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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
January 11, 2000
Date of report (Date of earliest event reported)
K-TEL INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Charter)
MINNESOTA 0-6664 41-0946588
(State or Other (Commission File Number) (IRS Employer
Jurisdiction Identification No.)
of Incorporation)
2605 Fernbrook Lane North, Plymouth, Minnesota 55447-4736
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(Address of Principal Executive Offices)
(612) 559-6800
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(Registrant's telephone number, including area code)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not Applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Not Applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not Applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not Applicable.
ITEM 5. OTHER EVENTS.
On January 11, 2000, the registrant was named in a lawsuit entitled
CHRISTOPHER EARLY V. K-TEL INTERNATIONAL, INC., ET AL, brought in the Circuit
Court of Cook County, Illinois, against the registrant and certain of its
subsidiaries by Christopher Early. The suit also names as defendants certain
other manufacturers, distributors and a number of nationwide retailers. The
plaintiff seeks damages on behalf of himself and a purported class of
purchasers of cassette tapes and compact discs produced, distributed and/or
sold by the defendants. The plaintiff claims that the defendants engaged in
deceptive and misleading packaging of cassette tapes and compact discs by
failing to give proper notice to consumers that the songs contained therein
are not the original recordings by the original artists. The complaint also
alleges consumer fraud, deceptive and unfair practices, and fraud in
connection with website advertising and marketing. Similar litigation against
the registrant had been brought by Mr. Early in 1997, and was dismissed by a
U.S. federal court in 1999 on jurisdictional grounds. The registrant denies
that it mislabeled cassette tapes and compact discs or engaged in fraudulent
or deceptive conduct and intends to vigorously defend the purported action,
which seeks an undetermined amount of compensatory damages and punitive
damages in the amount of $10.0 million, an injunction and costs incurred in
the litigation, including attorneys fees. Based upon information available to
it, the registrant further believes that damages, if any, are speculative and
that there are no grounds for an award of punitive damages. While discovery
has not yet begun and no assurance can be given that the registrant will be
successful in defending this action, the registrant believes it has
meritorious defenses to all of the plaintiff's claims.
This Report on Form 8-K contains certain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. Such forward-looking
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statements may be identified by the use of terminology such as "may," "will,"
"expect," "anticipate," "estimate," "should," or "continue" or the negative
thereof or other variations thereon or comparable terminology. Such
forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from historical results
or from those results currently anticipated or projected. Such factors
include, among other things, the following: consumer purchasing; demand for
and market acceptance of new and existing products; the impact from
competition for Internet content, merchandise and recorded music;
relationships with suppliers, market acceptance of the Internet for commerce
and as a medium for advertising; success of marketing and promotion efforts;
technological changes and difficulties; availability of financing; foreign
currency variations; general economic, political and business conditions; and
other matters set forth under the caption "Cautionary Statements" in Exhibit
99 in the registrant's Annual Report on Form 10-K for the year ended June 30,
1999.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
Not applicable
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SIGNATURE
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 thereunto duly authorized.
Date: January 21, 2000 By: /s/ Steven A. Kahn
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Name: Steven A. Kahn
Title: Chief Financial Officer
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