-----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, NCdAnqAlWWUYh4w5hDBsC2BAOPFeTV1fBYAOvbgs/xubHIh+zgAw8AZGcDUNslpk J5c1cpWqXrxsJGAuiIrSaQ== 0000950148-99-001661.txt : 19990721 0000950148-99-001661.hdr.sgml : 19990721 ACCESSION NUMBER: 0000950148-99-001661 CONFORMED SUBMISSION TYPE: 10KSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990720 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEAM COMMUNICATION GROUP INC CENTRAL INDEX KEY: 0001035700 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE DISTRIBUTION [7822] IRS NUMBER: 954519215 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB/A SEC ACT: SEC FILE NUMBER: 333-26307 FILM NUMBER: 99666878 BUSINESS ADDRESS: STREET 1: 12300 WILSHIRE BLVD STREET 2: SE 400 CITY: LOS ANGELES STATE: CA ZIP: 90025 BUSINESS PHONE: 3104423500 MAIL ADDRESS: STREET 1: 12300 WILSHIRE BLVD STREET 2: #400 CITY: LOS ANGELES STATE: CA ZIP: 90025 10KSB/A 1 10-KSB/A 1 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-KSB/A (MARK ONE) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . COMMISSION FILE NO. 333-26307 TEAM COMMUNICATION GROUP, INC. (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER) CALIFORNIA 954519215 (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 12300 WILSHIRE BLVD., SUITE 400, LOS ANGELES, CALIFORNIA 90025 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (310) 442-3500 (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE) SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT: NONE SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT: TITLE OF EACH CLASS COMMON STOCK Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject of such filing requirements for the past 90 days. Yes [X] No [ ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will 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-KSB or any amendment to this Form 10-KSB. [ ] Registrant's revenues for its most recent fiscal year were $13,581,900. The aggregate market value of the voting stock held by non-affiliates computed based on the average of the closing bid and asked prices of such stock as of April 9, 1999, was approximately $8,250,000. The number of shares outstanding of the issuer's common equity as of April 9, 1999, was 3,127,161 shares of common stock, no par value. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] Documents Incorporated by Reference: None - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 2 PART II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS MARKET INFORMATION Our Common Stock began to trade on the NASDAQ SmallCap Market under the symbol "TMTV" in July, 1998. The following table sets forth the high and low last sales prices as reported on the NASDAQ SmallCap Market for the time period that our Common Stock has been publicly traded.
SALES PRICES FOR COMMON STOCK ---------------- QUARTER ENDING HIGH LOW -------------- ------ ------ September 30, 1998.......................................... 5.00 1.563 December 31, 1998........................................... 2.75 1.469
HOLDERS The approximate number of record holders of our Common Stock as of April 9, 1999, was 47, as well as 55 in street name. DIVIDENDS We have never paid cash dividends on our Common Stock. We anticipate that any future earnings, of which there is no assurance, will be retained for development of our businesses, and, therefore, it can be expected that no dividends on our Common Stock will be declared in the foreseeable future. RECENT SALES OF UNREGISTERED SECURITIES (a) Between September 1998 and January 1999 we issued shares of our Common Stock to the following individuals and entities: (i) Fifty Nine Thousand (59,000) shares to Delbert Reedy, an individual ("Reedy") (the "Reedy Shares"), pursuant to the conversion of that certain promissory note, dated May 29, 1998, payable to Reedy in the amount of Fifty Thousand Dollars ($50,000) (the "Reedy Note"); (ii) Fifty Nine Thousand (59,000) shares to the Carter Family Trust ("Carter") (the "Carter Shares"), pursuant to the conversion of that certain promissory note, dated May 29, 1998, payable to Carter in the amount of Fifty Thousand Dollars ($50,000) (the "Carter Note"); (iii) Thirty One Thousand (31,000) shares to Claudio Nessi, an individual ("Nessi") (the "Nessi Shares"), pursuant to that certain promissory note, dated June 18, 1998 , payable to Nessi in the amount of Fifty Thousand Dollars ($50,000) (the "Nessi Note"), (iv) 1,000 shares for Dr. Michael Berlin in connection with certain accommodations made to Dr. Michael Berlin (the "Berlin Shares"), and (v) 50,000 shares (the "Marathon Shares") to Marathon Consulting, Inc. ("Marathon") and 283,000 shares (the "IRS Shares") to Investor Relations