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U.S. 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
December 20, 2000
Date of Report (Date of earliest event reported)
YOUTHSTREAM MEDIA NETWORKS, INC
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(Exact Name of Registrant as Specified in Its Charter)
Commission file number: 0-27556
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DELAWARE 13-4082185
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(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation)
28 WEST 23RD STREET, NEW YORK, NY 10010
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(Address of Principal Executive Offices) (Zip code)
212-622-7300
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(Registrant Telephone Number, Including Area Code)
529 FIFTH AVE, NEW YORK, NY 10017
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(Former Name or Former Address, if changed since last report)
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Item 5. Other Events
PRESS RELEASE
YOUTHSTREAM MEDIA NETWORKS, INC. ANNOUNCES WRITEOFF
NEW YORK--(BUSINESS WIRE)--Dec. 8, 2000--YouthStream Media Networks
(Nasdaq:NETS-news), an integrated media and marketing services company targeting
teens and young adults, today announced that its Board of Directors has decided
to discontinue the operations of its sixdegrees subsidiary and exit its ASP
business, known as Sodalis. The Company is seeking to sell the Sodalis business
to venture capitalists or others willing to invest in developing the business.
As a result, the Company plans to take a one-time charge in the second quarter
of fiscal year 2001, ending December 31, 2000, estimated to be in the range of
$150-165 million almost all associated with writing down the goodwill related to
these businesses.
When the online advertising market was growing dramatically and the capital
markets for online investment were robust, YouthStream made significant
investments in its online businesses. However, in light of the recent
deterioration in market conditions and the Company's focus on near-term
profitability, its Board of Directors deemed further investments in these online
properties inappropriate. Consequently, YouthStream expects to shut down its
sixdegrees subsidiary effective December 31, 2000. Appropriate workforce
reductions have been made.
Sodalis' ASP platform includes the best of the technology purchased by the
Company in its acquisitions of CommonPlaces LLC, College Web and Invino.
However, having determined that Sodalis is not aligned with its long-term vision
and strategy, the Company has decided to seek to sell its interest in this
business. The Company will continue to operate its successful Teen.com website
as part of its youth-oriented media businesses.
YouthStream stated that the one-time charge is composed of the unamortized
portion of the purchase price, or goodwill, of these companies as well as small
amounts of related fixed assets and accrued expenses. The actual amount of the
charge will be determined when the Company establishes a valuation for the
Sodalis business prior to the reporting of its second-quarter financial results.
President and Chief Executive Officer James "P.T." Lucchesi said, "We believe
that these actions will have a significant and positive impact on reported
earnings starting with the third quarter of fiscal year 2001, which ends March
31, 2001. Specifically, goodwill amortization of about $18.5 million per quarter
as well as certain material operating expenses will be eliminated.
"As importantly, our operations will now more accurately reflect our core
business focus. We remain confident in our long-term growth prospects and expect
favorable results from our growth initiatives." The Company will host a
conference call to discuss today's announcements on Monday, December 11, 2000,
at 10:00 a.m. To access the conference call, please dial 212-676-5182 five to 10
minutes prior to the start of the call. If you are unable to attend the live
conference call, a replay will be available beginning at 12:00 p.m. on December
11, 2000, and will run through 12:00 p.m. on December 18, 2000. To access the
replay, dial 800-633-8284 or 858-812-6440 (International) and enter the
reservation number 17217449.
About YouthStream Media Networks
YouthStream Media Networks delivers the teenage and young adult market to
advertisers and the entertainment industry through its unique combination of
media and retail properties. The Company's properties reach this prime
demographic through more than 7,000 high schools and middle schools and 2,000
U.S. college campuses. The Company is organized into two principal operating
units: media and retail. YouthStream's media properties include: Network Event
Theater, a national network of campus movie theaters; American Passage, a
leading college newspaper advertising placement service; Beyond the
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Wall, the "Ads as Art" poster catalog; Campus Voice, the largest out-of-home
editorial wall media network on college campuses; HotStamp, a major on-campus
free postcard advertising brand; and Teen.com, the leading online community for
13-19 year-olds. The Company's Trent Graphics retail segment represents the
largest national on-campus poster seller and a growing chain of retail poster
outlets.
Except for the historical information herein, the matters discussed in this news
release are forward-looking statements that involve risks and uncertainties,
including the timely development and acceptance of new products, the impact of
competitive products and pricing, and other risks detailed from time to time in
the Company's SEC reports, including the annual report filed on Form 10-KSB for
the fiscal year ended June 30, 2000, and Form 10-Q for the quarter ended
September 30, 2000.
Item 7. Financial Statements and Exhibits
None
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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, hereunto duly authorized.
December 20, 2000 YOUTHSTREAM MEDIA NETWORDS, INC.
By: /s/ JAMES G. LUCCHESI
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James G. Lucchesi
Chief Executive Officer
