SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
AMENDMENT NO. 1
to
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
August 21, 1996
Date of Report (Date of earliest event reported)
Commission file number 33-80935
NETWORK EVENT THEATER, INC.
(Name of Small Business Issuer in Its Charter)
Delaware 13-3864111
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
149 Fifth Avenue, New York, New York 10010
(Address of Principal Executive Offices) (Zip Code)
(212) 779-2740
(Issuer's Telephone Number, Including Area Code)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired
The audited financial statements of the acquired operating divisions of
American Passage Media Corporation for the years ended June 30, 1996 and
1995 are contained in the Form 8-K as filed on September 27, 1996.
(b) Pro Forma Financial Information
o Unaudited Pro Forma Combined Statement of Operations for the Twelve Months
Ended December 31, 1995
o Unaudited Pro Forma Combined Statement of Operations for the Six Months
Ended June 30, 1996
o Notes to Unaudited Pro Forma Combined Statements of Operations
o Unaudited Pro Forma Combined Balance Sheet at June 30, 1996
o Notes to Unaudited Pro Forma Combined Balance Sheet
<PAGE>
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The Unaudited Pro Forma Combined Statements of Operations for the twelve months
ended December 31, 1995 and the six months ended June 30, 1996 presents the
statements of operations of Network Event Theater, Inc. (the "Company") as if
(i) the acquisition of substantially all of the assets of American Passage Media
Corporation's ("APMC") college and high school media, marketing and service
businesses (the "Acquisition"), (ii) the borrowing from Signet Bank (the "Term
Loan"), (iii) the issuance of a subordinated promissory note from the Company to
APMC (the "Promissory Note") and (iv) the issuance by the Company of a two-year
consulting agreement with APMC (the "Consulting Agreement") had occurred on
January 1, 1995. The Unaudited Pro Forma Combined Balance Sheet at June 30, 1996
presents the balance sheet of the Company as if the Acquisition, the Term Loan,
the Promissory Note and the Consulting Agreement had occurred on June 30, 1996.
The Acquisition has been accounted for using the purchase method of accounting.
The total cost of the Acquisition has been allocated to the tangible and
intangible assets acquired and liabilities assumed based on their respective
fair values. The allocation of the purchase price assumed in the unaudited pro
forma combined financial statements is preliminary. The Company does not expect
that the final allocation of the purchase price will materially differ from the
preliminary allocation.
The pro forma adjustments are based on available information and on certain
assumptions that the Company believes are reasonable under the circumstances.
The unaudited pro forma combined financial statements should be read in
conjunction with the Company's financial statements and notes thereto, as well
as the financial statements and notes thereto of Young Adult Marketing Divisions
(Operating Divisions of American Passage Media Corporation) (included in the
Form 8K filed September 27, 1996). The unaudited pro forma combined statement of
operations data are not necessarily indicative of the results that would have
occurred if the Acquisition, the Term Loan, the Promissory Note and the
Consulting Agreement had occurred on the date indicated, nor are they indicative
of the Company's future results of operations.
<PAGE>
Network Event Theater, Inc.
Unaudited Pro Forma Combined Statement of Operations
<TABLE>
<CAPTION>
Twelve Months Ended December 31, 1995
----------------------------------------------------------------------------
Network Event American Passage Pro Forma Pro Forma
Theater, Inc. Media Corporation (a) Adjustments Combined
------------- -------------------- -------------- -----------
<S> <C> <C> <C> <C>
Net revenue $ -- $ 5,534,833 $ (11,400)(b) $ 5,523,433
Expenses:
Cost of revenues -- 2,706,435 -- 2,706,435
Selling, general and administrative expenses 1,927,374 1,909,329 (256,300)(c) 3,717,203
136,800 (d)
Corporate expenses -- 239,403 -- 239,403
Depreciation and amortization 336,111 -- 350,408 (e) 686,519
----------- ----------- ----------- -----------
Total expenses 2,263,485 4,855,167 230,908 7,349,560
Loss from operations (2,263,485) 679,666 (242,308) (1,826,127)
Interest and other income 126,363 -- -- 126,363
Interest expense -- -- (363,765)(f) (363,765)
----------- ----------- ----------- -----------
Loss before provision for income taxes (2,137,122) 679,666 (606,073) (2,063,529)
Provision (benefit) for income taxes -- 245,367 (245,367)(g) --
----------- ----------- ----------- -----------
Net loss $(2,137,122) $ 434,299 $ (360,706) $(2,063,529)
=========== =========== =========== ===========
Net loss per common share $ (0.34) $ (0.32)
=========== ===========
Weighted average common shares outstanding 6,354,440 6,354,440
</TABLE>
<PAGE>
Network Event Theater, Inc.