Services, Inc. ("IRS") (collectively, the Marathon Shares and the IRS Shares are referred to herein as the "IR Shares") in connection with the Consulting Agreement, dated as of November 17, 1998 with Investor Relations Services, Inc., (The Reedy Shares, the Carter Shares, the Nessi Shares, the Berlin Shares, and IR Shares the are hereinafter sometimes collectively referred to as the "Shares," and Reedy, Carter, Nessi, Berliner, Marathon and IRS are hereinafter sometimes collectively referred to as the "Recipients"). The issuance of the Shares to the Recipients were made pursuant to non-public transactions with existing security holders or service providers, and were exempt from registration under Section 4(2) of the Securities Act of 1933. (b) During 1998, we granted warrants to purchase our Common Stock to the following individuals and entities: (i) 22,000 and 10,000 warrants, respectively, to Mansion House International and Danny Chan, respectively, exercisable at $2.75 per share (the "Mansion/Chan Shares"), (ii) 5,000 warrants to Hedblom Partners, exercisable at $3.50 per share (the "Hedblom Shares"), (iii) 200,000 warrants to Glen Michael Financial (the "Glen Michael Shares"); 100,000 exercisable at $1.62 per share, 75,000 exercisable at $3.00 per share and 25,000 exercisable at $3.25 per share, and (iv) 10,000 warrants to Ralph Olsen, exercisable at $2.00 per share (the "Olsen Shares"), to such parties for services provided to us. In addition, we granted (x) 121,000 and 10,000 warrants, respectively, to Chase Financial Limited and Robert Herskowitz, respectively, exercisable at $1.62 per share (the "Chase/Herskowitz Shares") and (y) an aggregate of 20,000 warrants, 5,000 each to Investor Relations Services, Aurora Holdings, Amber Capital and Affiliated Services, respectively (the "IRS/Aurora Shares"), in connection with debt that was raised. We also issued to Michael Jay Solomon and Seth Wellenson, 30,000 warrants each, exercisable at $2.50 per share (the "Solomon Shares" and the "Willenson Shares", respectively, for agreeing to serve as members 3 of our Board of Directors. The issuance of the Mansion/Chan Shares, the Hedblom Shares, the Glen Michael Shares, the Olsen Shares, the Chase/Herskowitz Shares, the IRS/Aurora Shares, the Solomon Shares and the Willenson Shares were made pursuant to non-public transactions with existing security holders, service providers or outside members of the Board of Directors, and were exempt from registration under Section 4(2) of the Securities Act of 1933. (c) On January 30, 1999, we entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with Austinvest Anstalt Balzers, Esquire Trade & Finance Inc., Amro International, S.A. and Nesher Inc. (collectively, the "Purchasers") pursuant to which we agreed to sell up to and issue to the Purchasers, and the Purchasers agreed to purchase from us, an aggregate principal amount of up to $2,000,000 of 8% Convertible Debentures (the "Debentures") and Warrants (the "Warrants") to purchase up to 200,000 shares of Common Stock. The sale is to take place in up to four separate trades, the first of which (the "Initial Closing") occurred on January 30, 1999. On that date, we sold, for an aggregate purchase price of $850,000, $850,000 principal amount of Debentures and 85,000 Warrants. The Debentures are convertible into shares of Common Stock at the option of the Purchasers at any time after the Initial Closing. The conversion price for each Debenture in effect on any conversion date will be the lesser of (A) an amount equal to 90% of the average per share market value for five consecutive trading days immediately prior to the Initial Closing date or (B) an amount equal to 85% of the per share market value for the trading day having the lowest per share market value during the five trading days prior to the conversion date. Purchasers effect conversions by surrendering the Debentures to be converted, together with the form of conversion notice attached thereto. If not otherwise converted, the Debentures mature on January 27, 2002. The Warrants are exercisable at an exercise price equal to 110% of the Per Share Market Value as of the last Trading Day prior to the date of the issuance of the Warrants. This price, which is subject to adjustment in the event of certain dilutive events, was $1.96 as of the Initial Closing. The Warrants expire three years after their date of issuance. Without shareholder approval, we cannot issue securities representing more than 20% of our outstanding shares of Common Stock at a price below market value or book value pursuant to applicable NASDAQ rules. We intend to immediately seek shareholder approval ("Shareholder