-----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, TSNnhxmEf7PBRCx9/V58rJHJfcwc8kS/Kzp9m3gRt0uYistd/urUU+n43rsr4lfn ZFOA1zRMCeWbUHoc4myQEg== 0000897101-99-000561.txt : 19990518 0000897101-99-000561.hdr.sgml : 19990518 ACCESSION NUMBER: 0000897101-99-000561 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARMONY HOLDINGS INC CENTRAL INDEX KEY: 0000878246 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 954333330 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-19577 FILM NUMBER: 99628052 BUSINESS ADDRESS: STREET 1: 1990 WESTWOOD BLVD STREET 2: SUITE 310 CITY: LOS ANGELES STATE: CA ZIP: 90025-4676 BUSINESS PHONE: 3104467700 MAIL ADDRESS: STREET 1: 724 FIRST STREET NORTH CITY: MINNEAPOLIS STATE: MN ZIP: 55401 10-Q/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q/A (Mark One) [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended December 31, 1998; or Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ________ to ________. Commission File Number 000-19577 --------- HARMONY HOLDINGS, INC. ------------------------------------------------------ (Exact Name of Registrant as Specified in its Charter) DELAWARE 95-4333330 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 5501 EXCELSIOR BLVD. MINNEAPOLIS, MN 55416 (Address of Principal Executive Offices) (Zip Code) (612) 925-8840 (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether the 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 the 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date. Class Outstanding at February 10, 1999 ------------------- -------------------------------- COMMON STOCK, PAR VALUE 7,506,660 SHARES $.01 PER SHARE 1 INDEX HARMONY HOLDINGS, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets - December 31, 1998 and June 30, 1998. Consolidated Statements of Operations -- Three and six months ended December 31, 1998 and 1997. Consolidated Statements of Cash Flows -- Six months ended December 31, 1998 and 1997. Notes to consolidated financial statements -- December 31, 1998. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART I. FINANCIAL INFORMATION Item 1. Financial Statements HARMONY HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AMENDED DECEMBER 31, JUNE 30, 1998 1998 ------------------------------ ASSETS Current assets: Cash and cash equivalents $ 1,340,657 $ 3,834,023 Accounts receivable 3,814,037 6,604,186 Allowance for doubtful accounts (109,206) (43,717) Unbilled accounts receivable 578,901 327,475 Other current assets 1,379,537 1,051,296 Notes Receivable 4,600 235,155 ------------------------------ Total Current Assets 7,008,526 12,008,418 Property and equipment, net 2,369,247 2,123,412 Goodwill, net 175,000 2,545,885 Other assets 456,917 249,400 ------------------------------ Total Assets $ 10,009,690 $ 16,927,115 ============================== LIABILITY & SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 3,743,074 $ 3,199,760 Accrued liabilities 1,061,220 4,406,014 Accrued restructuring costs 887,794 -- Line of credit 2,205,384 2,750,000 Note payable - CBC 875,000 -- Deferred income 1,788,836 2,342,133 ------------------------------ Total Current Liabilities 10,561,308 12,697,907 Total Liabilities 10,561,308 12,697,907 ------------------------------ Shareholders' equity: Common stock, $.01 par value: Authorized shares- 20,000,000 Issued & outstanding shares- 7,506,660 September 30 and 7,237,429 June 30, 1998 75,067 72,375 Additional paid-in capital 16,365,596 15,800,687 Accumulated deficit (16,992,281) (11,643,854) ------------------------------ Total Shareholders' Equity (551,618) 4,229,208 ------------------------------ Total Liabilities & Shareholders' Equity $ 10,009,690 $ 16,927,115 ==============================
HARMONY HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
AMENDED AMENDED THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, ------------------------------ ------------------------------ 1998 1997 1998 1997 ------------------------------ ------------------------------ Revenues: Contract revenues $ 14,079,885 $ 11,340,760 $ 31,384,284 $ 22,720,236 Cost of production 12,305,295 9,130,992 26,828,754 18,254,490 ------------------------------ ------------------------------ Gross profit 1,774,590 2,209,768 4,555,530 4,465,746 Operating expenses: Selling 817,365 567,237 1,634,049 1,199,451 General and administrative 1,808,444 2,171,276 3,848,590 4,189,387 ------------------------------ ------------------------------ Income (loss) from productions (851,219) (528,745) (927,109) (923,092) Subsidiary stock option compensation 108,800 -- 217,600 -- Depreciation & amortization 264,980 174,337 474,336 350,071 Restructuring costs and impairment of assets 3,532,495 -- 3,532,495 -- ------------------------------ ------------------------------ Income (loss) from operations (4,757,494) (703,082) (5,151,540) (1,273,163) Interest income 14,763 9,604 29,925 29,487 Interest expense (97,563) (8,541) (217,210) (12,236) ------------------------------ ------------------------------ Net income (loss) before income taxes (4,840,294) (702,019) (5,338,825) (1,255,912) Income taxes -- (20,106) 9,601 23,142 ------------------------------ ------------------------------ Net income (loss) $ (4,840,294) $ (681,913) $ (5,348,426) $ (1,279,054) ============================== ============================== Net income (loss) per share $ (0.66) $ (0.11) $ (0.73) $ (0.20) ============================== ============================== Weighted average number of shares outstanding 7,389,603 6,481,779 7,313,516 6,497,614 ============================== ==============================
