SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): December 23, 1999
(November 12, 1999)
Rare Medium Group, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 000-13865 23-2368845
(State or Other (Commission File No.) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
565 Fifth Avenue, 29th Floor, New York, New York 10017
(Address of Principal Executive Offices, including Zip Code)
(212) 883-6940
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
The undersigned registrant hereby amends and restates Item 7 of its current
report on Form 8-K, originally filed with the Securities and Exchange
Commission on November 24, 1999 to include the requisite historical
financial information of College Media, Inc. and CMJ Oniline, Inc. and the
pro foma financial statements of the registrant. The complete text of Item
7 as amended and restated is as follows.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
Financial Statements of College Media, Inc. and CMJ
Online, Inc.
Independent Auditors' Report
Combined Balance Sheets as of September 30, 1999 (unaudited),
December 31, 1998 and 1997
Combined Statements of Operations and deficiency for the nine-
month period ended September 30, 1999 (unaudited) and for
the years ended December 31, 1998 and 1997
Combined Statements of Cash Flows for the nine-month
period ended September 30, 1999 (unaudited) and for
the years ended December 31, 1998 and 1997
Notes to Combined Financial Statements
(b) Pro Forma Financial Information.
Overview
Unaudited Pro Forma Condensed Consolidated Statements
of Operations for the year ended December 31, 1998
and for the nine-month period ended September 30,
1999
Unaudited Pro Forma Condensed Consolidated Balance
Sheet as of September 30, 1999
Notes to the Unaudited Pro Forma Condensed
Consolidated Financial Statements
(c) Exhibits.
Exhibit No. Description
2.1* Agreement and Plan of Merger, dated
as of the 12th day of November, 1999,
by and among Changemusic.com, Inc., a
Delaware corporation, College Media,
Inc., a New York corporation, and
CMJ.com, Inc., a Delaware
corporation.
2.2* Stock Purchase Agreement dated as of
the 12th day of November, 1999, by
and among College Media, Inc., a New
York corporation, Robert Haber,
Joanne Haber, Lee Haber, Diane
Turofsky and Rare Medium Group, Inc.,
a Delaware corporation.
2.3* Securities Purchase Agreement, dated
as of the 12th day of November, 1999,
between Rare Medium Group, Inc., a
Delaware corporation, and CMJ.com,
Inc., a Delaware corporation.
23.1 Consent of Independent Public
Accountant
* Previously filed with Rare Medium Group, Inc.'s
Current Report on Form 8-K, dated November 24,
1999, and incorporated herein by reference.
INDEPENDENT AUDITOR'S REPORT
To the Members of
College Media, Inc. and CMJ Online, Inc.
We have audited the combined balance sheets of College Media, Inc. and CMJ
Online, Inc. (the Company") as of December 31, 1998 and 1997 and the
related combined statements of operations and deficiency and cash flows for
the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these combined financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the combined financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of the Company at
December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted
accounting principles.
/s/ Rubin & Katz LLP
New York, New York
December 16, 1999
COLLEGE MEDIA, INC. AND CMJ ONLINE, INC.
COMBINED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30,
1999 DECEMBER 31,
(UNAUDITED) 1998 1997
--------------------------------------------------
ASSETS
<S> <C> <C> <C>
Accounts receivable, net of allowance $ 860,461 $ 545,496 $ 491,553
Property and equipment net of
accumulated depreciation 46,379 53,504 58,323
Other assets 26,704 24,752 21,729
------------ ----------- -----------
Total Assets $ 933,544 $ 623,752 $ 571,605
============ =========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Bank loan payable $ 100,000 $ 100,000 $ 100,000
Accounts payable 1,818,369 1,323,853 822,720
Accrued expenses 185,424 146,635 52,676
Unearned revenue 1,175,440 1,377,643 1,498,230
Due to affiliates 803,664 665,071 363,523
------------- ----------- -----------
Total Liabilities 4,082,897 3,613,202 2,837,149
Common stock ($1 par value, 300 shares
authorized, 222 shares issued and
outstanding) 222 222 222
Due from officer (225,066) (202,513) (54,461)
Deficit (2,924,509) (2,787,159) (2,211,305)
------------- ------------ ------------
Total Stockholders' Deficit (3,149,353) (2,989,450) (2,265,544)
------------- ------------ ------------
Total Liabilities and Stockholders' Deficit $ 933,544 $ 623,752 $ 571,605
============= ============ ===========
See notes to combined financial statements.
</TABLE>
COLLEGE MEDIA, INC. AND CMJ ONLINE, INC.