Approval") at a meeting of our shareholders held in accordance with our articles of incorporation and by-laws, for the issuance by us of all of the shares of Common Stock potentially called for as a consequence of the conversion of the Debentures into shares of Common Stock at a price less than the greater of the book or market value on the Original Issue Date as and to the extent required pursuant to Rule 4460(i) of The NASDAQ Stock Market, Inc.'s Marketplace Rules (or any successor or replacement provision thereof). If on the Conversion Date applicable to any conversion, (A) the Common Stock is then listed for trading on the NASDAQ National Market, the New York Stock Exchange, the American Stock Exchange or The NASDAQ SmallCap Market, (B) the Conversion Price then in effect is such that the aggregate number of shares of Common Stock that would then be issuable upon conversion of all the outstanding Debentures, together with any shares of Common Stock previously issued upon conversion of Debentures, would equal or exceed 20% of the number of shares of Common Stock outstanding on the Original Issue Date, and (C) we have not previously obtained Shareholder Approval from our shareholders, may cause us to be subject to financial penalties, as well as being required to issue additional shares of Common Stock. Similar penalties apply in the event that we cannot effectuate the filing of the Registration Statement in a timely fashion. We have retained the right to redeem the Debentures at a price equal to 115% of the principal amount thereof, if the price of the our Common Stock trades at a price of $1.50 or less per share for a specified period of trading. The Purchasers have agreed, subject to certain limitations, that they will not engage in any "short sales" of the Company's Common Stock. The issuance of the shares to the Recipients were made pursuant to non-public transactions with existing security holders or service providers, and were exempt from registration under Section 4(2) of the Securities and Exchange Act of 1933, as amended. (d) On March 19, 1999, we entered into a Securities Purchase Agreement, dated as of February 23, 1999 (the "Securities Purchase Agreement") with VMR Luxembourg, S. A., Chateau Woltz, 34 Rue Neuve, Remich, L5560 Luxembourg, pursuant to which we agreed to sell up to and issue to the Purchasers, and the Purchasers agreed to purchase from the Company, an aggregate principal amount of up to $1,000,000 of 8% Convertible Debentures (the "Debentures") and Warrants (the "Warrants") to purchase up to 100,000 shares of Common Stock. The sale (referred to herein as the "VMR Sale") is to take place in up to two separate sales, the first of which (the "Initial Closing") occurred on March 16, 1999. On 4 that date the Company sold, for an aggregate purchase price of $500,000, $500,000 principal amount of Debentures and 50,000 Warrants. An additional second sale of $500,000 was subscribed for on April 7, 1999. The purchasers have also indicated they intend to convert their debentures into Common Stock. The terms of the Debentures and Warrants are substantially similar to the Debentures and Warrants issued on January 29, 1999. The holders of those Debentures (the "Original Purchasers") have consented to this sale, and have agreed to increase the overall size of that offering to $3,000,000. The Original Purchasers have agreed that the registration of the underlying securities must now be completed by May 31, 1999 , and that a special meeting of shareholders, if necessary, must be held by April 30, 1999. The Debentures are convertible into shares of Common Stock at the option of the Purchasers at any time after the Initial Closing. The conversion price for each Debenture in effect on any conversion date will be the lesser of (A) an amount equal to 90% of the average per share market value for five consecutive trading days immediately prior to the Initial Closing date or (B) an amount equal to 85% of the per share market value for the trading day having the lowest per share market value during the five trading days prior to the conversion date. Purchasers effect conversions by surrendering the Debentures to be converted, together with the form of conversion notice attached thereto. If not otherwise converted, the Debentures mature on January 27, 2002. The Warrants are exercisable at an exercise price equal to 110% of the Per Share Market Value as of the last Trading Day prior to the date of the issuance of the Warrants. This price, which is subject to adjustment in the event of certain dilutive events, was $1.96 as of the Initial Closing. The Warrants expire three years after their date of issuance. Pursuant to the