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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 0-27556
YOUTHSTREAM MEDIA NETWORKS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-4082185
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation of Organization) Identification No.)
28 West 23rd Street, New York, New York 10010
(Address of Principal Executive Offices) (Zip Code)
(212) 622-7300
(Registrant's Telephone Number, Including Area Code)
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
----- -----
At November 8, 2000 there were 29,174,100 shares of Common Stock, $.01 par value
outstanding.
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<PAGE>
YOUTHSTREAM MEDIA NETWORKS, INC.
FORM 10-Q
INDEX
PAGE
PART I--FINANCIAL INFORMATION NUMBER
------
ITEM 1 FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS - SEPTEMBER 30, 2000
(UNAUDITED) AND JUNE 30, 2000................................. 1
CONSOLIDATED STATEMENTS OF OPERATIONS - THREE MONTHS
ENDED SEPTEMBER 30, 2000 AND 1999 (UNAUDITED)................. 2
CONSOLIDATED STATEMENTS OF CASH FLOWS - THREE MONTHS ENDED
SEPTEMBER 30, 2000 AND 1999 (UNAUDITED)....................... 3
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - THREE
MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)................... 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS....................... 5
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS........................................ 8
PART II--OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K.................................. 10
SIGNATURES............................................................... 11
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
YOUTHSTREAM MEDIA NETWORKS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
September 30, June 30,
2000 2000
------------- ---------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 17,153 $ 18,232
Marketable debt securities, at amortized cost 21,493 25,189
Accounts receivable, net of allowance for doubtful accounts of $679
and $542 at September 30, 2000 and June 30, 2000, respectively 5,414 5,010
Inventories 1,396 1,471
Prepaid expenses
6,204 5,544
Deposits and other current assets -- 2,905
--------- ---------
Total current assets 51,660 58,351
Property and equipment, net of accumulated depreciation of $5,443
and $4,290 at September 30, 2000 and June 30, 2000, respectively 11,777 12,186
Deferred financing costs, net of accumulated amortization of $538
and $355 at September 30, 2000 and June 30, 2000, respectively 3,942 3,963
Intangible assets, net of accumulated amortization of $51,867
and $33,003 at September 30, 2000 and June 30, 2000, respectively 188,054 201,606
Restricted cash 1,328 1,328
Other assets 658 513
--------- ---------
Total assets $ 257,419 $ 277,947
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,819 $ 2,077
Accrued employee compensation 1,377 1,277
Other accrued expenses 3,049 3,497
Deferred revenues 945 718
Current portion of deferred purchase price -- 45
Current portion of capitalized lease
obligations 860 825
Current portion of long-term debt 1,131 1,275
--------- ---------
Total current liabilities 10,181 9,714
Capitalized lease obligations 935 1,057
Long-term debt 19,537 18,709
Deferred rent 354 353
Deferred purchase price 3,372 3,700
Commitments and contingencies -- --
Stockholders' equity:
Preferred stock, $.01 par value, 5,000 shares authorized,
no shares issued and outstanding -- --
Common stock, $.01 par value, 100,000 shares authorized, 29,073
shares and 28,031 shares issued and outstanding at September
30, 2000 and June 30, 2000, respectively 291 280
Additional paid-in capital 327,807 321,980
Accumulated deficit (105,058) (77,846)
--------- ---------
Total stockholders' equity 223,040 244,414
--------- ---------
Total liabilities and stockholders' equity $ 257,419 $ 277,947
========= =========
</TABLE>
See notes to consolidated financial statements
1
<PAGE>
YOUTHSTREAM MEDIA NETWORKS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
(UNAUDITED)
Three months ended
September 30,
----------------------
2000 1999
-------- --------
Net Revenues $ 10,786 $ 10,361
Operating Expenses:
Cost of goods sold 1,358 1,386
Selling, general and administrative expenses 14,670 6,882
Corporate expenses 1,628 873
Depreciation and amortization 20,017 917
-------- --------
