SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 10, 1996
ASCENT ENTERTAINMENT GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-27192 52-1930707
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File No.) Identification No.)
One Tabor Center
1200 Seventeenth Street, Suite 2800
Denver, Colorado 80202
(Address of principal executive offices)
(303) 626-7000
(Registrant's telephone number, including area code)
Page 1 of 13 pages. The Exhibit Index appears on page 8.
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Item 2. Acquisition or Disposition of Assets
Acquisition of the Assets and Certain Liabilities of SpectraVision,
Inc. by On Command Corporation.
On October 10, 1996, Ascent Entertainment Group, Inc. ("Ascent") through its
subsidiary, On Command Corporation ("On Command"), consummated the previously
announced acquisition (the "Acquisition") of the assets and properties
(including, but not limited to, copyrights, patents, personal property, real
property, equipment and records) and certain liabilities of SpectraVision, Inc.
("SpectraVision"), with an effective date of October 8, 1996 (the "Closing
Date"). The Acquisition was consummated pursuant to an Acquisition Agreement
dated August 13, 1996, among Ascent, On Command, SpectraVision and the other
parties named therein (the "Acquisition Agreement"), a copy of which is an
exhibit to this report and is incorporated herein by reference. Pursuant to the
Acquisition Agreement, On Command acquired all of the outstanding capital stock
of SpectraDyne, Inc. the primary operating subsidiary of SpectraVision, together
with certain other assets of SpectraVision and its affiliates. Prior to the
Closing Date, On Command Video Corporation ("OCV"), formerly an 84% owned
subsidiary of Ascent (approximately 79% owned on a fully diluted basis), was
merged (the "Merger") into a subsidiary of On Command and became a wholly owned
subsidiary of On Command pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") by and among On Command, OCV and On Command Merger
Corporation dated August 13, 1996, a copy of which is an exhibit to this report
and is incorporated herein by reference. The Acquisition Agreement and the
Merger Agreement were entered into to effect the terms of the Agreement dated
April 19, 1996 entered into among Ascent, OCV and the other parties named
therein and to effectuate the transactions contemplated thereby.
As of the Closing Date, Ascent and the minority stockholders of OCV received
21,750,000 shares of On Command common stock (72.5% of the initial outstanding
On Command common stock). Of these shares, Ascent received 17,149,766 shares. In
consideration of the acquisition of the assets and properties of SpectraVision
by On Command, 8,041,618 shares of On Command common stock were issued to the
SpectraVision bankruptcy estate for distribution to SpectraVision's creditors.
Additionally, 208,382 shares were held in reserve in connection with a possible
adjustment based upon a preliminary determination that SpectraVision had
negative working capital on the Closing Date (the "Reserve Stock"), which
depending upon the final calculation of SpectraVision's negative working
capital, will either be distributed to Ascent and the OCV minority stockholders
or to the SpectraVision bankruptcy estate for the benefit of SpectraVision's
creditors. Assuming no OCV stockholders exercise their appraisal rights in
connection with the transaction and without giving effect to the Reserve Stock,
as of the date of this filing Ascent owns approximately 57.2% of the outstanding
common stock of On Command.
<PAGE>
In connection with the Acquisition and the Merger, On Command also issued
warrants representing the right to purchase a total of 7,500,000 shares of On
Command common stock (20% of the outstanding common stock of On Command, after
exercise of the warrants) pursuant to a Warrant Agreement between On Command and
The Bank of New York dated October 8, 1996, a copy of which is an exhibit to
this report and is incorporated herein by reference. The warrants have a term of
7 years and an exercise price of $15.27 per share of On Command Common Stock.
Series A Warrants to purchase on a cashless basis an aggregate of 1,425,000
shares of On Command common stock were issued to the former OCV stockholders, of
which Ascent received warrants to purchase 1,124,325 shares; Series B Warrants
to purchase for cash an aggregate of 2,625,000 shares of On Command common stock
were issued to the SpectraVision bankruptcy estate for distribution to
creditors; and Series C Warrants were issued to Gary Wilson Partners to purchase
for cash an aggregate of 3,450,000 shares of On Command common stock in
consideration of certain investment banking and advisory services provided in
connection with the transactions.
