-----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, TSrbr+zA2lahRnClOGRI/L2FF2xsYDsX6LzOmbNBCIjXrvgl+nGnifY1ze8V1u16 zTSuSkX9zVwgGLoHj19y7g== 0000897101-97-000064.txt : 19970203 0000897101-97-000064.hdr.sgml : 19970203 ACCESSION NUMBER: 0000897101-97-000064 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960619 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970131 SROS: NASD FILER: 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: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-21534 FILM NUMBER: 97516120 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 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A AMENDMENT TO REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 June 18, 1996 Date of Report (Date of earliest event reported) CHILDREN'S BROADCASTING CORPORATION (Exact name of registrant as specified in its charter) Minnesota 0-21534 41-1663712 (State or other jurisdiction (Commission File No.) (IRS Employer ID No.) of incorporation) 724 First Street North Minneapolis, Minnesota 55401 (Address of principal executive offices) (612) 338-3300 (Registrant's telephone number, including area code) The undersigned registrant hereby amends the following items, financial statements, pro forma financial information and exhibits, if any, or other portions of its Form 8-K Report filed June 18, 1996, as set forth in the pages attached hereto. Item 7. Financial Statements and Exhibits. (a) Financial Statements of Business Acquired. Financial statements required to be filed pursuant to Item 7 of Form 8-K filed June 18, 1996, for WCAR-AM, Livonia, Michigan. (b) Pro Forma Financial Information. Pro forma financial information required to be filed pursuant to Item 7 of Form 8-K filed June 18, 1996, for Children's Broadcasting Corporation. (c) Exhibits Consent of Kleiman, Carney & Greenbaum. WOLPIN BROADCASTING COMPANY BALANCE SHEETS ASSETS December 31, March 31, 1995 1996 (Audited) (Unaudited) -------- -------- Current Assets Cash $ 2,102 $ 23,344 Accounts Receivable (Including Barter Of $9,231 In 1996 And $13,216 In 1995) 38,624 29,619 Prepaid Expenses 10,468 4,766 -------- -------- Total Current Assets 51,194 57,729 -------- -------- Property And Equipment Broadcasting Equipment 282,341 282,341 Leasehold Improvements 24,387 24,387 Office Furniture And Equipment 31,227 31,227 Vehicle 500 500 -------- -------- 338,455 338,455 Less: Accumulated Depreciation 329,156 329,867 -------- -------- Property And Equipment At Depreciated Cost 9,299 8,588 -------- -------- Other Asset License And Goodwill 273,465 273,465 -------- -------- Total Assets $333,958 $339,782 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Note Payable - Bank $ -- $ 25,000 Accounts Payable Trade 16,374 20,973 Barter And Deposits 30,718 20,534 Employees' Deduction For Withheld Taxes 1,293 776 Accrued Expenses Salaries And Wages 3,634 6,433 Taxes, Other Than Income 1,851 1,089 -------- -------- Total Current Liabilities 53,870 74,805 -------- -------- Stockholders' Equity Common Stock, $1 Par Value; 200,000 Shares Authorized; Issued And Outstanding, 75,000 Shares 75,000 75,000 Retained Earnings 205,088 189,977 -------- -------- Total Stockholders' Equity 280,088 264,977 -------- -------- Total Liabilities And Stockholders' Equity $333,958 $339,782 ======== ======== SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS WOLPIN BROADCASTING COMPANY STATEMENTS OF INCOME