HARMONY HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
AMENDED SIX MONTHS ENDED DECEMBER 30, ------------------------------ 1998 1997 ------------------------------ OPERATING ACTIVITIES: Net loss $ (5,348,426) $ (1,279,054) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation & amortization 474,336 348,806 Impairment of assets 2,215,175 -- Issuance of non-cash compensation expense 217,600 75,000 Decrease (increase) in: Accounts receivable 2,855,638 2,501,574 Unbilled accounts receivable (251,426) (3,396) Other assets (328,241) (231,924) Increase (decrease) in: Accounts payable 543,314 (429,815) Accrued liabilities (3,344,794) (1,883,940) Deferred income (553,297) 573,034 Accrued restructuring costs 887,794 -- ------------------------------ Net cash used in operating activities: (2,632,327) (329,715) INVESTING ACTIVITIES: Capital expenditures (771,978) (336,106) Notes receivable 230,555 (4,789) ------------------------------ Net cash used in investing activities (541,423) (340,895) ------------------------------ FINANCING ACTIVITIES: Line of credit (544,616) -- Debt proceeds 875,000 -- Proceeds from issuance (repurchase) of common stock 350,000 (554,750) ------------------------------ Net cash provided by/(used in) financing activities 680,384 (554,750) ------------------------------ Increase (decrease) in cash and cash equivalents (2,493,366) (1,225,360) Cash and cash equivalents at beginning of year 3,834,023 2,354,625 ------------------------------ Cash and cash equivalents at end of year $ 1,340,657 $ 1,129,265 ==============================
Harmony Holdings, Inc. Notes to Consolidated Financial Statements (unaudited) December 31, 1998 Note 1 Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals with the exception of the adjustments discussed in Note 2) considered necessary for a fair presentation have been included. Operating results for the six-month period ended December 31, 1998 are not necessarily indicative of the results that may be expected for the year ended June 30, 1999. For further information, refer to the consolidated financial statements and footnote thereto included in the Company's Form 10-K for the year ended June 30, 1998. Note 2 Significant Transactions During Fiscal Year Ending June 30, 1999 The following significant transactions occurred during the first six months of the fiscal year ending June 30, 1999 and are considered not-recurring: A. In July 1998, Children's Broadcasting Corporation ("CBC") purchased 250,000 shares of the Company's common stock on the open market. The purchase of these shares resulted in an increase in CBC's ownership of the Company to approximately 44.1%. B. In July 1998, the Company replaced its then existing bank line of credit with an asset-based loan and security agreement with Heller Financial, Inc. ("Heller"). This loan and security agreement provides for the following borrowings: a revolving line of credit with maximum availability of $4,500,000 based on acceptable accounts receivable, which line of credit bears interest at a variable rate (9.25% at December 31, 1998); and a $500,000 term note to be disbursed at the sole discretion of Heller. The loan and security agreement requires the Company to comply with certain restrictive covenants and is guaranteed by CBC. C. In November 1998, CBC made an equity investment in the Company of $350,000 by purchasing 269,231 shares of the Company's common stock for a price of $1.30 per share. CBC's also purchased an additional 225,000 shares of the Company's common stock from individual shareholders. CBC's ownership in the Company is now approximately 49.1%. D. In November 1998, the Company announced and began the process of discontinuing operations of its Harmony Pictures division. This division consists of Harmony Pictures, Inc., Melody Films, Inc., Lexington Films, Inc., and Pure Films, Inc. During the last fiscal year, this division recorded revenues of $10,867,000 and operating losses of $1,625,000. Results of operations for the division for the three and six months ended December 1998 and 1997 were: Three Months Ended Six Months Ended 12/31/98 12/31/97 12/31/98 12/31/97 -------------------- -------------------- Revenues $715,000 $3,350,000 $1,855,000 $5,801,000 Operating Loss $(217,000) $(184,000) $(812,000) $(592,000) In connection with discontinuing the division's operations, management has estimated and accrued restructuring costs totaling $888,000. These costs were accrued when the discontinuance decisions were announced and the restructure costs could be reasonably estimated. These costs include severance payments, contract buyouts, lease obligations, non-refundable prepayments, and general office shut-down logistics. The Company believes all obligations will have been met by the close of the third quarter ending March 31, 1999. Upon reaching the decision to discontinue the division's operations, management determined that the goodwill associated with the divisions was fully impaired. Accordingly, an impairment charge equaling the net book value of the goodwill, $2,215,000 was recognized in the quarter ended December 31, 1998. E. In November and December 1998, CBC advanced the Company working capital of $75,000, $500,000, $200,000, and $100,000 in four separate transactions. These