-----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, CMmM79Vc51FZyZCtxYwpyZTpQOwqcJiNDpiiflw0QAuf6XC/taM5uDqjINdqTa5B V+WkgVV1G6x7gojc7ArySw== 0000912057-97-031359.txt : 19970924 0000912057-97-031359.hdr.sgml : 19970924 ACCESSION NUMBER: 0000912057-97-031359 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970923 SROS: NASD SUBJECT COMPANY: 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: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-42207 FILM NUMBER: 97683947 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: 1990 WESTWOOD INC CITY: LOA ANGLES STATE: CA ZIP: 90025 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CHILDRENS BROADCASTING CORP CENTRAL INDEX KEY: 0000882160 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 411663712 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 724 1ST ST N STREET 2: 4TH FLOOR CITY: MINNEAPOLIS STATE: MN ZIP: 55401 BUSINESS PHONE: 6123383300 MAIL ADDRESS: STREET 1: 724 FIRST STREET NORTH STREET 2: FOURTH FLOOR CITY: MINNEAPOLIS STATE: MN ZIP: 55401 SC 13D/A 1 SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (RULE 13d-101) UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)* Harmony Holdings, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 41322310 - -------------------------------------------------------------------------------- (CUSIP Number) Avron L. Gordon, Esq. Brett D. Anderson, Esq. Briggs and Morgan, P.A. 2400 IDS Center Minneapolis, MN 55402 (612) 334-8400 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 19, 1997 - -------------------------------------------------------------------------------- (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 which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /. ___________________________ *The remainder of this cover page shall be filed 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). (Continued on following pages) (Page 1 of 11 Pages) - ---------------------------- ------------------------ CUSIP No. 41322310 13D Page 2 of 11 Pages - ---------------------------- ------------------------ - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Children's Broadcasting Corporation 41-1663712 - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* BK - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / / PURSUANT TO ITEMS 2(D) OR 2(E) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Minnesota - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER 2,938,731 NUMBER OF ------------------------------------------------------ SHARES 8 SHARED VOTING POWER BENEFICIALLY EACH 0 OWNED BY ------------------------------------------------------ REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 2,938,731 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 0 - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,938,731 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 40.7% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - ------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! Item 1: Security and Issuer. The title of the class of equity securities to which this statement relates is Common Stock. The issuer of such securities is Harmony Holdings, Inc. ("Harmony"), a Delaware corporation, with its principal executive offices at 1990 Westwood Boulevard, Suite 310, Los Angeles, California 90025. Item 2: Identity and Background. This statement is filed by Children's Broadcasting Corporation (the "Company"), a Minnesota corporation, which is a full-time national broadcaster of children's radio in the United States with its principal business and principal executive offices at 724 First Street North, Minneapolis, Minnesota 55401. The attached Schedule I is a list of the executive officers and directors of the Company which contains the following information regarding each person listed on such schedule: (a) name; (b) residence or business address; (c) present principal occupation or employment and, if other than Children's Broadcasting Corporation, the name, principal business and address of any corporation or other organization in which such employment is conducted; and (d) citizenship. During the past five years, neither the Company nor, to the best of the Company's knowledge, any person named in Schedule I has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which it was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3: Source and Amount of Funds or Other Consideration. On September 19, 