COMBINED STATEMENTS OF OPERATIONS AND DEFICIENCY
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEARS ENDED
SEPTEMBER 30, DECEMBER 31,
1999 1998 1997
(UNAUDITED)
-----------------------------------------------------
Revenue, net:
<S> <C> <C> <C>
Publishing $ 3,372,273 $ 4,223,345 $ 3,965,268
Events 1,151,659 1,029,968 1,001,043
Other 151,580 157,331 284,720
------------- ------------ ------------
4,675,512 5,410,644 5,251,031
Cost of production 4,025,238 5,030,437 4,474,639
Selling, general and
administrative expenses 689,834 828,843 782,024
Depreciation and amortization 18,153 30,186 34,816
------------- ------------ ------------
4,733,225 5,889,466 5,291,479
------------- ------------ ------------
Loss from operations (57,713) (478,822) (40,448)
Interest expense, net (79,637) (97,032) (80,564)
-------------- ------------- -------------
Net loss (137,350) (575,854) (121,012)
Deficit - beginning of period (2,787,159) (2,211,305) (2,090,293)
-------------- ------------- -------------
Deficit - end of period $ (2,924,509) $ (2,787,159) $ (2,211,305)
============== ============= =============
See notes to combined financial statements.
</TABLE>
COLLEGE MEDIA, INC. AND CMJ ONLINE, INC.
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1999 YEARS ENDED
(UNAUDITED) DECEMBER 31
1998 1997
------------------------------------------------------
Cash flows from operating activities
<S> <C> <C> <C>
Net loss $ (137,350) $ (575,854) $ (121,012)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 18,153 30,186 34,816
Changes in operating assets and liabilities:
Accounts receivable (314,965) (53,943) (1,526)
Due from officer (22,553) (148,052) (43,751)
Other assets (1,952) (3,023) (10,754)
Accounts payable and
accrued expenses 533,305 595,092 74,209
Unearned revenue (202,203) (120,587) 57,628
----------- ------------ -----------
Net cash used in operating activities (127,565) (276,181) (10,390)
Cash flows from investing activities
Additions to property and equipment (11,028) (25,367) (26,237)
Cash flows from financing activities
Due to affiliates 138,593 301,548 36,627
----------- ---------- -----------
Net increase in and cash at the
beginning and end of the period $ - $ - $ -
=========== ========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid $ 99,542 $ 102,936 $ 78,597
========== ========== ===========
See notes to combined financial statements.
</TABLE>
COLLEGE MEDIA, INC. AND CMJ ONLINE, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION
THE COMPANY
College Media, Inc. and CMJ Online, Inc. (collectively "CMJ" or
the "Company") is a multi platform media company providing both
music consumers and music industry professionals with music
news, commentary, market data and industry analysis focusing on
the college and emerging music markets. The Company operates in
three different business: (1) publishing, (2) events and (3)
Internet. The publishing business is engaged in publishing
magazines and electronic information. The events business is
engaged in the organization production and management of trade
shows for the music industry. The internet business is engaged
in providing the music consumer and the music industry
professional updated market data and industry analysis.
Subsequent to September 30, 1999 the assets of CMJ Online, Inc.
were transferred to College Media, Inc. at book value.
The Company merged with Changemusic.com, Inc. on November 12,
1999.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF COMBINATION
The financial statements were prepared on a combined basis. All
significant transactions between the entities have been
eliminated in combination.
REVENUE RECOGNITION
Advertising revenue for the Company's publications is recognized
as income in the month that the related publications are sent to
subscribers or become available at newsstands.
Publishing revenue consists of both subscription revenue and
single copy newsstand sales. Subscription revenue is deferred
and recognized as income in the month that the related
publications are sent to the subscribers. Newsstand sales, less
estimated returns, are recognized in the month that the related
publications become available for sale at newsstands.
Event and internet revenue is recognized as income when earned.
Payments received in advance are deferred and included in
unearned revenue.
USE OF ESTIMATES
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost, less accumulated
depreciation. Depreciation is computed over the estimated useful
lives of the assets which range from 5 to 7 years. Leasehold
improvements are amortized over the remaining life of the lease.
INCOME TAXES
The Company is an S Corporation under the Internal Revenue Code;
accordingly the accompanying financial statements do not include
a provision for state and federal income taxes since, pursuant
to provisions of the Internal Revenue Code, each item of income,
gain, loss, deduction and credit is allocated to and reportable
by the members of the corporation.
NOTE 3 - INTERIM FINANCIAL INFORMATION
The accompanying unaudited financial statements as of and for
the period ended September 30, 1999 have been prepared in
accordance with generally accepted accounting principles for
interim financial information and Article 10 of Regulation S-X.