advances are evidenced by four promissory notes, each due within 30 days of after demand and each bearing interest at a rate of 10% per annum. F. In January 1999, CBC advanced the Company working capital of $75,000, $1,100,000 and $900,000 in three separate transactions. These advances are evidenced by three promissory notes, each due within 30 days after demand and each bearing interest at a rate of 10% per annum. G. In February 1999, the Company filed a report on Form 8-K with the Securities and Exchange Commission announcing that effective as of close of business on February 9, 1999, the Company's shares of common stock were removed from the Nasdaq SmallCap Market and are now being traded on the OTC Bulletin Board which is run and operated by Nasdaq. This action was a result of the Company falling below the net tangible asset threshold required to remain listed on the Nasdaq SmallCap Market. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Statements in this report that are forward-looking are based on current expectations, and actual results may differ materially. Forward-looking statements involve numerous risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the possibilities that the demand for the Company's services may decline as a result of possible changes in general and industry specific economic conditions and the effects of competitive pricing and such other risks and uncertainties as are described in this report on Form 10-Q and other documents previously filed or hereafter filed by the Company from time to time with the Securities and Exchange Commission. Overview During the periods reported herein, the Company operated through four major groups, or divisions. Each division consists of one of the Company's subsidiaries, which subsidiary in turn may operate one or more of its own subsidiaries. The four principal subsidiaries that represent the major operating divisions are The End, Inc. ("The End"), The End (London), LTD. ("The End (London)"), Curious Pictures Corporation ("Curious Pictures"), and Harmony Pictures, Inc. ("Harmony Pictures"). The End (London) was formed in 1997 and, as a start-up company, did not contribute to the Company's overall operations during the six months ended December 31, 1997 to the extent it has as a fully operational division during the six months ended December 31, 1998. During the second quarter of fiscal year 1999, the Company discontinued the operations of Harmony Pictures. The three remaining principal subsidiaries continue to recognize increasing revenues and are fully operational. Results of Operations: Three and Six months Ended December 31, 1998 Compared to Three and Six Months Ended December 31, 1997: The Company's total revenues increased $2,739,000 or 24% from $11,341,000 in the second quarter of fiscal year 1998 to $14,080,000 in the second quarter of fiscal year 1999. Revenues during the first half of the current year increased 38% from $22,720,000 at December 31, 1997 to $31,384,000 at December 31, 1998. This increase in revenue represents revenue increases of $5.7 million by The End (London), $3.9 million by The End, and $3.2 million by Curious Pictures. These increases are due primarily to the improved resources with which the subsidiaries are able to attract and retain directors. Revenue decreased at Harmony Pictures $4.0 million during the first half of the current year. As mentioned above, the Company has discontinued the operations of Harmony Pictures. Cost of production is directly related to revenues and includes all direct costs incurred in connection with the production of television commercials including film, crews, location fees and commercial directors' fees. Cost of production as a percentage of revenues increased from approximately 81% to 87% during the second quarter of fiscal year 1999 compared to the same period of fiscal year 1998, and increased from 80% to 85% during the first half of the current fiscal year compared to the first half of fiscal year 1998. This increase is due to bids submitted by the Company at lower margins than the previous year in an attempt to increase operating revenues and, in part due to the cost of revenues of Harmony Pictures, which exceeded 89% of Harmony Pictures' contract revenues during the six months ended December 31, 1998. As a result of the increase in the cost of production, gross margins as a percentage of revenues decreased from 19% for the quarter ended December 31, 1997 to 13% in the quarter ended December 31, 1998, and decreased from 20% for the six months ended December 31, 1997 to 15% for the same period ending December 31, 1998. Selling expenses consist of sales commissions, advertising and promotional expenses, travel and other expenses incurred in the securing of television commercial contracts. Selling expenses totaled $817,000 in the second quarter of fiscal year 1999 compared to $567,000 in the second quarter of fiscal year 1998, an increase of 44%. During the first half of fiscal year 1999, these expenses increased 36% compared to the same period in fiscal year 1998 due primarily to expenses related to The End (London), which incurred only $50,000 of selling expenses during the first half of the last fiscal year compared to $500,000 during the current fiscal year. General and administrative expenses consist of overhead costs such as office rent and expenses, executive, general and administrative payroll, and related