-----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, O3m505pI2ZUxcSi2gZ8/9Fiy5Bb6KOfDDgwKZfnatQ65lYhREDWV7aubMzAo9PQ3 uS3+53Ijgt9WhxuTcDQfMg== 0001005150-97-000145.txt : 19970314 0001005150-97-000145.hdr.sgml : 19970314 ACCESSION NUMBER: 0001005150-97-000145 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961209 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970313 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AFFINITY ENTERTAINMENT INC CENTRAL INDEX KEY: 0000730626 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 222473403 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12193 FILM NUMBER: 97555877 BUSINESS ADDRESS: STREET 1: 15438 N FLORIDA AVE STE 103 CITY: TAMPA STATE: FL ZIP: 33613 BUSINESS PHONE: 8132641778 MAIL ADDRESS: STREET 1: 15436 NORTH FLORIDA AVE STREET 2: STE 103 CITY: TAMPA STATE: FL ZIP: 33613 FORMER COMPANY: FORMER CONFORMED NAME: AFFINITY TELEPRODUCTIONS INC /FL DATE OF NAME CHANGE: 19940322 FORMER COMPANY: FORMER CONFORMED NAME: CBNI DEVELOPMENT CO INC DATE OF NAME CHANGE: 19930702 FORMER COMPANY: FORMER CONFORMED NAME: COMPUTERIZED BUYING NETWORK INC DATE OF NAME CHANGE: 19920703 8-K 1 FORM 8-K FORM 8-K AMENDMENT NO. 1 Securities and Exchange Commission Washington, D.C. 20549 CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) 12/9/96 AFFINITY ENTERTAINMENT, INC. ---------------------------- Formerly Affinity Teleproductions, Inc. (Exact Name of Registrant as specified in its Charter) Delaware 0-12193 22-2473403 - -------------------------------------------------------------------------------- (State or other (Commission File (IRS Employer Jurisdiction of Number) Identification Incorporation) Number) 15310 Amberly Drive, Suite 370, Tampa, FL 33647 - ------------------------------------------------ (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including area code: 813-975-8180 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Acquisition of Tradewinds Television, Inc. On September 13, 1996, the Registrant and Tradewinds Television, LLC, a California limited liability company ("Tradewinds"), entered into an Interim Financing and Security Agreement (the "Security Agreement") pursuant to which Tradewinds granted the Registrant, as security for the repayment by Tradewinds of certain loans to be made by the Registrant, a first priority lien on substantially all of Tradewinds' assets (the "Assets"). The Assets include accounts receivable, the name and mark "Tradewinds Television," the rights to the syndicated television series "Bounty Hunters" and distribution rights to certain other television products. Between September 13, 1996 and November 19, 1996, the Registrant loaned Tradewinds an aggregate of approximately $823,000 (the "Loans") pursuant to the Security Agreement. Concurrently with the execution of the Security Agreement, the Registrant and Tradewinds engaged in negotiations pursuant to which the Registrant would purchase substantially all of the Assets. The parties entered into an Asset Purchase Agreement dated as of October 3, 1996, as amended, to provide for such acquisition. The sale of the assets was contingent upon the resolution to the satisfaction of the Registrant of various bankruptcy issues concerning other companies affiliated with Royeric Pack, the sole owner of Tradewinds. On November 14, 1996, the Registrant filed a complaint in Los Angeles Superior Court asserting that Tradewinds had defaulted under the Loans and the Security Agreement, and seeking judicial foreclosure of the Assets, among other claims. On December 6, 1996, Tradewinds, in lieu of foreclosure on the Assets by the Registrant, agreed to transfer and assign to the Registrant the Assets, subject to certain payables associated therewith, in consideration of the Registrant forgiving the indebtedness evidenced by the Loans. Such indebtedness, including accrued interest and related costs and expenses, was approximately $1,000,000. Also on December 6, 1996, the Registrant entered into an Executive Producer Agreement with Mr. - 2 - Pack, with respect to Mr. Pack providing executive producing services in connection with the Bounty Hunters series. Pursuant to such agreement, Mr. Pack received a $75,000 payment on December 6, 1996 for the first production season, and is entitled in the second production season to a fee of $3,000 per episode, payable upon airing of each such episode. On December 17, 1996, the Registrant agreed with the Trustee of Action Media Group, Inc., a company affiliated with Mr. Pack and which is the subject of a bankruptcy court proceeding ("AMG"), to pay $275,000 to the Trustee of AMG, and to secure in exchange a release of certain claims by the Trustee and AMG against Tradewinds and the Registrant with regard to indebtedness owed by Tradewinds to AMG and the assignment of Assets by Tradewinds to the Registrant in lieu of foreclosure, as described above. On December 18, 1996, the Court having jurisdiction over the AMG bankruptcy proceeding approved the $275,000 payment and release among AMG, Tradewinds and the Registrant. An order to this effect (the "Settlement Order") was entered into on January 14, 1997. The Trustee subsequently filed a motion seeking to amend the Settlement Order to carve out from the release certain unspecified liabilities owed by Tradewinds to third parties including AMG. On March 7, 1997, this motion was denied. The Registrant expects that the Trustee will execute the release shortly. The $275,000 payment will be made by the Registrant upon receipt of such release. The loans made to Tradewinds by the Registrant and the $275,000 to be paid to the Trustee of AMG are from internally generated funds of the Registrant. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS a) Financial Statements (1) Unaudited Pro Forma Combined Financial Statements of Affinity Entertainment, Inc. - 3 - b) Exhibits 10.01 Interim Financing and Security Agreement, dated as of September 13, 1996(1); 10.02 Asset Purchase Agreement, dated as of October 3, 1996(1); 10.03 Amendment No. 1 to the Asset Purchase Agreement, dated as of November 19, 1996(1); 10.04 $600,000 Secured Promissory Note(1); 10.05 Acknowledgment regarding $600,000 Note(1); 10.06 $122,997.18 Secured Promissory Note(1); 10.07 Acknowledgment regarding $122,997.18 Note(1); 10.08 $100,000 Secured Promissory Note(1); 10.09 Acknowledgment regarding $100,000 Note(1); 10.10 Assignment of Collateral in Lieu of Foreclosure, dated December 6, 1996(1). (1) Incorporated by reference to the Current Report on Form 8-K as filed with the Commission on December 24, 1996. - 4 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: March 13, 1997 AFFINITY ENTERTAINMENT, INC. ----------------------- By: /s/ William J. Bosso ----------------------- William J. Bosso President - 5 - AFFINITY ENTERTAINMENT, INC. and SUBSIDIARIES UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS The Company's September 30, 1996 unaudited pro forma combined financial statements give effect to the Company's acquisition of certain assets and related liabilities of Tradewinds Television LLC, as set forth in Note I to the financial statements, as if the acquisition and had occurred for balance sheet purposes on September 30, 1996, and for statement of operations purposes on October 1, 1996. The pro forma information is not necessarily indicative of the results that would have been reported had such events actually occurred on the dates specified, nor is it indicative of the Company's future results. These Unaudited Pro Forma Combined Financial Statements should be read in conjunction with the Company's Consolidated Audited Financial Statements dated September 30, 1996 and Notes thereto. - 6 - AFFINITY ENTERTAINMENT, INC. and SUBSIDIARIES UNAUDITED PRO FORMA COMBINED BALANCE SHEET SEPTEMBER 30, 1996 (IN THOUSANDS)
Historical Historical Pro Forma Company Tradewinds Adjustments Pro Forma ------- ---------- ----------- --------- ASSETS Cash and cash equivalents............................ $ 1,366 $ -- $ -- $ 1,366 Accounts receivable.................................. 133 345 -- 478 Programming costs.................................... 990 430 1,021 2,441 Other current assets................................. 188 -- -- 188 Property and equipment, net.......................... 543 -- -- 543 Loans receivable..................................... 539 -- (539) -- Due from officers and employees...................... 68 -- -- 68 Investment in joint venture.......................... 250 -- -- 250 Other assets......................................... 315 -- -- 315 ------- ----- -------- ------- Total assets......................................... $ 4,392 $775 $ 482 $5,649 ======= ==== ========= ====== LIABILITIES AND STOCKHOLDERS EQUITY Current Liabilities.................................. $ 151 $2,319 $(1,062) $1,408 Preferred stock...................................... 487 -- -- 487 Common stock......................................... 83 -- -- 83 A.P.I.C.............................................. 15,826 -- -- 15,826 Deficit.............................................. (5,894) (1,544) 1,544 (5,894) Stock subscription receivable........................ (5,829) -- -- (5,829) Unearned compensation................................ (432) -- -- (432) -------- ----------- ----------- --------- Total liabilities and stockholders equity............ $ 4,392 $ 775 $ 482 $ 5,649 ======= ======= ======== =======
- 7 - AFFINITY ENTERTAINMENT, INC. and SUBSIDIARIES UNAUDITED PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 1996 (IN THOUSANDS, EXCEPT SHARE DATA)
Historical Historical Pro Forma Company Tradewinds Adjustments Pro Forma ------- ---------- ----------- --------- Revenue.............................................. $ 2,078 $ 138 -- $ 2,216 Cost of revenue...................................... 1,046 406 -- 1,452 General and administrative........................... 5,437 1,812 -- 7,249 Forgiveness of debt.................................. -- (484) -- $ (484 ) ----------- -------- --------- -------- Loss from operations before other income............. (4,405) (1,596) -- (6,001) Other income......................................... 237 -- -- 237 -------- ----------- --------- -------- Net loss............................................. $(4,168) $(1,596) -- $(5,764) ======= ======= ========= ======= Net loss per common share............................ $ ( .56) $ ( .77) ======= ======= Average shares outstanding........................... 7,420 7,420 ===== =====
- 8 - AFFINITY ENTERTAINMENT, INC. AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA STATEMENTS AS OF SEPTEMBER 30, 1996 (1) On December 6, 1996, the Company acquired certain assets and related liabilities as an Assignment of Collateral in lieu of foreclosure on a note between the Company and Tradewinds Television, LLC ("Tradewinds"). The Company had previously advanced approximately $823,000 to Tradewinds to purchase certain assets of Tradewinds. The pro forma adjustments reflect the effects of the assets acquired and liabilities assumed which have been accounted for using the purchase method in accordance with APB Opinion No. 16. (2) The adjusted net loss per common share is based upon the weighted average number of shares of the Company outstanding. (3) The fair value of the consideration given by the Company to Tradewinds Television, LLC equaled $823,000. The excess of the consideration given over the net book value of the assets, net of the liabilities acquired, of Tradewinds were allocated to the programming capitalized costs, thereby increasing the programing costs by $1,021,000. - 9 - -----END PRIVACY-ENHANCED MESSAGE-----