Unaudited Pro Forma Combined Statement of Operations
<TABLE>
<CAPTION>
Six Months Ended June 30, 1996
----------------------------------------------------------------------------
Network Event American Passage Pro Forma Pro Forma
Theater, Inc. Media Corporation (a) Adjustments Combined
------------- -------------------- -------------- -----------
<S> <C> <C> <C> <C>
Net revenue $ 4,041 $ 3,108,998 $ (30,300)(b) $ 3,082,739
Expenses:
Cost of revenues -- 1,462,711 -- 1,462,711
Selling, general and administrative expenses 1,738,241 992,576 (18,800)(c) 2,780,417
68,400 (d)
Corporate expenses -- 137,252 -- 137,252
Depreciation and amortization 320,341 -- 175,204 (e) 495,545
----------- ----------- ----------- -----------
Total expenses 2,058,582 2,592,539 224,804 4,875,925
Loss from operations (2,054,541) 516,459 (255,104) (1,793,186)
Interest and other income 132,097 -- -- 132,097
Interest expense -- -- (181,882)(f) (181,882)
----------- ----------- --------- -----------
Loss before provision for income taxes (1,922,444) 516,459 (436,986) (1,842,971)
Provision (benefit) for income taxes -- 182,736 (182,736)(g) --
----------- ----------- --------- -----------
Net loss $(1,922,444) $ 333,723 $(254,250) $(1,842,971)
=========== =========== ========= ===========
Net loss per common share $ (0.22) $ (0.21)
=========== ===========
Weighted average common shares outstanding 8,654,440 8,654,440
</TABLE>
<PAGE>
Notes to Unaudited Pro Forma Combined Statement of Operations
(a) Reflects the historical statement of operations of American Passage Media
Corporation ("APMC"). APMC operated on a June 30th fiscal year end. The
historical statement of operations included in the unaudited pro forma
combined statement of operations, however, have been prepared on a calendar
year basis based on the unaudited quarterly financial statement of APMC.
(b) To reflect the removal of net revenues related to a college network service
of APMC not acquired by Network Event Theater, Inc. (the "Company").
(c) To reflect the removal of costs associated with an office building of APMC
that was closed in 1996.
(d) To reflect increased costs associated with the two-year $273,600 consulting
agreement issued by the Company to APMC.
(e) To reflect increased depreciation and amortization related to the
consummation of the APMC acquisition.
(f) To reflect increased interest expense related to the issuance of (i) a five
year $3.5 million term loan with Signet bank with a current rate of
interest of 8.679% and (ii) a two year $750,000 subordinated promissory
note with APMC with an interest rate of 8% per year.
(g) To reflect the removal of income taxes due to the Acquisition.
<PAGE>
Network Event Theater, Inc.
Unaudited Pro Forma Combined Balance Sheet
<TABLE>
<CAPTION>
Six Months Ended June 30, 1996
----------------------------------------------------------------------------
Network Event American Passage Pro Forma Pro Forma
Theater, Inc. Media Corporation Adjustments Combined
------------- ----------------- ----------- -----------
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 266,806 $ -- $(4,750,000)(a) $ 216,806
3,500,000 (b)
1,200,000 (c)
Investments 7,882,570 -- (1,200,000)(c) 6,682,570
Accounts receivable, net 236 1,370,651 (1,370,651)(a) 236
Prepaid expenses -- 32,423 -- 32,423
Deposits 26,169 -- -- 26,169
----------- ----------- ----------- -----------
Total current assets 8,175,781 1,403,074 (2,620,651) 6,958,204
Property and equipment, net 3,081,620 49,707 -- 3,131,327
Organizational costs, net 58,634 -- -- 58,634
Intangible assets, net -- -- 5,417,870 (a) 5,417,870
----------- ----------- ----------- -----------
Total assets $11,316,035 $ 1,452,781 $ 2,797,219 $15,566,035
=========== =========== =========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 462,634 $ 1,789,636 $(1,789,636)(a) $ 462,634
Deferred revenues -- 464,890 (464,890)(a) --
----------- ----------- ----------- -----------
Total liabilities 462,634 2,254,526 (2,254,526) 462,634
Long term debt -- -- 750,000 (a) 4,250,000
3,500,000 (b)
Stockholders' equity (divisional deficiency of assets) 10,853,401 (801,745) 801,745 (a) 10,853,401
----------- ----------- ----------- -----------
Total liabilities and stockholders' equity $11,316,035 $ 1,452,781 $ 2,797,219 $15,566,035
=========== =========== =========== ===========
</TABLE>
<PAGE>
Notes to Unaudited Pro Forma Combined Balance Sheet
(a) To reflect the acquisition of substantially all of the assets (except
accounts receivable) of American Passage Media Corporation's college and
high school media, marketing and service businesses (the "Acquisition") and
the preliminary allocation of the purchase price of $4,750,000.
The allocation of purchase price and elimination of assets not acquired and
the liabilities not assumed in connection with the Acquisition is as
follows:
<TABLE>
<CAPTION>
Allocation of Historical
Purchase Carrying
Price Value Adjustment
<S> <C> <C> <C>
ASSETS:
Accounts receivable, net $ 0 $ 1,370,651 $(1,370,651)
Prepaid expenses 32,423 32,423 0
Property and equipment, net 49,707 49,707 0
Intangible assets, net 5,417,870 0 5,417,870
----------- ----------- -----------
Total assets $ 5,500,000 $ 1,452,781 $ 4,047,219
=========== =========== ===========
LIABILITIES:
Accounts payable and accrued expenses $ 0 $ 1,789,636 $(1,789,636)
Deferred revenues 0 464,890 (464,890)
Long term debt 750,000 0 750,000
----------- ----------- -----------
Net assets $ 4,750,000 $ (801,745) $ 5,551,745
=========== =========== ===========
Stockholders' equity $ (801,745) $ 801,745
=========== ===========
</TABLE>
(b) To reflect proceeds totaling $3,500,000 received from the term loan with
Signet Bank.
(c) To reflect the liquidation of Company investments to pay for the
Acquisition.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
November 26, 1996 NETWORK EVENT THEATER, INC.
By:/s/ Harlan D. Peltz
-------------------------
Harlan D. Peltz
Chairman of the Board and
Chief Executive Officer
