<PAGE> 1
================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
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 0-15445
VIDEO JUKEBOX NETWORK, INC.
- - --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Florida 59-2605267
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
1221 Collins Avenue, Miami Beach, Florida 33139
- - --------------------------------------------------------------------------------
(Address of principal executive offices)
(305)-674-5000
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 12 months (or for 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
----- -----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Class Number of Shares Outstanding
on May 10, 1995
Common Stock, Par Value $.001 Per Share 23,673,281
Transitional Small Business Disclosure Format: Yes No X
---- ----
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VIDEO JUKEBOX NETWORK, INC.
INDEX
<TABLE>
<S> <C> <C>
PART I FINANCIAL INFORMATION PAGE
Item 1 Financial Statements
Consolidated Balance Sheet at
March 31, 1995 (Unaudited) 3
Consolidated Statements of Operations
for the Three Months ended March 31,
1995 and 1994, (Unaudited) 4
Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 1995
and 1994 (Unaudited) 5
Notes to Financial Statements 6
Item 2 Management's Discussion and Analysis or
Plan of Operation 8
PART II OTHER INFORMATION
Item 5 Other Information 13
Item 6 Exhibits 13
SIGNATURES 14
</TABLE>
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VIDEO JUKEBOX NETWORK, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
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<TABLE>
<CAPTION>
MARCH 31,
1995
------------
<S> <C>
ASSETS:
- - -------
CURRENT ASSETS
Cash and cash equivalents $ 7,373,840
Accounts receivable, less allowances for chargebacks
and doubtful accounts of $ 1,357,250 1,829,225
Merchandise Inventory 20,000
Prepaid expenses 339,052
------------
TOTAL CURRENT ASSETS 9,562,117
------------
PROPERTY AND EQUIPMENT, NET 3,020,082
DEFERRED COSTS AND OTHER ASSETS, NET 462,848
------------
TOTAL ASSETS $ 13,045,047
============
LIABILITIES AND STOCKHOLDERS' EQUITY:
- - -------------------------------------
CURRENT LIABILITIES
Accounts payable $ 1,334,817
Accrued expenses 2,293,336
Short-term borrowings 3,952
------------
TOTAL CURRENT LIABILITIES 3,632,105
------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
8% Cumulative convertible preferred
stock, $1.00 par value, 200,000 shares
authorized, none issued -
Common stock, $.001 par value,
40,000,000 shares authorized, 23,673,281
shares issued and outstanding 23,673
Additional paid in capital:
Additional paid in capital 29,850,938
Less deferred compensation (186,848)
------------
29,664,090
Accumulated deficit (20,256,357)
Cumulative foreign currency translation loss (18,464)
------------
TOTAL STOCKHOLDERS' EQUITY 9,412,942
------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 13,045,047
============
</TABLE>
See Notes to Financial Statements
3
<PAGE> 4
VIDEO JUKEBOX NETWORK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31, MARCH 31,
1995 1994
-----------------------------
<S> <C> <C>
REVENUES
Net viewer revenues $ 3,186,609 $ 2,829,749
Advertising and other revenues 1,629,967 1,176,139
----------- -----------
4,816,576 4,005,888
Interest income 107,632 11,236
----------- -----------
4,924,208 4,017,124
----------- -----------
COSTS AND EXPENSES
Affiliate fees, site costs and
telephone service 1,799,358 1,541,049
Distribution, general and
administrative 3,138,008 2,345,106
Satellite transponder and management fees
paid to related parties 512,167 750,000
Depreciation and amortization 352,595 442,323
Stock and warrant compensation 67,305 67,304
Interest 788 21,349
----------- -----------
5,870,221 5,167,131
----------- -----------
NET LOSS BEFORE MINORITY INTEREST
IN LOSS OF SUBSIDIARY (946,013) (1,150,007)
MINORITY INTEREST IN LOSS OF SUBSIDIARY 22,894 19,669
----------- -----------
NET LOSS $ (923,119) $(1,130,338)
=========== ===========
Net loss per common share ($0.04) ($0.07)
=========== ===========
Weighted average number of
common shares outstanding 23,672,111 17,216,929
=========== ===========
</TABLE>
See Notes to Financial Statements
4
<PAGE> 5
VIDEO JUKEBOX NETWORK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31, MARCH 31,
1995 1994
-----------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (923,119) $(1,141,767)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 352,595 442,323
Related party debt issued for services 0 600,000
Stock and warrant compensation and amortization 67,305 67,304
Change in assets and liabilities:
Decrease in accounts receivable 463,507 44,255
Decrease (Increase) in prepaid expenses, deferred
costs and other assets 216,203 (137,526)
(Decrease) Increase in accounts payable and
accrued expenses (59,014) 433,104
Increase in interest payable due to related parties 0 20,713
Minority interest in loss of subsidiary (16,323) (8,068)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 101,154 320,338
----------- -----------
CASH FLOW FROM INVESTING ACTIVITY:
Capital expenditures (776,420) (166,057)
----------- -----------
NET CASH USED IN INVESTING ACTIVITY (776,420) (166,057)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net 1,333 50,500
Payments of short-term borrowings (440) (40,131)
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 893 10,369
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 30,203 (1,082)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS (644,170) 163,568
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 8,018,010 1,702,533
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,373,840 $ 1,866,101
=========== ===========
</TABLE>
See Notes to Financial Statements
5
<PAGE> 6
VIDEO JUKEBOX NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
1. The financial information included herein is submitted pursuant to the
requirements of Form 10-QSB and does not include all disclosures
required by generally accepted accounting principles. It is suggested
that these unaudited financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's
Annual Report on Form 10-KSB for the fiscal year ended December 31,
1994. The accompanying interim financial statements reflect all
normal recurring adjustments which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods
presented. The results of operations for interim periods are not
necessarily indicative of the results to be obtained for the entire
year.