Total operating expenses 37,673 10,058
-------- --------
Income (loss) from operations (26,887) 303
Equity loss in investment -- (792)
Interest income 769 227
Other income 27 150
Interest expense (865) (249)
-------- --------
Loss before provision for income taxes (26,956) (361)
Provision for income taxes 256 48
-------- --------
Net loss $(27,212) $ (409)
======== ========
Net loss per basic and diluted common share $ (0.94) $ (0.03)
======== ========
Weighted average basic and diluted common
shares outstanding 28,897 15,929
======== ========
See notes to consolidated financial statements
2
<PAGE>
YOUTHSTREAM MEDIA NETWORKS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
----------------------
2000 1999
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(27,212) $ (409)
Adjustments to reconcile net loss to
net cash used in operating activities:
Bad debt expense 137 (16)
Depreciation and amortization 20,017 917
Gain on sale of equipment (27) --
Amortization of deferred financing costs 183 45
Deferred rent 1 --
Amortization of original issue discount on Subordinated Notes 29 9
Changes in assets and liabilities net of acquisitions:
Increase in accounts receivable (291) (1,578)
Decrease in inventory 75 437
Increase in prepaid expenses (659) (387)
Decrease (increase) in deposits and other current assets 2,905 (450)
Increase in accounts payable 608 454
(Decrease) increase in accrued employee compensation (163) 137
(Decrease) increase in other accrued expenses (493) 494
Increase (decrease) in deferred revenues 227 (314)
-------- --------
Net cash used in operating activities (4,663) (661)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (483) (1,950)
Proceeds from sale of equipment 37 --
Sale of investments in marketable debt securities 3,696 --
Other assets (154) --
Payment for business acquisitions (net of cash acquired) (126) (142)
-------- --------
Net cash provided by (used in) investing activities 2,970 (2,092)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock and exercise
of warrants and options 127 24,209
Net proceeds from issuance of warrants in connection
with long-term debt 35 --
Repayment of capitalized lease obligations (203) --
Proceeds from long-term debt 965 --
Repayment of long-term debt (310) (167)
-------- --------
Net cash provided by financing activities 614 24,042
-------- --------
(Decrease) increase in cash and equivalents (1,079) 21,289
Cash and equivalents at beginning of period 18,232 7,046
-------- --------
Cash and equivalents at end of period $ 17,153 $ 28,335
======== ========
Supplemental cash flow information
Cash paid for interest $ 660 $ 332
======== ========
Cash paid for income taxes $ 89 $ 18
======== ========
Noncash Financing Activities
Issuance of warrants in connection with long-term debt $ 162 $ --
======== ========
Issuance of common stock in connection with acquisitions $ 5,514 $ 2,529
======== ========
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
YOUTHSTREAM MEDIA NETWORKS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD JULY 1, 2000 TO SEPTEMBER 30, 2000
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
----------------------- PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balances at June 30, 2000 28,031 $ 280 $ 321,980 $ (77,846) $ 244,414
Issuance of warrants in connection with long-term debt -- -- 197 -- 197
Issuance of common stock upon exercise of stock options 45 1 126 -- 127
Issuance of common stock in connection with
acquisition of Teen.com 944 9 5,211 -- 5,220
Issuance of common stock in connection with
acquisition of HelloXpress 53 1 293 -- 294
Net loss -- -- -- (27,212) (27,212)
--------- --------- --------- --------- ---------
Balances at September 30, 2000 29,073 $ 291 $ 327,807 $(105,058) $ 223,040
========= ========= ========= ========= =========
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
YOUTHSTREAM MEDIA NETWORKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
1. ORGANIZATION AND BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
YouthStream Media Networks, Inc. ("YouthStream"), and its wholly-owned
subsidiaries, CommonPlaces, LLC ("CommonPlaces"), sixdegrees, inc.,
("sixdegrees"), Network Event Theater, Inc. ("NET"), American Passage Media,
Inc. ("American Passage"), Campus Voice, Inc. ("Campus Voice"), Beyond the Wall,
Inc. ("Beyond the Wall"), Trent Graphics, Inc. ("Trent"), CollegeWeb.com, Inc.