terms of the Securities Purchase Agreement, and a related registration rights agreement, we are obligated to file a registration statement with respect to the shares issuable upon conversion of the debentures and the shares issuable upon exercise of the Warrants, which Registration Statement must be declared effective, as indicated above, no later than May 31, 1999. Beginning on the date on which the initial registration statement (the "Registration Statement") is filed with the Securities and Exchange Commission (the "Commission"), we have the right to deliver a written notice to the Original Purchasers requiring the Purchasers to purchase an additional $350,000 aggregate principal amount of Debentures and Warrants to purchase an additional 35,000 shares of Common Stock for an aggregate purchase price of $350,000. Subject to the terms and conditions set forth in Section 4.2 of the Securities Purchase Agreement, and elsewhere in the Securities Purchase Agreement and beginning on the date that the Registration Statement is declared effective by the Commission, we have the right to request that the Original Purchasers purchase an additional $400,000 aggregate principal amount of Debentures and Warrants to purchase an additional 40,000 shares of Common Stock for an aggregate purchase price of $400,000. The issuance of the shares to the foregoing recipients were made pursuant to non-public transactions with existing security holders or service providers, and were exempt from registration under Section 4(2) of the Securities and Exchange Act of 1933, as amended. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of March 31, 1999, certain information regarding the ownership of Common Stock by: (i) each person who is known by the us to own of record or beneficially more than 5% of the outstanding Common Stock; (ii) each of our directors; and (iii) each named executive officer; and (iv) all directors and executive officers as a group. Except as otherwise indicated, the shareholders listed in the table have sole voting and investment power with respect to the shares indicated.
AGGREGATE NUMBER PERCENT OF OF SHARES BENEFICIAL SHARES NAME AND ADDRESS(1) OWNED(2) OUTSTANDING ------------------- -------------------- ----------- Drew S. Levin(3)........................................ 684,123 23.6% Joe Cayre(4)............................................ 263,617 9.2% Michael Jay Solomon(5).................................. 50,000 *% W. Russell Barry(6)..................................... 30,000 *% Jonathan D. Shapiro(7).................................. 18,750 *% Glen Michael Financial(8)............................... 200,000 6.6% All officers and directors as a group (8 persons)....... 756,623 25.4%
- --------------- * Less than 1% 5 (1) Address is c/o Team Communications Group, Inc., 12300 Wilshire Boulevard, Suite 400, Los Angeles, California 90025. (2) Gives effect to the anti-dilution provisions of the sale of 2.5% of the Company's Common Stock from Mr. Drew Levin to Mr. Morris Wolfson, Mr. Abraham Wolfson, Mr. Aaron Wolfson and Wedmore Corporation N.V. and the conversion of the Conversion Note computed on a fully diluted basis. (3) Includes 249,488 shares which Mr. Joseph Cayre has agreed to transfer to Mr. Levin pursuant to Mr. Levin's arrangements with Mr. Cayre. Mr. Levin has pledged his shares and his options to Mr. Cayre pursuant to Mr. Cayre's loan transaction with the Company. Includes options to acquire 85,000 shares of Common Stock at an exercise price of $1.00 per share which the Company granted to Mr. Levin concurrently with the execution of his Employment Agreement. (4) Includes options to purchase 48,743 shares of the Company's Common Stock at an exercise price of $0.43 per share. (5) Includes a warrant to purchase 30,000 shares of Common Stock at an exercise price $2.50 per share. (6) Includes a warrant to purchase 30,000 shares of Common Stock at an exercise price $2.50 per share. (7) Pursuant to Mr. Shapiro's employment agreement, he has been granted options to purchase 90,000 shares of the Company's Common Stock at an exercise price of $1.65 per share, of which 18,750 shares are exercisable within 60 days. (8) Includes a warrant to purchase 200,000 shares of Common Stock; 100,000 of which are exercisable at $1.62 per share, 75,000 of which are exercisable at $3.00 per share and 25,000 exercisable at $3.25 per share, all of which are exercisable within 60 days. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TEAM COMMUNICATIONS GROUP, INC. By: /s/ Jonathan D. Shapiro ------------------------------------ Jonathan D. Shapiro, President, Chief Operating Officer and Director -----END PRIVACY-ENHANCED MESSAGE-----