PTN MEDIA, INC.
400,000 SHARES OF COMMON STOCK
PROSPECTUS SUPPLEMENT
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DECEMBER 3, 1998
This Prospectus Supplement to Registration Statement on Form SB-2 of
PTN Media, Inc., a Delaware corporation (the "Company") includes certain amended
information contained in the Company's Registration Statement, as well as in the
Company's Prospectus dated September 18, 1998 ("Prospectus").
This Prospectus Supplement must be affixed to the Prospectus upon any
delivery to an offeree of the Shares and is intended to update and correct
certain information in the Prospectus and prior supplements, as follows:
Loans from President
Amending and restating a portion of the Prospectus and several prior
supplements, in April 1998, Peter Klamka, the Company's Chairman, President and
Chief Executive Officer, provided the Company with a revolving credit line with
a maximum of $500,000 available (the "Klamka Credit Line"). In September 1998,
the Board of Directors of the Company authorized an increase in this line to
$610,000, and in November and December 1998, further increases to $1,000,000
were authorized. As of December 3, 1998, borrowings outstanding under the Klamka
Credit Line aggregated approximately $750,000. Monies loaned were used to make
certain payments to Niki Taylor's company, to provide a payment required under
the Company's Calendar Agreement with Claudia Schiffer, and for working capital.
Loans drawn on the Klamka Credit Line bear interest at a rate of 9% per
annum from the date they are made to the Company and are payable by May 2001,
provided, however, that if the Company raises gross proceeds in this Offering of
at least $1,500,000, the entire outstanding amount of the Klamka Credit Line and
accrued interest will be repaid from the proceeds of this Offering.
As a result of the foregoing and other matters described in previous
supplements, the table and footnotes included in the Use of Proceeds section on
page 18 of the Prospectus are adjusted from that set forth in the Prospectus
dated September 18 to provide as follows:
<TABLE>
<CAPTION>
$2 Million $1.5 Million $1 Million $500,000
---------- ------------ ---------- --------
<S> <C> <C> <C> <C>
Licensing Fees Payable to Models(1) $400,000 $150,000 $200,000 $150,000
Photographs and Printing(2) $100,000 $ 5,000 $ 50,000 $ 5,000
Repayment of Indebtedness(3) $806,250 $806,250 $ 56,250 $ 56,250
Web Site Design(4) $ 75,000 $ 75,000 $ 75,000 --
Public Relations and Advertising(5) $105,000 $ 75,000 $105,000 $ 25,000
Computer Equipment $ 50,000 -- -- --
Working Capital(6) $ 63,750 $ 38,750 $213,750 $ 11,250
</TABLE>
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(1) The Company also previously advanced an aggregate of $134,000 to a
company controlled by well-known model, Tyra Banks, pursuant to a
license agreement and an agreement for the sale of calendars and
electronic planners. Ms. Banks has claimed that the Company breached
these agreements and has refused to perform under either agreement. Ms.
Banks' company could bring an action against the Company for additional
amounts allegedly owed under these agreements, in an approximate sum of
$153,000, as a result of the Company's failure to pay such amount by
September 15, 1998. If the Company agrees to settle any potential
claims or is required to pay any additional amounts to Ms. Banks'
company, such funds will paid from the proceeds of this Offering. In
the event that the Company does not raise sufficient funds in this
Offering to pay any such amounts, and does not raise additional funds,
in a timely manner, or have cash available from operations, or
otherwise, with which to make such payments, the Company would be
required to either substantially reduce or terminate its operations.
The Company expects to enter into a Web Site License Agreement with
Claudia Schiffer, requiring a payment of $150,000 upon signing. This
amount is expected to be paid from the proceeds of the offering. See
"Management's Plan of Operations - Cash Requirements" and "Business -
Web Sites."
<PAGE>
(2) These amounts include payment for photo sessions to take exclusive
shots of models for use in connection with the Company's web sites and
electronic planners, as well as for use in the Company's advertising
and marketing materials. See "Business - Web Sites," and " - Sources of
Revenue -- Electronic Planners."
(3) Includes the Company's repayment of outstanding loans, in an aggregate
principal amount of $750,000, to Peter Klamka, the Company's Chairman,
President and Chief Executive Officer, upon the consummation of this
Offering. This indebtedness is not due until the earlier of (i) the
date that the Company has raised an aggregate of not less than
$1,500,000 in one or more public offerings of any of its securities or
(ii) May 2001. Also includes the Company's repayment of $56,250, plus
interest at the rate of 8% per annum, to four individuals pursuant to
promissory notes which were due and payable in July 1998. The Company
intends to pay the principal and interest on this outstanding
indebtedness from the proceeds of this Offering. There can be no
assurance that one or more of the individuals holding such promissory
notes will not declare the Company in default thereunder, and require
the Company to immediately pay the entire amount of principal and
interest outstanding. See "Certain Transactions."
(4) Reflects payments to a third party web designer. See "Business -
Design and Development of Web Sites."
(5) Includes amounts payable to a public relations firm, which the Company
has retained, and expenses relating to print and/or electronic
advertising. See "Business - Sources of Revenue -- Advertising" and
" - Marketing and Promotion -- Public Relations."
(6) The Company may use a portion of the proceeds allocated to working
capital to pay salaries of non-executive employees.