In addition to the issuance of stock and warrants, On Command made
approximately $92 million in payments in connection with the Acquisition and
Merger as follows: (i) $40 million to Foothill Capital Corporation to pay off
obligations of SpectraVision and its affiliated debtors ("Debtors"); (ii)
approximately $43.6 million to pay off intercompany obligations of OCV to Ascent
and other On Command obligations; and (iii) approximately $8.4 million to pay
certain administrative claims and other bankruptcy costs of the Debtors. The
source of these payments was a $125 million credit facility which On Command
entered into with NationsBank of Texas, N.A. (the "On Command Credit Facility")
consisting of (i) a 364-day revolving credit and competitive advance facility
which, subject to certain conditions, will be renewable for four 364-day
periods, and (ii) a five year revolving credit and competitive advance facility;
provided, however, that any amounts borrowed under the five year facility will
reduce the amount available under the 364-day facility. The terms of the On
Command Credit Facility were disclosed in detail in Ascent's Current Report on
Form 8-K, filed with the Commission on September 26, 1996, as amended by Form
8-K/A filed on October 17, 1996 (the "Ascent Form 8-K") the terms of which are
incorporated herein by this reference.
Certain of the assets acquired by On Command pursuant to the Acquisition
Agreement constitute equipment previously used by SpectraVision in its business
of providing pay per view movies and other services to hotel guests. On Command
currently intends to continue the use of such assets in its business of
providing pay per view movies and other services to hotel guests; however, if On
Command determines that certain of such equipment is obsolete or unnecessary
because of On Command's own equipment, such equipment will not be used in the
provision of such services.
Also on the Closing Date, Ascent entered into a credit agreement with
NationsBank of Texas, N.A. providing for borrowings up to $200 million,
consisting of a 364-day secured revolving credit facility, which, subject to
certain conditions, will be renewable for two 364-day periods (the "Ascent
Credit Facility"). The terms of the Ascent Credit Facility were disclosed in
detail in the Ascent Form 8-K, the terms of which are incorporated herein by
this reference.
Item 5. Other Events
As permitted by Item 5, Ascent has included financial statements for On
Command Video Corporation under Item 7(a) of this Form 8-K despite that fact
that On Command Video Corporation is not a business being acquired by Ascent
since Ascent previously owned 79%, on a fully diluted basis, of On Command Video
Corporation.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
(1) The following financial statements of SpectraVision are
incorporated by reference from Amendment No. 3 to the On
Command Registration Statement on Form S-4, commission file
no. 333-10407, filed with the Commission on October 7, 1996:
Audited Financial Statements for the years ended December 31,
1995, 1994 and 1993
Independent Auditors' Report
Consolidated Statements of Financial Position at December 31,
1995 and 1994
Consolidated Statements of Operations for the years ended
December 31, 1995, 1994 and 1993
Consolidated Statements of Stockholders' Deficit for the years
ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
Unaudited Interim Financial Statements for the six months ended
June 30, 1996 and 1995
Condensed Consolidated Balance Sheets at June 30, 1996 and
December 31, 1995
Condensed Consolidated Statements of Operations for the six
months ended June 30, 1996 and 1995
Condensed Consolidated Statements of Cash Flows for the six
months ended June 30, 1996 and 1995
Notes to Condensed Consolidated Financial Statements
(2) The following financial statements of OCV are
incorporated by reference from Amendment No. 3 to the On
Command Registration Statement on Form S-4, commission file no.
333-10407, filed with the Commission on October 7, 1996:
Audited Financial Statements for the years ended December 31,
1995, 1994 and 1993
Report of Deloitte & Touche LLP
Report of Ernst & Young LLP, Independent Auditors
Balance Sheets at December 31, 1995 and 1994
Statements of Income for the years ended December 31, 1995,
1994 and 1993
Statements of Stockholders' Equity for the years ended December 31, 1995,
1994 and 1993.
Statements of Cash Flows for the years ended December 31, 1995,
1994 and 1993
Notes to Financial Statements
Unaudited Interim Financial Statements for the six months ended
June 30, 1996 and 1995
Condensed Consolidated Balance Sheets at June 30, 1996 and
December 31, 1995
Condensed Consolidated Statements of Income for the six months
ended June 30, 1996 and 1995
Condensed Consolidated Statements of Cash Flows for the six
months ended June 30, 1996 and 1995
Notes to Condensed Consolidated Financial Statements
(b) Pro Forma Financial Information
(1) As permitted by Item 7(b)(2) of Form 8-K, because it is impracticable
to provide the additional required pro forma financial statements for
Ascent at the time of filing this Form 8-K, such statements will be filed
on an amendment to this Form 8-K as soon as practicable, but not later
than December 20, 1996, which is the last business day prior to the date
60 days after this Form 8-K reporting the Merger and Acquisition must be
filed.