In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the
period ended September 30, 1999 are not necessarily indicative
of the results that may be expected for the year ended December
31, 1999.
NOTE 4 - BANK LOAN PAYABLE
The Company entered into a line of credit agreement with Fleet
Bank for an amount up to $100,000. The line of credit bears
interest at Prime plus 1.5%. The outstanding balance was
$100,000 at September 30, 1999, (unaudited) December 31, 1998
and 1997. The interest rate at September 30, 1999, December 31,
1998 and 1997 was 9.75% (unaudited), 9.25% and 10%,
respectively. Interest only payments are required on a monthly
basis. Interest expense at September 30, 1999, December 31, 1998
and 1997 amounted to $6,292 (unaudited), $9,990 and $9,836,
respectively.
NOTE 5 - ACCOUNTS RECEIVABLE, NET
Accounts receivable, net consist of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30,
1999 DECEMBER 31,
(UNAUDITED) 1998 1997
-------------------------------------------------------
<S> <C> <C> <C>
Accounts receivable $ 830,610 $ 484,907 $ 360,621
Subscriptions receivable 120,145 129,883 196,226
Allowance for doubtful
accounts, returns and
cancellations (90,294) (69,294) (65,294)
----------- ----------- -----------
$ 860,461 $ 545,496 $ 491,553
=========== =========== ===========
</TABLE>
COLLEGE MEDIA, INC. AND CMJ ONLINE, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 6 - PROPERTY AND EQUIPMENT, NET
<TABLE>
<CAPTION>
SEPTEMBER 30,
1999 DECEMBER 31,
(UNAUDITED) 1998 1997
-----------------------------------------------
<S> <C> <C> <C>
Computers and equipment $ 141,857 $ 132,445 $ 213,451
Leasehold improvements 39,549 39,549 39,549
Furniture and fixtures 6,227 4,610 19,107
---------- ---------- ----------
$ 187,633 $ 176,604 $ 272,107
Accumulated depreciation
and amortization (141,254) (123,100) (213,784)
----------- ----------- ----------
$ 46,379 $ 53,504 $ 58,323
========== ========== ==========
</TABLE>
NOTE 7- UNEARNED INCOME
Unearned income consists of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30,
1999 DECEMBER 31,
(UNAUDITED) 1998 1997
------------------------------------------------
<S> <C> <C> <C>
Unexpired subscriptions $ 879,480 $ 1,104,558 $ 1,130,071
Advertising contracts 295,960 273,085 368,159
----------- ----------- -----------
$1,175,440 $ 1,377,643 $ 1,498,230
========== =========== ===========
</TABLE>
COLLEGE MEDIA, INC. AND CMJ ONLINE, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 8 - OPERATING LEASE COMMITMENTS
The Company is obligated under various equipment operating
leases, which expire at various dates through May, 2002. Future
minimum commitments under non-cancelable operating leases are
approximately as follows:
Year ended December 31,
1999 $60,000
2000 22,000
2001 8,000
2002 3,000
-------
Total $93,000
=======
NOTE 9 - RELATED PARTY TRANSACTIONS
At September 30, 1999, December 31, 1998 and 1997, loans to
officers amounted to $225,066 (unaudited) $202,513, and $54,461
respectively, including accrued interest. The loan is payable on
demand and bears interest at 8%.
Included in due to affiliates, are various liabilities to the
Haber family (the Company's principals). The amounts are payable
on demand. At September 30, 1999, December 31, 1998 and 1997 the
outstanding balances are $81,644 (unaudited) $38,944 and
$30,782, respectively.
The Company utilizes the personal credit cards of the Haber
Family. Included in due to affiliates, at September 30, 1999,
December 31, 1998 and 1997, are credit card payables amounting
to $722,020 (unaudited) $626,127, and $332,741, respectively.
The interest rates on the credit cards range from 16% to 22%.
Interest expense relating to the credit card payable at
September 30, 1999, December 31, 1998 and 1997 amounted to
$93,250 (unaudited), $92,946 and $68,761, respectively.
NOTE 10 - IMPACT OF THE YEAR 2000 (UNAUDITED)
The Company has assessed the year 2000 issue, and has developed
an action plan which addresses the issue. Management believes
that the year 2000 issue will not materially affect the
Company's future operating results or financial position.