("CollegeWeb"), Invino Corporation ("Invino"), and W3T.com, Inc. ("Teen.com")
(collectively, the "Company"). All significant intercompany transactions have
been eliminated.
The Company is a media, marketing services, promotions and Internet company
targeting the teenage and young adult marketplace, particularly high school,
college and university audiences. Through the combination of a unique portfolio
of targeted off-line and on-line media properties the Company provides
integrated, cost-effective solutions to advertisers and sponsors looking to
reach young adults. The Company's portfolio of on-line and off-line Internet and
media services properties includes:
o Trent, an on-campus seller of wall posters to students at colleges and
universities throughout the country, which also operates a growing
number of retail poster stores complementing its on-campus presence;
o The ability to develop and execute nationwide sampling, promotion and
event marketing campaigns targeting teens and young adults;
o A national network of digital satellite campus movie theaters and
expertise conducting film screenings at dozens of other major college
campuses;
o HotStamp, a national free postcard advertising brand targeting
teenagers and young adults;
o A leading college newspaper advertising placement service reaching
virtually every college newspaper in the nation;
o Out of home media networks in high schools, middle schools and on
college campuses;
o A unique "Ads as Art" poster catalog distributed on campuses
nationwide; and
o Teen.com and sixdegrees.com, web destinations for teens and young
adults.
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q. Accordingly, they do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for an
interim period are not necessarily indicative of the results that may be
expected for the year ended June 30, 2001. For further information, refer to the
consolidated financial statements and footnotes thereto included in Company's
Form 10-KSB for the fiscal year ended June 30, 2000.
2. ACQUISITIONS
In July 2000, the Company acquired Teen.com pursuant to a merger agreement among
the Company, a wholly-owned subsidiary of the Company, and Teen.com. Teen.com is
a family-friendly Web destination for teens and is ranked as one of the top
websites visited by 13 to 19 year-olds. The purchase price consisted of 944,000
shares of the Company's common stock, including 50,000 shares issued to the
broker, valued at approximately $5.2 million or approximately $5.53 per share,
the then current market price.
During the twelve months ended June 30, 2000, the Company acquired CollegeWeb,
Invino, sixdegrees and CommonPlaces. The following unaudited pro forma
information is presented as if the Company had completed the acquisitions of
CollegeWeb, Invino, sixdegrees, CommonPlaces and Teen.com as of July 1, 2000 and
1999 respectively.
Three months ended September 30,
--------------------------------
1999 2000
------------ -----------
Net revenue $ 10,414,000 $ 10,834,000
Net loss (27,327,000) (27,297,000)
Net loss per basic and diluted
common share (1.06) (.94)
Weighted average common shares
outstanding basic and diluted 25,757,000 29,010,000
The pro forma information above is not necessarily indicative of the results of
operations that would have occurred had the acquisitions been made at the
beginning of the respective periods.
5
<PAGE>
YOUTHSTREAM MEDIA NETWORKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
(UNAUDITED)
3. LONG-TERM DEBT
A summary of long-term debt is as follows:
<TABLE>
<CAPTION>
September 30, June 30,
2000 2000
------------ -----------
<S> <C> <C>
Note Payable to Bank (A) $ 1,572,000 $ 1,739,000
Subordinated notes - Private Placement (B) 5,000,000 5,000,000
Note Payable to Finance Company (C) 1,625,000 1,768,000
Subordinated Notes - Private Placement (D) 12,000,000 12,000,000
Subordinated Notes - Private Placement (E) 1,000,000 --
Other 9,000 9,000
----------- -----------
21,206,000 20,516,000
Less unamortized original issue discount
attributed to subordinated notes 538,000 532,000
----------- -----------
20,668,000 19,984,000
Less current portion 1,131,000 1,275,000
----------- -----------
$19,537,000 $18,709,000
=========== ===========
</TABLE>
(A) This loan is secured by all of the assets of Campus Voice, Beyond the Wall
and American Passage (the "Borrowers") and is guaranteed by NET. This loan is
payable in equal monthly installments, commencing in February 1998, over a
maximum of six years. Interest is payable monthly at a rate of interest of 275
basis points above LIBOR for U.S. dollar deposits of one month maturity.
