-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PPSONAqQ5WpyCGu518tVJ5q3ACWQFJsFA2xajCCuosBt+7NLlwgf05uvCG2U6bTw c5gZNYekObAXcvEG7HVNLA== 0000950133-02-001295.txt : 20020415 0000950133-02-001295.hdr.sgml : 20020415 ACCESSION NUMBER: 0000950133-02-001295 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20020329 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NEW FRONTIER MEDIA INC /CO/ CENTRAL INDEX KEY: 0000847383 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE DISTRIBUTION [7822] IRS NUMBER: 841084061 STATE OF INCORPORATION: CO FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-54889 FILM NUMBER: 02595053 BUSINESS ADDRESS: STREET 1: 5435 AIRPORT BLVD STREET 2: SUITE 100 CITY: BOULDER STATE: CO ZIP: 80301 BUSINESS PHONE: 3034440632 FORMER COMPANY: FORMER CONFORMED NAME: STRATEGIC ACQUISITIONS INC DATE OF NAME CHANGE: 19600201 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL SECURITIES HOLDING CORPORATION DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BONN EDWARD J CENTRAL INDEX KEY: 0000922300 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 707 WINCHESTER CIRCLE STREET 2: SUITE 200 CITY: BOULDER STATE: CO ZIP: 80301 BUSINESS PHONE: 3036520808 MAIL ADDRESS: STREET 1: 707 WINCHESTER CIRCLE STREET 2: SUITE 200 CITY: BOULDER STATE: CO ZIP: 80301 SC 13D/A 1 w59128sc13da.txt AMENDMENT NO. 2 TO SCHEDULE 13D ----------------------------------- UNITED STATES OMB APPROVAL SECURITIES AND EXCHANGE COMMISSION ----------------------------------- WASHINGTON, D.C. 20549 OMB Number: 3235-0145 Expires: October 31,2002 Estimated average burden hours per response............14.90 ------------------------------------
SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 2)* New Frontier Media, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 644398109 - -------------------------------------------------------------------------------- (CUSIP Number) Edward J. Bonn 7007 Winchester Circle, Suite 200 Boulder, CO 80301 (303) 444-0900 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copy to: Thaddeus Bereday, Esq. Brobeck, Phleger & Harrison LLP 2100 Reston Parkway, Suite 203 Reston, VA 20191 (703) 621-3000 March 29, 2002 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 249.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 8 Pages) * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SEC 1746 (03-00) - -------------------------------------------------------------------------------- CUSIP No. 644398109 13D Page 2 of 8 Pages - -------------------------------------------------------------------------------- Pursuant to Rule 13d-2 under the Securities Exchange Act of 1934, as amended, the Statement on Schedule 13D, dated October 27, 1999, as amended by Amendment No. 1 dated March 22, 2002 (the "Statement"), filed by Edward J. Bonn and BEF, LLC, relating to the common stock, par value $.0001 per share (the "Common Stock"), of New Frontier Media, Inc., a Colorado corporation (the "Issuer"), is hereby amended as set forth below. Unless otherwise indicated, capitalized terms used herein shall have the same meanings ascribed to them in the Statement. The information set forth in the Exhibits attached hereto is hereby expressly incorporated herein by reference, and the response to each item herein is qualified in its entirety by the provisions of such Exhibits. ITEM 4. PURPOSE OF TRANSACTION. Item 4 is hereby amended and supplemented as follows: Prior to a special meeting of the Board held on March 29, 2002, Mr. Bonn delivered a letter to the members of the Board relating to Mr. Bonn's intent, as previously disclosed, to effect a change in the composition of the Issuer's management. A copy of the letter is attached hereto as Exhibit 8. Following the special meeting of the Board, Mr. Bonn delivered to the Issuer a demand, pursuant to Colorado law, to inspect the Issuer's corporate records. A copy of the demand letter is attached hereto as Exhibit 9. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Item 7 is hereby amended and supplemented as follows: Exhibit 1 Joint Filing Agreement dated as of March 21, 2002, between Mr. Bonn and BEF (previously filed) Exhibit 8 Letter dated March 28, 2002 Exhibit 9 Demand to inspect corporate records dated March 29, 2002 8205946-2 - -------------------------------------------------------------------------------- CUSIP No. 644398109 13D Page 3 of 8 Pages - -------------------------------------------------------------------------------- SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that that information set forth in this statement is true, complete and correct. Date: March 29, 2002 /s/ EDWARD J. BONN ---------------------------------------- Edward J. Bonn Date: March 29, 2002 BEF, LLC By: /s/ EDWARD J. BONN ------------------------------------- Edward J. Bonn Manager The original statement shall be signed by each person on whose behalf the statement is filed or his authorized representative. If the statement is signed on behalf of a person by his authorized representative other than an executive officer or general partner of the filing person, evidence of the representative's authority to sign on behalf of such person shall be filed with the statement, provided, however, that a power or attorney for this purpose which is already on file with the Commission may be incorporated by reference. The name and any title of each person who signs the statement shall be typed or printed beneath his signature. ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001) 8205946-2 EX-8 3 w59128ex8.txt LETTER DATED MARCH 28, 2002 Page 4 of 8 Pages EXHIBIT 8 EDWARD J. BONN 15303 VENTURA BLVD. SUITE 1070 SHERMAN OAKS, CA 91403 March 28, 2002 VIA FAX To Members of the Board of Directors of New Frontier Media, Inc.: In preparation for the special Board meeting called by Mark Kreloff for Friday, March 29, 2002 at 9:00 AM (Colorado time), I wanted to clarify certain matters and bring the following to your attention. 1. NOOF = THE WORST PERFORMING ADULT ENTERTAINMENT STOCK. Over the past two years, the Company's shareholders have lost over 80% of their stock value. Relative to our public comparables of Private Media Group, Inc. (NASDAQ: PRVT) and Playboy Enterprises, Inc., (NYSE:PLA), NOOF has under performed by 40% and 65% -- to say nothing of the Company's performance relative to the Russell 2000, where NOOF has under performed by a staggering 70%. The Board of Directors must address this matter. Our principal obligation as directors is to act in our shareholders' best interests. The situation must be corrected. 2. THE TIME TO ACT IS NOW. Over the past two years, I have attempted to work with current management and the Board to address these issues and develop an acceptable business strategy for the Company. These efforts have been unsuccessful. While I am willing to work with current management and the Board to address these matters on a responsible basis, I do not believe that the current CEO is behaving in a constructive manner. I do not profess to have all the answers, but I do know that the current management team has failed to deliver shareholder value and must be held accountable for that failure. I urge you to impose accountability on management for the poor performance of the Company. The proposals I have heard from management regarding the future direction of the Company are just more of the same. I strongly advocate retaining a new management team with the right experience and allowing that team to develop and implement a plan to restore value for all of the Company's shareholders. 3. MANAGEMENT IS NOW WORKING TO ENTRECH ITSELF. Notwithstanding the Board's repeated efforts to encourage management to develop a strategy, current management has failed to develop an appropriate plan to address the declining market value of the Company. Rather than addressing this critical issue, our CEO is now working to perpetuate his position in office. Page 5 of 8 Pages Members of the Board of Directors of New Frontier Media, Inc. Page 2 On March 22, Mark Kreloff left me a voicemail message calling me a "despicable human being" and vowing to fight my efforts to effect a change in management. A transcript of this voicemail is attached. In an effort to implement his strategy to perpetuate his tenure, Mr. Kreloff is using our Company's treasury to retain new counsel for the Company, without consulting the full Board or using an independent Board committee with its own independent counsel to evaluate these matters. Why is the Board letting the person most responsible for the dismal performance of the Company now select counsel to perpetuate himself in office? I realize current management is attempting to make Internet operations an issue. This is not the issue. The performance of the Company over the last two years is the issue. It is critical that we obtain an independent perspective from a new management team. This is the only way that the Company can regain the confidence of investors and develop an effective plan to enhance shareholder value. 4. CONTRARY TO ADVICE FROM COMPANY COUNSEL, THE "POISON PILL" HAS NOT BEEN TRIGGERED. On March 20, 2002, Hank Greyson, acting as counsel to the Company, called my counsel to allege that Brad Weber and I are acting as a "group" for purposes of the federal securities laws and that, as a result, the Company's "poison pill" anti-takeover device had been triggered. This extraordinary and irresponsible allegation would make us one of the few companies in history to trigger a poison pill and would wreak havoc on our Company's capitalization. The rights agreement excludes any person who (like me) owned 15% or more of the Company's common stock on the day the Rights Agreement was adopted. Unless that person increases his "beneficial ownership" of common stock by 1% or more, such pre-existing share ownership is "grandfathered" under the poison pill. I have not increased my beneficial ownership of common stock in any way. Furthermore, Brad Weber and I have not been acting as a "group," and we have done nothing to trigger the poison pill. Any activities and business relationships between Brad and myself are disclosed and are well known; these relationships were in place long before adoption of the poison pill. Are there any members of the Board, other than Mark Kreloff, who thought that the poison pill would be triggered by the directors taking action under the Company's bylaws or by the shareholders exercising their rights? The rights agreement provides the Board with broad discretion to amend the Rights Agreement and redeem the rights. Does the Board understand the