items. General and administrative expenses decreased $363,000 in the second quarter of fiscal year 1999 to $1,808,000 as compared to $2,171,000 for the second quarter of fiscal year 1998. These expenses decreased 8% during the first six months of fiscal year 1999 as compared to the same period in fiscal year 1998 due primarily to the cessation of operations at Harmony Pictures. During comparable six-month periods of fiscal year 1999 and fiscal year 1998, general and administrative expenses at Harmony Pictures decreased $497,000 due to the discontinuation of its operations. While these expenses increased somewhat at the remaining three divisions, general and administrative expenses decreased $6,000 at the corporate level. The $109,000 stock option compensation expense reported during the quarter ended December 31, 1998 and $218,000 reported for the six months ended December 31, 1998 represent a non-cash charge resulting from certain managers of Curious Pictures earning stock options under a December 15, 1996 agreement between the Company and the managers. Depreciation and amortization expense increased in the second quarter of fiscal year 1999 by 52% and in the first half of fiscal year 1999 by 35% compared to the same periods of fiscal year 1998 due to the increase in depreciable assets. Upon reaching the decision to discontinue the Harmony Pictures division, management determined that the goodwill associated with the division was fully impaired. Accordingly, an impairment charge of $2,215,000 was recognized in the current quarter. This current period charge will decrease the Company's future amortization expense and is combined with other restructuring costs of $1,317,000 on the accompanying income statement. The restructuring costs relate to the incremental costs of discontinuing the division and include severance payments, contract buyouts, lease obligations, non-refundable prepayments, and general office shut down logistics. Interest income increased slightly during the three and six months ended December 31, 1998 compared to similar periods ending December 31, 1997. This increase is due to cash balances being held longer at Curious Pictures and The End (London). Interest expense for the second quarter of fiscal year 1999 was $98,000, an increase of $89,000 over the second quarter of fiscal year 1998. During the first half of fiscal year 1999, interest expense increased $205,000 from $12,000 to $217,000 as a result of increased borrowings by the Company under the new credit facility the Company entered into with Heller in July 1998. No income tax expense was recorded in the second quarter of fiscal year 1999 and income tax expense decreased to $10,000 from $23,000 during the first six months of fiscal year 1999 compared to the same period of fiscal year 1998. The Company's effective income tax rate varied from the statutory federal tax rate as a result of state taxes and an increase in the valuation allowance booked against the deferred tax asset. A valuation allowance has been established for the full amount of the Company's net deferred tax asset, as the Company cannot determine that it is more likely than not that the deferred tax assets (primarily net operating loss carryforwards) will be realized. The Company as a whole incurred net losses of $4,840,000 and $5,348,000 for the three and six-month periods ended December 31, 1999 respectively. The losses include the restructuring and asset impairment costs totaling $3,532,000 related to the discontinued operations of Harmony Pictures. During the first half of fiscal year 1999, the Company would have generated a net loss of only $1,004,000 if it were not for the activities of Harmony Pictures. Liquidity and Capital Resources The Company's liquidity, as measured by its working capital, was a deficit of $3,553,000 at December 31, 1998 compared to a deficit of $689,000 at June 30, 1998. In July 1998, the Company replaced its bank line of credit with an asset based loan and security agreement with Heller (see Note 2.B of the financial statements). As part of this agreement, the Company is allowed to borrow from a revolving line of credit, with a maximum availability of $4,500,000 or a percentage of acceptable accounts receivable. The interest rate is variable (9.25% at December 31, 1998). At December 31, 1998, the Company had a $2,205,000 balance due on the line of credit. As the Company's operations have not been able to support its working capital needs, CBC, the Company's principal stockholder, has resolved to invest such funds in the Company as necessary to meet its working capital requirements through June 30, 1999. This may involve loans or the purchase of securities. In November 1998, CBC made an equity investment in the Company of $350,000 by purchasing 269,231 shares of the Company's common stock for a price of $1.30 per share. CBC's ownership in the Company is now approximately 49.1%. Throughout November and December 1998, CBC advanced the Company an aggregate of $875,000 as evidenced by four promissory notes, each due within 30 days of demand and each bearing interest at a rate of 10% per annum. Additionally, in January CBC advanced the Company an aggregate of $2,075,000 as evidenced by three promissory notes bearing the same terms described above. In November 1998, management of the Company determined it was in the best interest of the Company to discontinue the operations of the Harmony