1997, the Company and Glenn B. Laken ("Laken") negotiated and reached an agreement in principle whereby Laken offered to sell, and the Company agreed to buy, 420,000 shares of Common Stock of Harmony from Laken at $3.15 per share (the "Laken Shares"), 399,500 shares of Common Stock of Harmony from others who are acting together with Laken at $2.70 per share (the "Laken Control Group Shares"), and options to (Page 3 of 11 Pages) purchase 200,000 shares of Common Stock of Harmony from Laken (the "Options") at an exercise price of $1.50 per share for $330,000 (collectively, the "Transaction"). The closing on the Transaction is expected to occur within five business days of the date of this Schedule 13D. At such time, the definitive stock purchase agreement will be filed as an exhibit. Funds for the Transaction will originate from an amended loan and security agreement with Foothill Capital Corporation. Item 4: Purpose of Transaction. The Common Stock to be acquired by the Company pursuant to the Transaction will be acquired for investment purposes and to increase its voting power. The Reporting Person has also reached an agreement in principle for the future acquisition of up to 425,000 additional shares of Common Stock of Harmony at a price of $2.50 per share. The Reporting Person reserves the right to purchase additional shares or to sell shares if it deems such action to be in its best interest. Other than the information disclosed above, the Company does not presently have plans or proposals which relate to, or would result in, any of the matters listed in Paragraphs (a) through (j) of Item 4 of Schedule 13D. Item 5: Interest in Securities of the Issuer. (a) Following completion of the Transaction, excluding any shares which may be acquired pursuant to the agreement in principle described in Item 4, the Reporting Person will beneficially own 2,939,731 shares of Common Stock of Harmony, including 750,000 shares of Common Stock subject to currently exercisable options, which constitute approximately 40.7% of the outstanding Common Stock of Harmony. (b) Following completion of the Transaction, excluding any shares which may be acquired pursuant to the agreement in principle described in Item 4, the Reporting Person will have the sole power to vote or to direct the vote and the sole power to dispose or to direct the disposition of 2,938,731 shares of Common Stock of Harmony. (c) Not applicable. (d) Not applicable. (e) Not applicable. (Page 4 of 11 Pages) Item 6: Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. It is expected that the definitive stock purchase agreement between the parties to the Transaction will provide that neither Laken nor the Laken Control Group will acquire any securities of Harmony or the Reporting Person for a period of five years. Item 7: Material to be Filed as Exhibits. 99.1 Letter Agreement between Children's Broadcasting Corporation and Glenn B. Laken, dated September 19, 1997. (Page 5 of 11 Pages) SIGNATURE After reasonable inquiring and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: September 22, 1997 CHILDREN'S BROADCASTING CORPORATION By: /s/ Christopher T. Dahl ---------------------------------------- Christopher T. Dahl Chairman of the Board, President and Chief Executive Officer (Page 6 of 11 Pages) Schedule I Executive Officers and Directors of Children's Broadcasting Corporation The name, business address, principal occupation or employment and citizenship of each executive officer and director is set forth below. Residence Address or Principal Business Occupation or Address and, if Employment or Citizenship different, Address Principal or Place of Name of Principal Office Business Organization - ------------------- ------------------- --------------- ------------ EXECUTIVE OFFICERS: Christopher T. Dahl 724 First Street North President, Chief U.S.A. Minneapolis, MN 55401 Executive Officer and Chairman of the Board James G. Gilbertson 724 First Street North Chief Operating U.S.A. Minneapolis, MN 55401 Officer, Chief Financial Officer and Treasurer Lance W. Riley 724 First Street North General Counsel U.S.A. Minneapolis, MN 55401 and Secretary Gary W. Landis 724 First Street North Executive Vice U.S.A. Minneapolis, MN 55401 President of Programming Melvin E. Paradis 724 First Street North Executive Vice U.S.A. Minneapolis, MN 55401 President of Operations Barbara A. McMahon 724 First Street North Executive