The Borrowers are also party to an interest rate exchange agreement originally
converting $3.0 million of the aforementioned floating rate debt to a fixed
rate. The balance of the interest rate agreement at September 30, 2000 was
$1,278,000. Under the interest rate exchange agreement, the Borrowers are
required to pay interest at a fixed rate of 9.11% on the notional amount covered
by the interest rate exchange agreement. In return, the Company receives
interest payments on the same notional amount at the prevailing LIBOR rate plus
275 basis points. The interest rate exchange agreement terminates in June 2002.
(B) In July 1998, the Company issued Subordinated Notes to accredited investors
in the aggregate amount of $5,000,000 less an original discount of $188,000.
These notes bear interest at 11% per annum and are due in July 2003. In
connection with the issuance of the Subordinated Notes, the Company issued
375,000 warrants to the accredited investors for $188,000, and 150,000 warrants
to the placement agent. Each warrant, which expires in July 2003, entitles the
holder to purchase one share of the Company's common stock for $4.125, the
market price of the Company's common stock at the date of issuance. Based on an
independent appraisal, the 525,000 warrants were valued at $740,000. The value
of the warrants and closing costs of $314,000 have been recorded as deferred
financing costs and are being amortized over the term of the Subordinated Notes.
The original issue discount of $188,000 is also being amortized over the term of
the related debt.
(C) In March 2000, the Company issued a note to a finance company in the amount
of $1,971,000. The note bears interest at the rate of 11.95% per annum and is
payable in 36 equal monthly payments commencing in March 2000. The note is
secured by certain equipment owned by NET.
(D) In June 2000, the Company issued a subordinated note to an accredited
investor in the amount of $12,000,000, less an original issue discount of
$420,000. The note bears interest at 11% per annum and is due in June 2005. In
connection with the issuance of the subordinated note, the Company issued
1,020,000 warrants to an accredited investor in exchange for $420,000. Each
warrant, which expires in June 2005, entitles the holder to purchase one share
of the Company's common stock for $5.9375, the market price of the Company's
common stock at the date of issuance. Based on an independent appraisal, the
1,020,000 warrants were valued at $3,346,000. The value of the warrants and
closing costs of $494,000 were recorded as deferred financing costs and are
being amortized over the term of the subordinated note. The original issue
discount of $420,000 is being amortized over the term of the related debt.
(E) In July 2000, the Company issued a subordinated note to an accredited
investor in the amount of $1,000,000, less an original issue discount of
$35,000. The note bears interest at 11% per annum and is due in July 2005. In
connection with the issuance of the subordinated note, the Company issued 60,000
warrants to an accredited investor in exchange for $35,000. Each warrant, which
expires in July 2005, entitles the holder to purchase one share of the Company's
common stock for $3.75, the market price of the Company's common stock at the
date of issuance. Based on an independent appraisal, the 60,000 warrants were
valued at $197,000. The value of the warrants was recorded as deferred financing
costs and is being amortized over the term of the subordinated note. The
original issue discount of $35,000 is being amortized over the term of the
related debt.
6
<PAGE>
YOUTHSTREAM MEDIA NETWORKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
(UNAUDITED)
4. STOCKHOLDERS' EQUITY
For the three months ending September 30, 2000, options were exercised resulting
in the issuance of approximately 45,000 shares of common stock resulting in net
proceeds to the Company of approximately $127,000.