Pictures division. The division consists of Harmony Pictures, Inc., Melody Films, Inc., Lexington Films, Inc. and Pure Film, Inc. For the year ended June 30, 1998, those entities recorded revenues of $10,867,000 and an operating loss of $1,625,000. For the six months ended December 31, 1998, those entities recorded revenues of $1,855,000 and an operating loss of $812,000. An additional one-time restructuring expense of approximately $1,317,000 related to the discontinued operations of the division was recorded in quarter ended December 31, 1998. Additionally, management determined that the goodwill associated with the division was fully impaired. Accordingly, an impairment charge equaling the net book value of the goodwill, $2,215,000 was recognized in the current quarter. The Company believes that by discontinuing operations at the Harmony Pictures division it will be able to meet its working capital requirements in the future. Consolidated cash was $1,341,000 at December 31, 1998 and $3,834,000 at June 30, 1998, a decrease of $2,493,000. Cash used in operating activities for the six months ended December 31, 1998 was $2,632,000. Accounts receivable at December 31, 1998 decreased $2,856,000 from June 30, 1998, and other current assets at December 31, 1998 increased $580,000 from June 30, 1998. Accounts payable at December 31, 1998 increased $543,000 from June 30, 1998, accrued expenses decreased $3,345,000 from June 30, 1998 to December 31, 1998, and deferred income decreased $553,000 during that same period. During the six months ended December 31, 1998, cash used in investing activities was $541,000. This represents cash used for capital expenditures incurred in the normal course of operations, less the payment of the note receivable due the Company from a former officer. Cash provided by financing activities during the six months ended December 31, 1998 was $680,000 which was provided through the cash borrowings from CBC and the proceeds from the issuance of common stock to CBC, net of repayment of the line of credit referred to in Note 2.B of the financial statements. During the six months ended December 31, 1998, the Company incurred a net loss of $5,348,000 and a cash flow from operations deficit of $2,632,000, resulting in a working capital deficit of $3,553,000 and an accumulated deficit totaling $16,992,000 at December 31, 1998. At this time the Company's only firm external financing resource other than its existing asset based loan and security agreement, which requires that the Company maintain minimum stockholders equity of $3,000,000, is the commitment CBC has made to fund the Company's working capital needs through the end of the current fiscal year. The Company is currently taking steps to curtail its level of net operating losses by discontinuing the operations of the Harmony Pictures division. If the losses are not curtailed, the Company risks losing its line of credit and will need to rely solely on CBC until other financing options become available. In order to obtain the proceeds that the Company expects it may need during the next year, the Company intends to attempt to raise additional debt and/or equity financing. The Company is currently holding discussions with various possible financing sources and believes that the requisite financing can be obtained. However, no assurance can be given that the Company will, in fact, be able to obtain additional financing or that the terms of such financing will be favorable to the Company. The Company believes that both the expected benefits to be derived from the current restructuring of the Company's operations, including the discontinuation of operation at the Harmony Pictures division, the expected level of operations during the next year, and the continued support of CBC may offset some or all of any liquidity shortage that may occur. Inflation Inflation has not had a significant effect on the Company. Year 2000 Compliance The Year 2000 Issue is the result of computer programs being written using two digits rather than four to define the applicable year. Any of the Company's compute programs that have date-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure of miscalculations causing disruptions or operations, including, among other things, a temporary inability to process transactions, send invoices, or engage in similar business activities. Management has made an assessment of its systems and has been advised by its computer consultant that its systems are Year 2000 compliant. Management also believes that its television production equipment will not be impacted by the Year 2000 Issue because the equipment is not date sensitive. Additionally, management believes it will not be materially impacted by the Year 2000 compliance of third parties with which it conducts business. 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 on May 14, 1999. HARMONY HOLDINGS, INC. BY: /s/ James G. Gilbertson ------------------------------ James G. Gilbertson ITS: Chief Operation Officer and Chief Financial Officer EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS JUN-30-1999 JUL-01-1998 DEC-31-1998 1,340,657 0 3,814,037 0 0 7,008,526 2,477,621 (108,374) 10,009,690 10,561,308 0 0 0 75,067 (626,685) 10,009,690 31,384,284 31,384,284 26,828,754 26,828,754 9,707,070 0 217,210 (5,338,825) 9,601 (1,815,931) (3,532,495) 0 0 (5,348,426) (0.73) 0
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