true financial and economic consequences of deciding to trigger the Rights Plan? The Board should create an independent committee to analyze any issues that may arise under the Rights Plan, based on the advice of separate independent counsel selected by this independent committee, and without the involvement of management that appears to be set on a path to preserve its positions in office. Page 6 of 8 Pages Members of the Board of Directors of New Frontier Media, Inc. Page 3 I do not believe that the Board adopted the poison pill to frustrate directors in their efforts to address critical management issues. The issue of selection and retention of the CEO is an essential part of the Board's proper discharge of its fiduciary responsibilities. Nor is the poison pill intended to frustrate directors or shareholders in airing their views. The poison pill does not supercede the process of shareholder democracy. As a director and shareholder of the Company, I and others are entitled to be heard and to exercise our rights. 5. THE BOARD'S RESPONSIBILITY. The Board now has an opportunity to put the Company back on track. A fresh start with new independent management and new independent directors is required. Current management is attempting to entrench itself in office, regardless of the expense or impact on our Company. After being appointed to the special committee to address the issues regarding Mark Kreloff's departure, I have had my advisors talk to Alan Isaccman to develop an acceptable proposal. I have spoken with Alan Isaccman and submitted written proposals that are far more generous than what the Company is obligated to provide under its amended employment agreement with Mark Kreloff. As was our plan, we can discuss these issues at length at our Board meeting on Monday. The side show that management is now attempting to create at this late date, after years of mismanagement, is not in our shareholder's best interests nor consistent with our fiduciary duties. 6. IT IS TIME TO ACT WITH OUR SHAREHOLDERS' INTERESTS IN MIND. Our shareholders are watching. We can resolve this process professionally - in the exercise of our due care as directors - or we can watch as management drives the Company to incur tremendous cost and further distraction. As we consider how to proceed on these important topics, we have a responsibility to prevent waste of the Company's assets. As you hear management justify its actions and maneuver to prevent the workings of shareholder democracy, consider whether the CEO is using the Company's assets and resources in the best interests of all shareholders. Every member of the Board of Directors will be held accountable for these actions. The future of our Company is at stake. I look forward to hearing your views and am available to answer any questions. Sincerely, /s/ Edward J. Bonn Edward J. Bonn Page 7 of 8 Pages [TRANSCRIPT OF VOICEMAIL LEFT BY MARK KRELOFF FOR EDWARD BONN ON MARCH 22, 2002] Mark Kreloff: Hey Ed, do me a favor and don't get back to me as soon as you can. That newswire was the last straw. You have humiliated me. You have embarrassed me. You have done the most despicable thing that I have ever thought to think of in my life. I have newspaper reporters wanting to talk to me about this. This is an outrage and I am going to go after you and I'm going to fight to have you thrown off the board unless you do something to rescind this. This is just outrageous and you are a despicable human being. EX-9 4 w59128ex9.txt DEMAND TO INSPECT CORPORATE RECORDS Page 8 of 8 Pages EXHIBIT 9 DEMAND TO INSPECT CORPORATE RECORDS New Frontier Media, Inc. 7007 Winchester Circle Suite 200 Boulder, CO 80301 Attn: Michael Weiner, Secretary I hereby demand, pursuant to Sections 7-116-102 and 7-116-103 of the Colorado Business Corporation Act (the "Act"), that the following records of New Frontier Media, Inc., a Colorado corporation (the "Company"), be made available to me or my agent or attorney for inspection and copying, at the Company's principal office, on Friday, April 5, 2002: 1. Each of the items listed in Section 7-116-101(5) of the Act; 2. Minutes of each meeting of the Company's board of directors (the "Board") or any committee of the Board held, and records of any actions by the Board or any committee of the Board without a meeting taken, during the last two years; 3. Accounting records of the Company for the past two years; and 4. All records of the names and addresses of the shareholders of the Company maintained pursuant to Section 7-116-101(3) of the Act. The purposes of my inspection of the records listed in items 2 and 3 above are to investigate suspected corporate mismanagement (as evidenced, in part, by the steep decline in the value of the Company's stock over the past two years) and possible breaches of duties by the Company's management. The purpose of my inspection of the records listed in item 4 above is to obtain information in anticipation of possible communications with the Company's shareholders regarding corporate affairs. I or my agent or attorney will arrive at the Company's principal office on the morning of April 5, 2002, to conduct the inspection of the records described above. Date: March 29, 2002 _/s/ Edward J. Bonn__________ Edward J. Bonn -----END PRIVACY-ENHANCED MESSAGE-----