Year Ended December 31, Three Months Ended March 31, ----------------------- --------------------------- 1994 1995 1995 1996 (Audited) (Audited) (Unaudited) (Unaudited) -------- -------- -------- -------- Sales Station Time (Including $57,433 Barter Sales In 1994, $57,502 In 1995 And $17,316 In 1996) $643,441 $575,252 $147,949 $108,208 Less: Commissions - Agencies 10,110 9,211 2,066 1,534 -------- -------- -------- -------- Net Sales $633,331 $566,041 $145,883 $106,674 -------- -------- -------- -------- Operating Expenses Technical 116,027 100,992 18,626 28,885 Program 15,624 16,869 3,277 3,706 Selling 110,274 106,009 32,801 22,219 General And Administrative 264,247 251,158 62,197 66,975 -------- -------- -------- -------- Total Operating Expenses 506,172 475,028 116,901 121,785 -------- -------- -------- -------- Net Income $127,159 $ 91,013 $ 28,982 ($ 15,111) ======== ======== ======== ========
See Accompanying Notes To Financial Statements WOLPIN BROADCASTING COMPANY STATEMENTS OF RETAINED EARNINGS
Year Ended December 31, Three Months Ended March 31, ----------------------- --------------------------- 1994 1995 1995 1996 (Audited) (Audited) (Unaudited) (Unaudited) -------- -------- -------- -------- Balance, Beginning Of Year $196,916 $229,075 $229,075 $205,088 Addition Net Income 127,159 91,013 28,982 -- -------- -------- -------- -------- 324,075 320,088 258,057 205,088 Deduction Stockholders' Distributions/net Loss 95,000 115,000 -- (15,111) -------- -------- -------- -------- Balance, End Of Period $229,075 $205,088 $258,057 $189,977 ======== ======== ======== ========
See Accompanying Notes To Financial Statements WOLPIN BROADCASTING COMPANY STATEMENTS OF CASH FLOWS
Year Ended December 31, Three Months Ended March 31, ------------------------- ------------------------ 1994 1995 1995 1996 (Audited) (Audited) (Unaudited) (Unaudited) --------- --------- --------- --------- Operating Activities Net Income/(loss) $127,159 $ 91,013 $ 28,982 ($ 15,111) Charges To Net Income, Not Requiring The Use Of Cash Depreciation 3,156 2,350 505 711 Loss On Disposal Of Equipment 686 -- -- -- Change In Operating Assets And Liabilities That Provide (Use) Cash Accounts Receivable And Prepaid Expenses (858) (4,102) 5,527 14,707 Accounts Payable, Accrued Expenses And Employees' Deductions For Withheld Taxes (11,162) (17,765) 17,858 (4,065) --------- --------- --------- --------- Cash Provided By Operating Activities 118,981 71,496 52,872 (3,758) --------- --------- --------- --------- Financing Activities Proceeds Of Note Payable -- -- -- 25,000 --------- --------- --------- --------- Cash Provided By Financing Activities -- -- -- 25,000 --------- --------- --------- --------- Investing Activities Proceeds From Sale Of Equipment 300 -- -- -- Purchase Of Property And Equipment (500) (5,664) -- -- Stockholders' Distributions (95,000) (115,000) -- -- --------- --------- --------- --------- Cash Used By Investing Activities (95,200) (120,664) -- -- --------- --------- --------- --------- Increase (Decrease) In Cash 23,781 (49,168) 52,872 21,242 Cash, Beginning Of Year 27,489 51,270 51,270 2,102 --------- --------- --------- --------- Cash, End Of Period $ 51,270 $ 2,102 $ 104,142 $ 23,344 ========= ========= ========= ========= Supplemental Cash Flow Disclosure Cash Paid During The Period For Interest $ -- $ -- $ -- $ 137 ========= ========= ========= =========
See Accompanying Notes To Financial Statements WOLPIN BROADCASTING COMPANY NOTES TO FINANCIAL STATEMENTS For The Year Ended December 31, 1995 And The Quarter Ended March 31, 1995 Note 1 - Summary Of Significant Accounting Policies Business Activity The corporation owns and operates an am radio station in Garden City, Michigan. Property and Depreciation All tangible property is recorded at cost. Expenditures for maintenance and repairs are charged to operations in the year incurred. Property is depreciated over the following estimated useful lives, using the designation methods of depreciation: Broadcasting Equipment 7 Years 200% Declining Balance Leasehold Improvements 15 Years 150% Declining Balance Office Furniture And Equipment 5-7 Years 200% Declining Balance Vehicle 5 Years 200% Declining Balance License and Goodwill The license and goodwill represents a portion of the costs paid in May, 1969 to acquire the broadcasting business from its preceding owner. Federal Income Tax The stockholders of the corporation have elected under Section 1362(a) of the internal revenue code to be taxed as an S corporation and, accordingly, no income tax provision is accrued herein. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Note 2 - Related Entity Wolpin Broadcasting Company pays rent on a month to month basis, for its premises to an entity which is related to the corporation by controlled ownership. The annual rental payments are $18,000. Note 3 - Note Payable - Bank At March 31, 1996 the note payable to a bank represents the outstanding balance of a $50,000 line of credit, expiring September, 1996. The note is unsecured and personally guaranteed by the majority stockholder. Interest is payable quarterly at the prime rate. Note 4 - Subsequent Event In January, 1996, the company entered into an agreement to sell substantially all of its assets for $1,260,000. A deposit of $100,000 towards the sale is being held by the company's legal counsel. The closing is scheduled to take place in early June, 1996. Unaudited pro forma financial position as if the acquisitions had occurred March 31, 1996 would be:
Radio Pro forma Combined Wolphin Pro forma CBC Elizabeth Adjustments Total Broadcasting Adjustments Total ----------- ---------- ----------- ----------- ---------- ---------- ----------- March 31, 1996: Current assets $16,868,827 $ 327,412 $ -- $17,196,239 $ 57,729 $ (57,729)(2) $17,196,239 Deffered expenses 1,978,890 1,978,890 1,978,890 Property and equipment 3,033,401 152,088 137,912 (1) 3,323,401 8,588 306,412 (2) 3,638,401 Broadcast licenses 4,913,259 26,351 10,801,688 (1) 15,741,298 273,465 911,535 (2) 16,926,298 Other assets 1,305,215 1,305,215 1,305,215 ----------- ---------- ----------- ----------- ---------- ---------- ----------- Total assets $28,099,592 $ 505,851 $10,939,600 $39,545,043 $ 339,782 $1,160,218 $41,045,043 =========== ========== =========== =========== ========== ========== =========== Current liabilities $ 3,062,072 $1,032,068 $(1,032,168)(1) $ 3,061,972 $ 74,805 $ (74,805)(2) $ 3,061,972 Long-term debt 662,447 662,447 662,447 Other liabilities 50,899 50,899 50,899 Redeemable convertible 0 preferred stock 2,286,386 2,286,386 2,286,386 Shareholders' equity (deficit) 22,037,788 (526,217) 11,971,768 (1) 33,483,339 264,977 1,235,023 (2) 34,983,339 ----------- ---------- ----------- ----------- ---------- ---------- ----------- Total liabilities and shareholders' equity $28,099,592 $ 505,851 $10,939,600 $39,545,043 $ 339,782 $1,160,218 $41,045,043 =========== ========== =========== =========== ========== ========== ===========
Pro forma adjustments to financial position: (1) Purchase accounting adjustments associated with the acquisition of Radio Elizabeth, Inc.,including: (i) adjustment of property and equipment to a fair market value of $290,000 (ii) seller obligation to repay all liabilities out of the proceeds of the sale totalling $1,032,068 at March 31, 1996; (iii) common stock valued at $11,500,000 to be issued to finance the purchase and (iv) $10,828,039 of broadcast license value purchased, allocated $750,000 to 1530 AM and $10,087,039 to 1660 AM. (2) Purchase accounting adjustments associated with the acquisition of Wolpin Broadcasting Company,including: (1) seller to retain title to all current assets (ii) adjustment of existing property and equipment to a fair market value of $75,000 and record land purchased in conjunction with the acquisition valued at $240,000 (iii) $1,185,000 of broadcast license value purchased (iv) seller obligation to repay all liabilities out of the proceeds of the sale totalling $74,805 at March 31, 1996; and (iii) common stock valued at $1,500,000 to be issued to finance the purchase.