Vice U.S.A. Minneapolis, MN 55401 President of Affiliate Relations Rick E. Smith 724 First Street North Executive Vice U.S.A. Minneapolis, MN 55401 President of National Sales Denny J. Manrique 724 First Street North Executive Vice U.S.A. Minneapolis, MN 55401 President of Sales Development (Page 7 of 11 Pages) DIRECTORS: Christopher T. Dahl 724 First Street North President, Chief U.S.A. Minneapolis, MN 55401 Executive Officer and Chairman of the Board Richard W. Perkins 730 East Lake Street President and U.S.A. Wayzata, MN 55391 CEO of Perkins Capital Management, Inc. (a registered investment adviser) Rodney P. Burwell 7901 Xerxes Ave. S. Chairman of U.S.A. Minneapolis, MN 55431 Xerxes Corporation (a manufacturer of fiberglass tanks) Mark A. Cohn 7101 Winnetka Ave. N. Co-founder and U.S.A. Minneapolis, MN 55428 CEO of Damark International, Inc. (a direct marketer of brand name and general merchandise products) Russell Cowles II (1) 2754 W. Lake of the Trustee of the U.S.A. Isles Pkwy. Cowles Family Minneapolis, MN 55416 Voting Trust (holder of a majority share of the voting stock of Cowles Media Corporation, a newspaper, magazine and book publisher and information service provider) - ---------------------- 1 Subject to the approval of the Federal Communications Commission. (Page 8 of 11 Pages) Exhibit Index Exhibit Number Description - --------- --------------------------------------------------------- 99.1 Letter Agreement between Children's Broadcasting Corporation and Glenn B. Laken, dated September 19, 1997. (Page 9 of 11 Pages) EX-99.1 2 EXHIBIT 99.1 EXHIBIT 99.1 (612) 334-8455 September 19, 1997 goravr@email.briggs.com Steven B. Nagler, Esq. VIA FAX -- (847) 945-0329 c/o Siegel & Capitel, Ltd. 2275 Half Day Road, Suite 320 Bannockburn, IL 60015 Re: GLENN B. LAKEN/LAKEN COMMITTEE/PURCHASE OF SHARES Dear Mr. Nagler: This letter will confirm that Children's Broadcasting Corporation accept[s] your client's offer to sell their interests in Harmony Holdings, Inc. ("HHI") on the following terms: 1. Our client will purchase Mr. Laken's options for the purchase of 200,000 shares exercisable at $1.50 per share for the total sum of $330,000. 2. Our client will purchase from Mr. Laken 420,000 shares of HHI common stock for $3.15 per share, or an aggregate of $1,323,000. 3. Our client will purchase 399,500 shares from the Laken Control Group at $2.70 per share or an aggregate of $1,078,650. This involves a total purchase price of $2,731,650. Our client advises me that it is prepared to negotiate and enter into the definitive agreement as soon as practicable and to close next week. I will have a draft to you soon. As stated on the telephone this afternoon, the acceptance is subject to approval by our client's board because the number of shares is greater than its previous authorization. This approval is expected on Monday. The acceptance is also subject to approval by Foothill Capital Corporation, which approved our client's financing based upon the lesser number of shares previously offered. Mr. Dahl will seek this financing by Monday. I have informed him of your client's requirement that the Foothill approval be obtained on Monday. This letter will also confirm that, with respect to the 425,000 non-Control Group shares offered to Children's, a buyer has been found for 200,000 of such shares and Children's Broadcasting Corporation is willing to enter into a put agreement to purchase (Page 10 of 11 Pages) such shares at $2.50 per share upon the demand of the holders thereof at any time on or after January 31, 1998, or such earlier date as our client closes on the sale of its radio stations to Global Broadcasting Company. If our client does not close on the sale [to] Global Broadcasting Company by January 31, 1998, our client can extend the date for purchase of such shares pursuant to the put to March 31, 1998. Our client would also have the right to purchase the non-Control Group shares at $2.50 per share at any time prior to March 31, 1998. The foregoing put and call arrangement would terminate if at any time the bid price for HHI common stock is $2.50 per share or more for seven consecutive trading days. If you have any questions concerning the foregoing summary, please call me. Very truly yours, /s/ Avron L. Gordon Avron L. Gordon ALG/kmt cc: Christopher T. Dahl Lance W. Riley, Esq. Greg Joseph, Esq. (Page 11 of 11 Pages) -----END PRIVACY-ENHANCED MESSAGE-----