agreement shall remain in full force and effect. In Witness Whereof, the parties have executed this Agreement as of the day and year first above written. THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND By /s/ John Kelly CORNICHE GROUP INCORPORATED By /s/ James F. Fyfe JAMES FYFE, Vice President BUYERS /s/ David Abrams /s/ Anthony J. Blazej /s/ Ethel Blazej/AIB /s/ Betty Charlson Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. /s/ Dr. Lawrence R. Gluck /s/ Robert Gmuer /s/ Lou Hammer /s/ Danny Jacobson & Estelle Jacobson, JTWROS /s/ Jeff Klein /s/ Steve Miner /s/ Wilfred Saint Jr. /s/ Mary S. Saint Sutton West Realty Pension Plan By /s/ Steve Wacher - Trustee 101 Schedule A - List of Buyers Buyer Number of Shares to be Purchased Lou Hammer 120,000 2 Cranberry Street Parsipanny, NJ 07054 Steve Miner 120,000 193 Steele Road West Hartford, CT 06119 Jeff Klein 50,000 52 Greenlawn Road Clifton, NJ 07013 Wilfred Saint & Mary Sue Saint 50,000 14325 Shoreham Drive Silver Spring, MD 20905 Robert Gmuer 100,000 3137 Holl Avenue Bronx, NY 10467 Betty Chalson 100,000 53 Normandy B Delray Beach, FL 33484 Ethel Blazej 50,000 62 Green Drive Toms River, NJ 08755 Anthony Blazej 100,000 70 Lakeview Avenue New Canaan, CT 06840 Danny & Estelle Jacobsen, JTWROS 100,000 17268 Hampton Blvd. Boca Raton, FL 33496 Dave Abrams 50,000 35 E Cheryl Road Pine Brook, NJ 07058 Larry Gluck 100,000 220 Currier Drive Orange, CT 06477Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Sutton West Realty Inc. Pension Plan 102,250 Steve Wacher - Trustee 100 E. 64th Street, Suite 270 New York, NY 10021 _________ Total Shares to be Purchased 1,042,250 102 SCHEDULE 3.1 3.1.1 MARCH 25, 1995 AUDITED FINANCIAL STATEMENT (1) 3.1.2 DECEMBER 31, 1995 UNAUDITED FINANCIAL STATEMENTS (2) 3.1.3 SEPTEMBER 30, 1996 UNAUDITED FINANCIAL STATEMENTS________________ (1) Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended March 25, 1995 filed with the Securities and Exchange Commission. (2) Incorporated by reference to the Company's Current Report on Form 10-Q for the quarter ended December 31, 1995 filed with the Securities and Exchange Commission. 103 SCHEDULE 3.1.3 SEPTEMBER 30, 1996 UNAUDITED FINANCIAL STATEMENTS 104 CORNICHE CROUP INCORPORATED Balance Sheet (Unaudited) ASSETS September 30, March 31, 1996 1996 Current assets: Cash $398 $66 Notes receivable 0 125,000 Other receivables 0 10,000 Total current assets 398 135,066Other assets: Property and equipment, net 941 1,135Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Total assets $1,339 $136,201LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITYCurrent liabilities: Notes Payable $86,679 $11,679 Note Payable on debt compromise 77,630 77,630 Trade account payable 260,484 358,760 Dividends payable - preferred stock 122,565 89,453 Accrued liabilities 223,121 258,622 Total current liabilities 770,479 796,144Stockholders' (deficiency) equity: 7% cumulative convertible preferred stock authorized and issued 1,000,000 shares, and outstanding 946,069 shares 946,069 946,069 Common stock, $0.10 par value, authorized - 30,000,000 shares, issued 2,623,457 262,345 262,345 Additional paid-in capital 793,976 793,976 (Accumulated deficit) retained earnings (2,566,820) (2,457,623) ( 564,430) ( 455,233)Treasury stock-at cost, 218,100 shares. ( 204,710) ( 204,710) Total stockholders' (deficiency) equity ( 769,140) ( 659,943) Total liabilities and stockholders' (deficiency) equity $1,339 $136,201 105 CORNICHE CROUP INCORPORATED Statement of Operations (UNAUDITED) -- 3 Months Ended -- -- 6 Months Ended -- Sept 30, Sept 30, Sept 30, Sept 30, 1996 1995 1996 1995 Net sales $ 0 $ 0 $ 0 $ 0 Cost of sales 0 0 0 0 - - - -Gross profit 0 0 0 0 - - - - General & administrative expenses (37,610) (183,503) (71,860) (271,201) ----------- ----------- --------- ------------Operating loss (37,610) (183,503) (71,860) (271,201) Interest (net) ( 2,425) 8,329 ( 4,225) 8,329 ------------ ---------- ------------ ---------Net loss before Preferred Dividends (40,035) (175,174) (76,085) (262,872) Preferred dividends (16,556) ( 20,377) (33,112) ( 35,660) ----------- ----------- ---------- -----------Net