Year Ended December 31, 1995: Children's Radio Wolpin Broadcasting Elizabeth, Pro Forma Combined Broadcasting Pro Forma Corporation Inc. Adjustments Total Company Adjustments Total ----------- ----------- ----------- ----------- ----------- ----------- ----------- Revenues $ 5,106,545 $ 405,173 $ (405,173)(1) $ 5,112,545 $ 566,041 $ $ 5,678,586 6,000 (4) -- Operating expenses (421,167)(1) 10,006,059 421,167 577,652 (2) 10,583,711 475,028 66,275(5) 11,125,014 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Income (loss) from operations (4,899,514) (15,994) (555,658) (5,471,166) 91,013 (66,275) (5,446,428) Reorganization items (28,751) 28,751 (1) 0 0 Interest expense, net (1,208,263) (35,480) 35,480 (1) (1,208,263) (1,208,263) Income taxes (55) 55 (1) 0 0 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Income (loss) $(6,107,777) $ (80,280) $ (491,372) $(6,679,429) $ 91,013 $ (66,275) $(6,654,691) =========== =========== =========== =========== =========== =========== =========== Net loss per share $ (2.22) $ (1.74) =========== =========== Weighted average number of shares outstanding 2,815,500 3,815,500 =========== =========== Three Months Ended March 31, 1996: Revenues $ 1,216,023 $ 78,964 $ (78,964)(1) $ 1,217,523 $ 106,674 $ $ 1,324,197 1,500 (4) Operating expenses 144,413 (2) 2,823,990 90,798 (90,798)(1) 2,968,403 121,785 85,781 3,175,969 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Income (loss) from operations (1,607,967) (11,834) (131,079) (1,750,880) (15,111) (85,781) (1,851,772) Reorganization items Interest expense, net (267,906) (9,998) 9,998 (1) (267,906) (267,906) Income taxes ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net Income (loss) $(1,875,873) $ (21,832) $ (121,081) $(2,018,786) $ (15,111) $ (85,781) $(2,119,678) =========== =========== =========== =========== =========== =========== =========== Net loss per share $ (0.63) $ (0.52) =========== =========== Weighted average number of shares outstanding 3,062,500 4,062,500 =========== ===========
Pro forma adjustments to operations: (1) Eliminate the revenue and operating expenses related to the operation of radio station WJDM 1530 AM to give effect for the local programming agreement. (2) Reflects an adjustment to depreciation and amortization expense related to property and equipment and broadcast licenses acquired from Radio Elizabeth, Inc. as if the transaction had occurred on January 1, 1995. Straight-line depreciation is calculated over eight years for equipment and the broadcast license is amortized over a twenty year life. (3) Pursuant to the terms of the agreement with the sellers of Radio Elizabeth, Inc. the final acquisition price paid at closing was reduced for all monthly LMA fees paid by CBC prior to closing. These payments, aggregating $320,000 have been reflected as part of the actual acquisition cost of Radio Elizabeth, Inc. to be consistent with the substance of the transaction. Accordingly, no pro-forma adjustment has been recorded for these payments. (4) LMA fee of $500 per month paid by the seller to CBC for the continued rights to broadcast on 1530 AM. (5) Reflects an adjustment to depreciation and amortization expense related to property and equipment and broadcast licenses acquired from Wolpin Broadcasting Company as if the transaction had occurred on January 1, 1995. Straight-line depreciation is calculated over eight years for equipment and the broadcast license is amortized over a twenty year life. SIGNATURE 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 thereunto duly authorized. CHILDREN'S BROADCASTING CORPORATION Date: January 31, 1997 By /s/ James G. Gilbertson ----------------------- James G. Gilbertson Chief Operating Officer and Treasurer EX-23 2 CONSENT January 30, 1997 Consent of Independent Auditors We consent to the use of our reports dated January 19, 1996, February 2, 1996 and May 30, 1996, with respect to the financial statements of Wolpin Broadcasting Company in the 8-K/A of Children's Broadcasting Corporation. Very truly yours, KLEIMAN, CARNEY & GREENBAUM /s/ Mark Carney MARK CARNEY Certified Public Accountant Farmington Hills, Michigan January 30, 1997 -----END PRIVACY-ENHANCED MESSAGE-----