5. SEGMENT INFORMATION
The Company operates in two business segments, on-line and off-line. The on-line
segment consists of the operations of the Company's websites. The off-line
segment consists of traditional print media and promotions.
Three months ended
September 30, 2000
---------------------
Segment
(in thousands)
On-line Off-line
Net revenues from external customers $ 464 $ 10,322
Intersegment revenues 7 108
Depreciation and amortization 18,150 1,867
Operating loss (24,310) (2,577)
Identifiable assets 178,468 78,951
Capital expenditures 254 229
Segment information is not shown for the three month period ended September 30,
1999 as there was no significant on-line activity during the period.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion of the financial condition and results of operations of
the Company should be read in conjunction with the consolidated financial
statements and related notes thereto. The following discussion contains certain
forward-looking statements that involve risks and uncertainties. The Company's
actual results could differ materially from those discussed herein. Factors that
could cause or contribute to such differences include, but are not limited to,
the ability to obtain financing, integration of acquisitions, the management of
growth, changing consumer tastes and general economic conditions. The Company
undertakes no obligation to publicly release the results of any revisions to
these forward-looking statements that may be made to reflect any future events
or circumstances.
The following financial analysis compares the three months ended September 30,
2000 (unaudited) to the three months ended September 30, 1999 (unaudited).
RESULTS OF OPERATIONS
For the three months ended September 30, 2000, net revenues were $10,786,000 as
compared to $10,361,000 for the three months ended September 30, 1999. The
increase of $425,000 was primarily due to the acquisition of on-line businesses,
which accounted for $464,000 of the increase. The remaining $39,000 decrease is
due to the loss of contributed media revenues for CommonPlaces of $792,000
offset by $753,000 increases in off-line revenues.
For the three months ended September 30, 2000 and September 30, 1999, cost of
goods sold was $1,358,000 and $1,386,000, respectively. It is all related to
Trent's operations.
For the three months ended September 30, 2000, selling, general and
administrative expenses were $14,670,000 as compared to $6,882,000 for the three
months ended September 30, 1999. The $7,788,000 increase is due primarily to an
increase in the acquired on-line businesses of $6,732,000. This increase is
primarily the result of salary and related costs of $3,013,000, severance costs
of approximately $1,000,000, promotional costs of $900,000 and consulting costs
of $400,000. Also contributing to the overall increase in selling, general and
administrative expenses is approximately of $1,056,000 attributable to an
increase in the level of administrative staff and related costs in the off-line
businesses.
For the three months ended September 30, 2000, corporate expenses were
$1,628,000 as compared to $873,000 for the three months ended September 30,
1999. The increase of $755,000 is primarily due to increased corporate personnel
and related overhead expenses required to support the Company's growth.
For the three months ended September 30, 2000, depreciation and amortization
expenses were $20,017,000 as compared to $917,000 for the three months ended
September 30, 1999. The increase of $19,100,000 was primarily due to the
acquisition of on-line businesses and the related amortization of goodwill.
For the three months ended September 30, 2000, there was no equity loss in
investment as compared to $792,000 for the three months ended September 30,
1999. Equity loss in investment represented the Company's minority interest
share of the loss in CommonPlaces. Recognition of such loss was limited to
the Company's investment in CommonPlaces.
For the three months ended September 30, 2000, interest income was $769,000 as
compared to $227,000 for the three months ended September 30, 1999. The increase
of $542,000 was due to interest income earned on increased cash balances
resulting from the issuance of debt and the sale of common stock.
For the three months ended September 30, 2000, other income was $27,000 as
compared to $150,000 for the three months ended September 30, 1999. The decrease
of $123,000 was primarily due to licensing fees relating to CollegeWeb due from
Common Places prior to the merger of CommonPlaces with the Company.