loss $ (56,591) $(195,551) $(109,197) $(298,532)Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Loss per share of common stock $(0.02) $(0.73) $(0.05) $(1.39)Weighted average Number of common shares outstanding 2,405,357 2,298,136 2,405,357 2,195,336 106 CORNICHE GROUP INCORPORATED AND SUBSIDIARY Consolidated Statement of Cash Flows (Unaudited) ------ 6 Months Ended ------ Sept 30, Sept 30, 1996 1995 Cash flows from operations: Net loss $(109,197) $(298,532)Adjusted to reconcile net loss to net cash used in operations activities: Depreciation 194 858Changes in assets and liabilities: (Inc)/Dec in notes receivable 125,000 0 (Inc)/Dec in other receivables 10,000 ( 66,465) (Inc)/Dec in prepaid expenses 0 ( 64,124) (Inc)/Dec in accounts payable ( 98,276) 271,241 (Inc)/Dec in accrued liabilities ( 35,501) (266,038) (Inc)/Dec in notes payable 75,000 ( 4,613) Increase in dividends payable 33,112 35,660 Advances to subsidiary 0 (441,800) ------------- --------------Net cash used in operations 322 (833,813) ------------- --------------Cash flows from investing activities: Payments to acquired fixed assets 0 ( 8,926) - -------------Net cash used in investing activities 0 ( 8,926) - -------------Cash flows from financing activities: Issuance of common stock for cash 0 794,336 Issuance of common stock for settlement of liabilities 0 50,000 - -----------Net cash provided by financing activities 0 844,336 - -----------Net increase in cash 322 1,597Cash at beginning of period 66 100 --- ------Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. --- ------Cash at end of period $398 $1,697 ==== ====== 107 SCHEDULE 3.2The Company is qualified to do business and is in good standing in the State of New Jersey. A copy of the Company's Certificate of Incorporation, as amended, and a copy of the Company's By-Laws, as amended, are incorporated by reference to the Company's Annual Report on Form 10-K for the year ended March 31, 1996 (Exhibit 3(j)) and by reference to the Company's registration statement on Form S-1 (File No. 33-42154) (Exhibit 3.10), respectively, as filed with the Securities and Exchange Commission. 108 SCHEDULE 3.3 OUTSTANDING STOCK OPTIONS AND WARRANTSWARRANTSIssue Date Exercise Price # of Shares Expiration $ Date February 1991 36.00 48,867 1/98September 1993 46.40 9,375 4/99March 1995 3.20 - 8.10 91,933 1/99 - 11/031986 Stock Option PlanIssue Date Exercise Price # of Shares Expiration $ Date August 1992 32.50 18,0001992 Stock Option PlanIssue Date Exercise Price # of Shares Expiration $ Date May 1996 .18 1,500 2001Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 109 SCHEDULE 3.4 Pending Litigation, Governmental Investigations, Etc.1. There are no outstanding legal proceedings. All matters referred to in theCompany's December 30, 1995 Report on Form 10-Q have been settled.2. The IRS is currently conducting an audit of the Company's books and recordsfor the fiscal year ended September 30, 1993, with regard to the Company's then wholly-owned subsidiary, Fidelity Medical Inc. 110 SCHEDULE 3.73.7 (i)Since the receivership proceedings in February 1996 involving the Company's UK subsidiaries, the Company has not been able to settle its liabilities in a timely fashion. Accordingly, the liabilities included in the Company's most recent financial statements are considerably past due. 111 SCHEDULE 3.8Delinquent SEC FilingsThe Company is delinquent in its filing of the following reports with the SEC:1. Annual Report on Form 10-K for the fiscal year ended March 31, 1996.2. Quarterly Report on Form 10-Q for the quarter ended June 30, 1996.3. Quarterly Report on Form 10-Q for the quarter ended September 30, 1996. 112 SCHEDULE 3.9 Delinquent Federal, State and Local Tax ReturnsThe Company is delinquent in the filing of Federal and State tax returns for the fiscal years ended September 30, 1994 and September 30, 1995. 113Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. SCHEDULE 3.10SubsidiariesThrough February 1996 the following UK corporations were wholly-owned subsidiaries of the Company: Corniche Distribution Limited ("CDL") The Stationery Company Limited (owned by CDL) Chessbourne International Limited (owned by CDL)All of the foregoing corporations are in receivership in the UK and have either been liquidated or will be liquidated shortly. The Company has not received and will not receive cash or any other assets or items of value in connection with these liquidations. 114Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT 10(n) 115 MUTUAL RELEASEKNOW ALL MEN BY THESE PRESENTS: That Whereas: A. Corniche Group Incorporated, a Delaware corporation ("CGI") borrowed UK£50,000 from The Bank of Scotland (the "Bank") and in consideration therefor issued to the Bank CGI's promissory note dated in February 1996 (the "Note") providing for, among other things, maturity in August 1996 and an annual rate of interest calculated at 2% above the 3-month London Interbank Offered Rate ('LIBOR") ascertained at specified times ; and B. The Bank advised CGI that it would accept in full satisfaction and discharge of all principal, accrued interest and any and all others sums which may be due under the Note the sum of US$ 89,374.49, payable in lawful money of the United States and in same day funds on the date hereof; and C. CGI has this day made payment herewith to the Bank of the amount set forth in Preamble B above, in accordance with the terms specified therein, and in full satisfaction and discharge of the obligations specified therein. Now, Therefor: CORNICHE GROUP INCORPORATED JAMES FYFE (the said corporation and individuals, together with their respective executors, administrators, successors and assigns collectively jointly, and severally the "CGI Group") and THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND (the said corporation together with its successors and assigns, collectively, jointly, and severally the "Bank Group")for good and valuable consideration, the receipt of which is acknowledged each from the other, have entered into the agreements of release set forth below. 116 1. The CGI Group and each and every one of them respectively do, by these presents, remise, release and forever discharge the Bank Group and each and every one of them from all liabilities, accounts, causes of action, sums of money, reckonings, contracts, controversies, agreements, damages, judgments, executions, claims, demands, debts, obligations, promises, covenants, actions and undertakings, in law or in equity, which against the Bank Group and each and every one of them the CGI Group and each and every one of them ever had, now have or hereafter can, shall or may have, for or by reason of any matter, cause or thing whatsoever, up to and through the date hereof.Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 2. The Bank Group and each and every one of them respectively do, by these presents, remise, release and forever discharge the CGI Group and each and every one of them from all liabilities, accounts, causes of action, sums of money, reckonings, contracts, controversies, agreements, damages, judgments, executions, claims, demands, debts, obligations, promises, covenants, actions and undertakings, in law or in equity, which against the CGI Group and each and every one of them the Bank Group and each and every one of them ever had, now have or hereafter can, shall or may have, for or by reason of any matter, cause or thing whatsoever, up to and through the date hereof. 3. In the event the payment to the Bank referred to in Preamble B must be returned, repaid or disgorged to the CGI Group, a trustee or any other person, in whole or in part, Sections 1 and 2 hereof shall be null and void and of no force or effect. In Witness Whereof, the parties have caused these presents to be executed by the following persons thereunto duly authorized as of January 30, 1997. CORNICHE GROUP INCORPORATED By: /s/ James Fyfe JAMES FYFE, Vice President /s/ James Fyfe JAMES FYFE THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND By /s/ John Kelly 117Source: Caladrius Biosciences, Inc., 10-K, April 29, 1997Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Continue reading text version or see original annual report in PDF format above