(c) Exhibits (listed according to the number assigned in Item
601 of Regulation S-K).
Exhibit No. Description
2.1 Agreement and Plan of Merger by and among On
Command, OCV and On Command Merger Corporation
dated August 13, 1996(Incorporated by
reference to Exhibit 2.1 to On Command's
Registration Statement on Form S-4,file no.
333-10407).
2.2 Acquisition Agreement by and among Ascent, On
Command, SpectraVision and the other parties
named therein, dated August 13, 1996, as
amended(Incorporated by reference to Exhibit
2.2 to On Command's Registration Statement on
Form S-4,file no. 333-10407).
4.2 Warrant Agreement between On Command and The
Bank of New York, dated August 13, 1996
(Incorporated by reference to Exhibit 2.2 to
On Command's Registration Statement on Form
S-4,file no. 333-10407).
20 Press release by On Command
Corporation dated October 10, 1996
reporting the consummation of the
Acquisition and the Merger.
23(a) Consent of Deloitte & Touche LLP
23(b) Consent of Ernst & Young LLP
23(c) Consent of KPMG Peat Marwick LLP
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Ascent Entertainment Group, Inc.
By:
/s/ Arthur M. Aaron
Arthur M. Aaron
Vice President, Business and Legal Affairs and Secretary
Date:
October 25, 1996
<PAGE>
EXHIBIT INDEX
Sequential
Exhibit No. Description Page Number
--------------- ---------------------------------- ------------------
2.1 Agreement and Plan of Merger by
and among On Command, OCV and
On Command Merger Corporation
dated August 13, 1996
(Incorporated by reference to
Exhibit 2.1 to On Command's
Registration Statement on Form S-4,
File No. 333-10407).
--------------- ---------------------------------- ------------------
--------------- ---------------------------------- ------------------
2.2 Acquisition Agreement by and
among Ascent, On Command,
SpectraVision and the other
parties named therein, dated
August 13, 1996, as amended
(Incorporated by reference to
Exhibit 2.2 to On Command's
Registration Statement on Form
S-4, File No. 333-10407).
--------------- ---------------------------------- ------------------
--------------- ---------------------------------- ------------------
4.2 Warrant Agreement between On
Command and The Bank of New
York, dated August 13, 1996
(Incorporated by reference to
Exhibit 4.2 to On Command's
Registration Statement on Form
S-4, File No. 333-10407).
--------------- ---------------------------------- ------------------
--------------- ---------------------------------- ------------------
20 Press release by On Command 9
Corporation dated October 10,
1996 reporting the consummation
of the Acquisition and the
Merger.
--------------- ---------------------------------- ------------------
--------------- ---------------------------------- ------------------
23(a) Consent of Deloitte & Touche LLP 11
--------------- ---------------------------------- ------------------
--------------- ---------------------------------- ------------------
23(b) Consent of Ernst & Young LLP 12
--------------- ---------------------------------- ------------------
--------------- ---------------------------------- ------------------
23(c) Consent of KPMG Peat Marwick LLP 13
--------------- ---------------------------------- ------------------
--------------- ---------------------------------- ------------------
--------------- ---------------------------------- ------------------
<PAGE>
Exhibit 20
On Command Corporation Completes Acquisition of SpectraVision
New Public Company Lists On NASDAQ As "ONCO" Combining On Command
Video and SpectraVision Creates World's Leading Hotel Video Provider
& Resolves SpectraVision, Inc.'s Bankruptcy Case
For Immediate Release
October 10, 1996
Contact:Paul E. Jacobson Karen Amrhine
On Command Sard, Verbinnen & Co.
303.626.7060 212.687.8080
Santa Clara, Calif. -- On Command Corporation, a new public company, has
concluded its acquisition of SpectraVision, Inc., making On Command the world's
largest provider of in-room entertainment and information services to the hotel
industry. On Command Corporation combines the SpectraVision assets with On
Command Video Corporation to create a hotel video distribution system of more
than 900,000 rooms and 100 million annual viewers. The company will trade on the
NASDAQ exchange under the ticker symbol "ONCO."