For the three months ended September 30, 2000, interest expense was $865,000 as
compared to $249,000 for the three months ended September 30, 1999. The increase
of $616,000 primarily related to the increase in long-term debt.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
In July 2000, the Company realized net proceeds of approximately $1,000,000 from
the sale of an 11% Subordinated Note and warrants to purchase 60,000 shares of
the Company's common stock.
The Company used approximately $4.7 million in its operating activities in the
first three months of fiscal year 2001 as compared to $661,000 in the first
three months of fiscal year 2000. The increase of approximately $4.0 million
represents the increase in net loss, accounts receivable and other assets and
the decrease in short-term liabilities offset by the increase in depreciation
and amortization. Cash provided by investing activities in the first three
months of fiscal year 2001 of approximately $3.0 million is composed primarily
of sale of investments in marketable securities offset by capital expenditures.
Cash provided by financing activities in the first three months of fiscal year
2001 of approximately $614,000 is primarily attributable to the issuance of
long-term debt offset by repayments of capitalized lease obligations and
long-term debt.
The Company's primary capital requirements with respect to its operations have
been to fund corporate overhead and its on-line businesses as well as its
network of campus theaters and postcard distribution. As of September 30, 2000,
the Company had approximately $17.2 million in cash and cash equivalents. The
Company believes that such amounts plus an additional amount of $21.4 million,
which represents investments in marketable debt securities with maturities of
less than one year, will be sufficient to fund working capital, including debt
service and interest requirements. In the event that the Company's plans and
assumptions with respect to its network of campus theaters change or prove to be
inaccurate, if its assumptions with respect to NET, American Passage, Campus
Voice, Beyond the Wall and Trent being able to fund their operations and to make
debt service payments out of their own cash flow in the future prove to be
inaccurate, or if the working capital or capital expenditure requirements of
sixdegrees, CommonPlaces, American Passage, Campus Voice, Beyond the Wall, Trent
or Teen.com prove to be greater than anticipated, the Company could be required
to seek additional financing.
The Company's ability to improve its operations will be subject to prevailing
economic conditions and to legal, financial, business, regulatory, industry and
other factors, many of which are beyond the Company's control. The Company may
also seek additional debt or equity financing to fund the cost of its on-line
business, to expand its network of campus theaters, to develop or acquire
additional media and marketing services businesses or to fund its operations. To
the extent that the Company finances its requirements through the issuance of
additional equity securities, any such issuance would result in dilution to the
interests of the Company's stockholders.
Additionally, to the extent that the Company incurs indebtedness or issues debt
securities in connection with financing activities, the Company will be subject
to all of the risks associated with incurring substantial indebtedness,
including the risk that interest rates may fluctuate and cash flow may be
insufficient to pay principal and interest on any such indebtedness. The Company
has no current arrangements with respect to, or sources of, additional
financing. There can be no assurance that any additional financing will be
available to the Company on acceptable terms, if at all.
9
<PAGE>
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10.47* Employment Agreement dated October 30, 2000 between YouthStream
Media Networks, Inc. and Irwin Engelman.
10.48* Non-Qualified Stock Option Agreement dated October 30, 2000 of
Irwin Engelman.
10.49* Non-Qualified Stock Option Agreement (Issued Pursuant to
YouthStream Media Networks, Inc. 2000 Stock Incentive Plan) dated
October 30, 2000 of Irwin Engelman.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K.
None
-------------
*Filed herewith
10
<PAGE>
SIGNATURES
In accordance with 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 14, 2000
YOUTHSTREAM MEDIA NETWORKS, INC.
BY: /s/ JAMES G. LUCCHESI
-----------------------------------------
JAMES G. LUCCHESI
President and
Chief Executive Officer
BY: /s/ IRWIN ENGELMAN
-----------------------------------------
IRWIN ENGELMAN
Executive Vice President,
Chief Financial Officer and
Chief Accounting Officer
11