Unaudited Pro Forma Condensed Consolidated Financial Information
The following Unaudited Pro Forma Condensed Consolidated Statements of
Operations assume that the Rare Medium Group, Inc. and subsidiaries (RMG)
purchase of common stock of College Media, Inc., which include the
operations of CMJ Online, Inc. (collectively, CMJ), representing a 25%
interest and the merger of RMG's 96% owned subsidiary, ChangeMusic.com,
Inc. (ChangeMusic.com) with CMJ to form CMJ.com, Inc. (CMJ.com)
(individually and collectively, the "Acquisition") had occurred on January
1, 1998, combining RMG and the combined results of CMJ for the year ended
December 31, 1998 and nine months ended September 30, 1999. The Unaudited
Pro Forma Condensed Consolidated Balance Sheet as of September 30, 1999
reflects the Acquisition as if it had occurred on September 30, 1999. The
pro forma information does not include the effects of RMG's purchase of the
Series A Preferred Stock issued by CMJ.com as such transactions are between
RMG and a consolidated subsidiary.
The pro forma information is derived from the historical financial
statements of RMG and CMJ, after giving effect to the Acquisition using the
purchase method of accounting and assumptions and adjustments considered
appropriate by RMG, certain of which are described in the accompanying
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
The allocation of purchase price to the assets acquired and liabilities
assumed has been made using estimated fair values. These estimates may be
subject to adjustment to reflect actual amounts, primarily in the case of
accrued liabilities. Any subsequent adjustments are not expected to be
material. The pro forma information is provided for illustrative purposes
only and is not necessarily indicative of the results of operations or
financial condition that actually would have been obtained if the
acquisition had occurred on the dates indicated or of the operating results
that may be obtained in the future.
The Unaudited Pro Forma Condensed Consolidated Financial Information should
be read in conjunction with the historical financial statements, and the
related notes thereto, of RMG and CMJ. The historical financial statements
of CMJ as of and for the year ended December 31, 1998 and the related notes
thereto, and the historical financial statements of CMJ as of and for the
nine-month period ended September 30, 1999 and the related notes thereto
are included herein. The historical financial statements of RMG and the
related notes thereto as of and for the year ended December 31, 1998 and as
of and for the nine-month period ended September 30, 1999 and the related
notes thereto, have been previously filed with the Securities and Exchange
Commission.
<TABLE>
<CAPTION>
RARE MEDIUM GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(000's OMITTED EXCEPT PER SHARE DATA)
Historical
Historical College Media,
Rare Medium Inc. and CMJ Pro Forma Pro Forma
Group, Inc. Online, Inc.(1) adjustments as adjusted
<S> <C> <C> <C> <C>
Revenue $ 4,688 $ 5,411 $ 10,099
Total expenses 22,764 5,890 2,674 (2) 31,328
-------- ----------- --------- ----------
Loss from operations (18,076) (479) (2,674) (21,229)
Interest expense, net (1,279) (97) (1,376)
--------- ----------- -----------
Loss before income taxes and
discontinued operation (19,355) (576) (2,674) (22,605)
Income tax expense 355 - 355
---------- ----------- ------- -----------
Loss before discontinued operations (19,710) (576) (2,674) (22,960)
Discontinued operation:
Loss from discontinued operation (4,538) (4,538)
Gain on restructuring of Engelhard/ICC 24,257 24,257
Loss on sale of FAS (628) - (628)
---------- ----------- -------- -----------
Income from discontinued operation 19,091 - 19,091
---------- ----------- -------- -----------
Net loss $ (619) $ (576) $ (2,674) $ (3,869)
========== =========== ======== ===========
Basic and diluted earnings (loss) per share:
Continuing operations $ (0.78) $ (0.90)
Discontinued operations 0.76 0.75
---------- ------------
Net loss per share $ (0.02) $ (0.15)
Weighted average common shares outstanding 25,282,002 180,860(3) 25,462,862
</TABLE>
See accompanying notes to unaudited pro forma condensed consolidated
financial statements.
<TABLE>
<CAPTION>
RARE MEDIUM GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1999
(000's OMITTED EXCEPT PER SHARE DATA)
Historical
Historical College Media,
Rare Medium Inc. and CMJ Pro Forma Pro Forma
Group, Inc. Online, Inc.(1) adjustments as adjusted
<S> <C> <C> <C> <C>
Revenue $ 19,080 $ 4,676 $ 23,756
Total expenses 46,911 4,733 2,006(2) 53,650
---------- ----------- -------- -----------
Loss from operations (27,831) (57) (2,006) (29,894)
Interest expense, net (1,407) (80) (1,487)
---------- ----------- -------- -----------
Net loss (29,238) (137) (2,006) (31,381)
Deemed dividend attributable to issuance of
convertible preferred stock (29,879) - (29,879)
Cumulative dividends and accretion of
convertible preferred stock to
liquidation value (4,663) - (4,663)
---------- -----------
Net loss attributable to
common stockholders $ (63,780) $ (137) $ (2,006) $ (65,923)
========== ========== ========= ===========
Basic and diluted loss per share $ (1.81) (1.86)
Weighted average common shares outstanding 35,320,850 180,860(3) 35,501,710
</TABLE>
See accompanying notes to unaudited pro forma condensed consolidated
financial statements.
