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UNITED STATES
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: DECEMBER 31, 1997
Date of earliest event reported: DECEMBER 16, 1997
TCI MUSIC, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-22815 84-1380293
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8101 EAST PRENTICE AVENUE, SUITE 500, ENGLEWOOD, CO 80111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 303.267.5500
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 16, 1997, TCI Music, Inc., a Delaware corporation ("TCI Music"), The
Box Worldwide, Inc., a Florida corporation (the "Box"), and TCI Music
Acquisition Sub, Inc., a Florida corporation and wholly owned subsidiary of TCI
Music ("Acquisition Sub"), consummated the Agreement and Plan of Merger dated as
of August 12, 1997 (the "Merger Agreement") pursuant to which Acquisition Sub
was merged with and into the Box with the Box as the surviving corporation (the
"Merger"). Shares of common stock of the Box outstanding immediately prior to
the Merger (other than shares held by holders exercising dissenters' rights
under the Florida Business Corporation Act) were converted into the right to
receive a number of shares of TCI Music Series A Convertible Preferred Stock
("Music Preferred Stock") based on the formula described below and cash in lieu
of fractional shares. Also effective as of the consummation of the Merger, TCI
Music paid EMAP, Plc, an English public limited company and the holder of the
Box's 1,666,667 outstanding shares of 6% Convertible Redeemable Preferred Stock,
a purchase price of $2,500,000 cash, plus accrued and unpaid dividends, for such
shares of preferred stock (the equivalent of $1.50 per share). As a result of
these transactions, the Box became a wholly owned subsidiary of TCI Music
effective as of the consummation of the Merger.
The common stock of the Box was valued at $1.50 per share for purposes of the
Merger, and each share of common stock of the Box outstanding immediately prior
to the Merger (other than shares held by holders exercising dissenters' rights)
was converted into the right to receive (i) a fraction (the "Merger Conversion
Ratio") of a share of Music Preferred Stock equal to the quotient (rounded to
the nearest hundredth) of $1.50 divided by three times the average of the
average daily closing bid and asked prices of one share of TCI Music Series A
Common Stock, par value $.01 per share ("Series A Common Stock"), for a period
of 20 consecutive trading days ending on the third trading day prior to the
closing of the Merger as reported on the Nasdaq SmallCap Market and (ii) cash in
lieu of fractional shares. Such calculation resulted in a Merger Conversion
Ratio of .07. The aggregate value of the consideration to be paid to holders of
common stock of the Box would be approximately $37 million, assuming
approximately 24,902,693 shares of common stock of the Box outstanding
immediately prior to the Merger and no dissenters' shares. Each share of Music
Preferred Stock will be initially convertible at the option of the holder into
three shares of Series A Common Stock, subject to certain antidilution
adjustments and adjustments for stock dividends and distributions, if any, will
be entitled to receive cash dividends ratably in proportion to dividends
declared on each share of Series A Common Stock, if any, and will be entitled to
vote on all matters submitted to a vote of the holders of the Series A Common
Stock and to the number of votes equal to the number of shares of Series A
Common Stock into which the Music Preferred Stock is convertible as of the
record date for the matter to be voted on. The Music Preferred Stock began
trading on the Nasdaq SmallCap Market on December 17, 1997 under the symbol
"TUNEP."
The shares of Series A Common Stock issued to former stockholders of DMX Inc.
trade on the Nasdaq SmallCap Market under the symbol "TUNE" together with an
associated right (together, a "Unit") issued by Tele-Communications, Inc.
("TCI"), which right entitles the holder to require TCI to purchase such
holder's associated share of Series A Common Stock for $8.00 if the trading
price of a Unit does not equal or exceed $8.00 for at least 20 consecutive
trading days during the one-year period ending July 11, l998. Such rights will
expire on August 10, 1998 unless extended by their terms. The shares of Series
A Common Stock into which the shares of Music Preferred Stock are convertible
will not have any rights associated therewith and may not be traded as the same
security as the Units currently traded under the symbol "TUNE." Such shares of
Series A Common Stock (without rights) have been assigned a different CUSIP
number until the expiration of the rights.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements.
The historical financial statements of the Box that are required to be
included in this Report on Form 8-K are substantially the same as the
historical financial statements of the Box that were previously
included in the Registration Statement on Form S-4 filed by TCI Music,
Inc. on November 12, 1997 with the Securities and Exchange Commission,
(file no. 333-39943). Accordingly, the historical financial
statements of the Box are not included herein.
(b) Pro Forma Financial Information.
The pro forma financial information that is required to be included in
this Report on Form 8-K is substantially the same as the pro forma
information that was previously included in the Registration Statement
on Form S-4 filed by TCI Music, Inc. on November 12, 1997 with the
Securities and Exchange Commission, (file no. 333- 39943).
Accordingly, such pro forma financial information is not included
herein.
(c) Exhibits.
2. Agreement and Plan of Merger dated as of August 12, 1997 by and
among TCI Music, Inc., TCI Acquisition Sub, Inc. and The Box
Worldwide, Inc. (Incorporated by reference to Exhibit 2.1 to TCI
Music's Registration Statement on Form S-4 dated November 12,
1997, file no. 333-39943.)
4.1 Specimen Stock Certificate for TCI Music Series A Common Stock
(without put right). (Incorporated by reference to Exhibit 4.1
to TCI Music's Registration Statement on Form S-4 dated November
12, 1997, file no. 333-39943.)
4.2 Specimen Stock Certificate for TCI Music Series A Convertible
Preferred Stock. (Incorporated by reference to Exhibit 4.2 to
TCI Music's Registration Statement on Form S-4 dated November
12, 1997, file no. 333-39943.)
4.3 TCI Music, Inc. Certificate of Designations for Series A
Convertible Preferred Stock. (Incorporated by reference to
Exhibit 4.3 to TCI Music's Registration Statement on Form S-4
dated November 12, 1997, file no. 333-39943.)
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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.
TCI MUSIC, INC.
DATE: DECEMBER 31, 1997 BY: /S/ JOANNE WENDY KIM
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Vice President-Finance
Principal Financial Officer and
Principal Accounting Officer