Led by former AT&T and Creative Artists Agency new media executive Bob Kavner
as its president and CEO, On Command Corporation will offer a variety of
interactive video entertainment and information services primarily to business
and luxury class guest rooms, including video-on-demand, Sony PlayStationTM
video games, DSSTM digital satellite service and the Bell Atlantic InfoTravelTM
interactive concierge. It is based in Santa Clara, California.
"On Command's advanced technology, large viewing audience and superior
demographics give it the scale and resources to provide hotel guest room viewers
the programming they want and need today," said Kavner. "On Command is
positioned to be in the vanguard of interactive programming developments --
offering breakthrough new media applications to hotel guests before they reach
large scale residential markets."
As the head of On Command Corporation, Kavner will focus on the integration
of the two companies and developing a long-term strategic plan that will enhance
On Command's leadership position in on-demand programming by developing new
products and services targeted at the hotel industry and other multi-unit
environments, such as apartments. Before joining On Command in mid-September,
Kavner headed his own consulting firm specializing in broadband and Internet
on-demand ventures. Prior to that he spearheaded Creative Artist Agency's
communications industries consulting practice and served as CEO of AT&T's
MultiMedia Products and Services Group.
<PAGE>
As of June 30, 1996, On Command Video served approximately 419,000
hotel rooms and SpectraVision, Inc. served approximately 495,000
hotel rooms.
A registration statement filed with the SEC for On Command Corporation became
effective Monday, October 7.
On Command Corporation was created by Ascent Entertainment Group, Inc., a
Denver-based media and entertainment company (NASDAQ: GOAL) that owned
approximately 80 percent of On Command Video Corporation. Ascent will continue
to own approximately 57.2 percent of the new On Command Corporation. The
SpectraVision bankruptcy estate will receive 27.5 percent of On Command
Corporation's common stock, distributed through the court-approved bankruptcy
plan to SpectraVision's creditors and resolving claims of approximately $600
million. On Command Corporation will issue warrants, equal to 20 percent on a
fully-diluted basis, to shareholders of On Command Corporation which will be
traded on the NASDAQ exchange under the ticker symbol "ONCO."
Ascent Entertainment Group's principal business is providing pay-per-view
entertainment and information services through its majority-owned On Command
Corporation. Ascent owns and operates additional entertainment-related
businesses, including the NHL Stanley Cup Champion Colorado Avalanche, NBA
Denver Nuggets and Beacon Communications, a motion picture and television
production company.
<PAGE>
Exhibit 23(a)
DELOITTE & TOUCHE LLP CONSENT
We consent to the incorporation by reference in this Current Report on Form 8-K
of Ascent Entertainment Group, Inc. dated October 10, 1996 of our reports dated
September 19, 1996 and October 3, 1996, related to the financial statements of
On Command Video Corporation as of December 31, 1995 and 1994, appearing in
Amendment No. 3 to Registration Statement No. 333-10407 of On Command
Corporation.
Deloitte & Touche LLP
/s/ Deloitte & Touche LLP
San Jose, California
October 21, 1996
<PAGE>
Exhibit 23(b)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration (Form S-4 No.
333-10407) of On Command Corporation and in the related Prospectus of our report
dated January 26, 1994, with respect to the financial statements and schedule of
On Command Video Corporation for the year ended December 31, 1993 incorporated
by reference in this Ascent Entertainment Group, Inc. Form 8-K.
Ernst & Young LLP
/s/ Ernst & Young LLP
San Jose, California
October 24, 1996
<PAGE>
Exhibit 23(c)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
On Command Corporation:
We consent to the incorporation by reference herein of our reports dated March
1, 1996, except as to the second paragraph of Note 7, which is dated as of March
22, 1996, related to the consolidated statements of financial position of
SpectraVision, Inc. and subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of operations, stockholders' deficit and cash
flows for each of the years in the three-year period ended December 31, 1995,
and the related consolidated financial statement schedule, which reports are
included in the On Command Corporation Registration Statement on Amendment No. 3
on Form S-4 filed with the Securities and Exchange Commission on October 7, 1996
(No. 333-10407).
Our reports contain explanatory paragraphs that state that SpectraVision's
filing under Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court on June 8, 1995 and its expected noncompliance with
certain covenants related to its debtor-in-possession financing raise
substantial doubt about SpectraVision's ability to continue as a going concern.
The consolidated financial statements and the consolidated financial statement
schedule do not include any adjustments that might result from the outcome of
this uncertainty.
KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
Dallas, Texas
October 21, 1996