<TABLE>
<CAPTION>
RARE MEDIUM GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1999
(000'S OMITTED)
Historical College Media,
Rare Medium Inc. and CMJ Pro Forma Pro Forma
Group, Inc. Online, Inc.(1) adjustments as adjusted
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 59,374 $ - $ (1,000)(3) $ 58,374
Accounts receivable, net 7,297 860 8,157
Work in process 3,125 - 3,125
Prepaid expenses and other current assets 2,621 - 2,621
---------- -------- --------- ----------
Total current assets 72,417 860 (1,000) 72,277
Property, plant and equipment, net 7,839 46 7,885
Investments in affiliates 14,551 - 14,551
Intangibles, net 57,720 - 8,022(4) 65,742
Other assets 1,198 27 1,225
---------- -------- --------- ----------
Total assets $ 153,725 $ 933 $ 7,022 $ 161,680
========== ========= ========= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 9,202 $ 2,004 $ 11,206
Deferred revenue 606 1,175 1,781
Current portion of notes payable 3,844 904 4,748
----------- --------- ----------
Total current liabilities 13,652 4,083 17,735
----------- --------- ----------
Notes payable - related parties 2,990 2,990
Other noncurrent liabilities 184 184
----------- --------- ----------
Total liabilities 16,826 4,083 20,909
----------- --------- ----------
Series A Convertible Preferred Stock, $.01
par value, net of unamortized discount 34,553 - 34,553
---------- --------- ----------
Stockholders' equity:
Preferred stock, $.01 par value
Common stock, $.01 par value 407 2(3),(5) 409
Additional paid-in capital 216,261 - 3,870(3) 220,131
Note receivable from shareholder (230) (225) 225(5) (230)
Accumulated deficit (113,921) (2,925) 2,925(5) (113,921)
Treasury stock, at cost (171) - (171)
----------- --------- ---------- ----------
Total stockholders' equity 102,346 (3,150) 7,022 106,218
----------- --------- ---------- ----------
Total liabilities and stockholders' equity $ 153,725 $ 933 $ 7,022 $ 161,680
=========== ========= ========== ==========
</TABLE>
See accompanying notes to unaudited pro forma condensed
consolidated financial statements.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(000'S OMITTED EXCEPT SHARE AND PER SHARE DATA)
(1) Represents the historical financial information of CMJ. The
historical financial information was derived from the audited
combined financial statements of CMJ for the year ended December
31, 1998 and the unaudited combined financial statements as of and
for the nine-month period ended September 30, 1999.
(2) Reflects an adjustment of $2,674 and $2,006 for the year ended
December 31, 1998 and the nine-month period ended September 30,
1999, respectively, which represents the amortization of goodwill
over a three year period as a result of the acquisition of CMJ.
(3) Represents the Acquisition price consideration paid by RMG
consisting of (a) $1,000 in cash and 180,860 shares of RMG common
stock valued at $21.41 per share, based on the fair value of RMG's
common stock at the time of the purchase of 25% of CMJ and (b) the
contribution of RMG's interest in ChangeMusic.com into CMJ.com
pursuant to the merger agreement. The book value of RMG's
investment in ChangeMusic.com and CMJ approximates the value of
RMG's effective ownership in CMJ.com.
(4) Represents the excess of the Acquisition price over the fair value
of the identifiable assets, net of liabilities assumed, in the
amount of $8,022 arising from the Acquisition. No amounts have been
recorded with respect to minority interest receivable as there is no
future funding requirement by the minority interest shareholder.
(5) Reflects the removal of the historical equity of CMJ resulting from
the Acquisition.
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 hereto duly authorized.
RARE MEDIUM GROUP, INC.
(Registrant)
DATE: December 23, 1999: /s/ Jeffrey J. Kaplan
-------------------------
Name: Jeffrey J. Kaplan
Title: Executive Vice President and
Chief Financial Officer
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Stockholders
Rare Medium Group, Inc.
We consent to the use of our report dated December 16, 1999, included
elsewhere herein, on the combined financial statements of College Media,
Inc. and CMJ Online, Inc. as of and for the years ended December 31, 1998
and 1997.
/s/ Rubin & Katz LLP
New York, New York
December 21, 1999