2. In February 1992, the Company initiated operations in the United
Kingdom through an international subsidiary, which is 91% owned by the
Company. The minority interest in the subsidiary operations has been
reflected in the financial statements herein.
3. Loss per share is computed based on the weighted average shares of
common stock outstanding during the quarter. Since the Company has
experienced net operating losses, common stock equivalents are not
considered in the computation of loss per share as their effect would
be to decrease net loss per share.
4. On October 18, 1994, the Company entered into an agreement in
principle to sell a 50 percent equity interest in Video Jukebox
Network International, Limited ("VJNIL") to Ticketmaster (or a company
it controls) for $2 million in cash. This 91 percent owned subsidiary
operates the Company's interactive music programming in the United
Kingdom. As part of such transaction, Ticketmaster would loan to
VJNIL approximately $1,500,000 which would equal the aggregate amount
of the advances that have been made from time to time by the Company
to VJNIL. Such loan from Ticketmaster and advances by the Company
would be secured by all of the assets of VJNIL and the principal
amount of VJNIL's debt to Ticketmaster, and the Company would accrue
interest at the rate of prime plus one percent. The agreement in
principle also provides for Ticketmaster to provide VJNIL with
strategic and marketing related services, particularly with respect to
sponsorship and promotional opportunities, advertising sales,
merchandising and other home shopping projects undertaken by VJNIL.
The Company also intends to purchase the share of VJNIL owned by
Vincent Monsey, the Managing Director of VJNIL, by issuing Mr. Monsey
225,000 newly-issued shares of the Company's common stock. The
agreement in principle is subject to negotiation of definitive
agreements, standard closing conditions and the approval of the Boards
of Directors of the Company, VJNIL, and Ticketmaster, as well as Mr.
Monsey. Accordingly, there can be no assurance that the transaction
will be completed.
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<PAGE> 7
5. Effective January 1, 1995, the Company terminated its
obligations under separate agreements to pay
management/consulting fees in the aggregate amount of $43,333
per month to three stockholders of the Company. Prior to such
termination, the Company was required to pay: (i) a fee of
$12,500 per month to StarNet, Inc. for consulting services
related to the development of to the Company's domestic
operations; (ii) a fee of $25,000 per month to Communications
Equity Associates for consulting services related to the
Company's international operations; and (iii) a fee of
approximately $5,833 per month to Island Trading Company, Inc.
for consulting services related to merchandizing and music
programming.
Item 6. Exhibits
Exhibit 27 - Financial Data Schedules (for SEC use only)
-7-
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
________________________________________________________________________________
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995 AS COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1994.
The Company incurred a net loss of $923,119 for the three months ended March
31, 1995 as compared to $1,130,338 for the comparable prior year period.
Net viewer revenue increased $357,000 from $2,830,000 to $3,187,000 or 12.6%
for the three months ended March 31, 1995 as compared with the same prior year
period. This net increase resulted from an 11.0% improvement in the Company's
domestic gross viewer performance (an increase of $374,000 from $3,406,000 for
the first quarter of 1994 to $3,780,000 in the first quarter of 1995).
Management attributes the increase in gross domestic revenue to programming
enhancements, the consolidation of unprofitable boxes and improved marketing
efforts of the Company's programming. These efforts have also contributed to
improved revenue performance per box. Average gross monthly revenues for the
first quarter 1995 were $9,870 per box as compared with $8,601 per month for
the comparable prior year period, a 14.8% increase. The improvement in gross
domestic revenue was offset by an increase of $30,000 from first quarter 1994
to first quarter 1995 in the fixed billing charges due to the increase in
revenues. Another reduction in net viewer revenues results from chargebacks
related to customers who deny having made music video requests. These
chargebacks increased by $92,000 for the first quarter 1995 as compared with
the same prior year period due to the increased revenue levels. The Company
continues the credit limiting and call blocking procedures initiated in first
quarter 1993, however, due to the lack of timely information from its telephone
services provider, has been hampered from reducing the chargeback percentage
further. The remainder of the net revenue increase resulted from the Company's
expansion of its operations in the United Kingdom. The average number of boxes
in the United Kingdom in 1994 totaled 15.7 as compared with an average of 19
boxes in service during first quarter 1995. As a result, international
revenues increased by $105,000 from $215,000 for the three months ended March
31, 1994 to $320,000 for the three months ended March 31, 1995.
Advertising sales increased 38.6% from $1,176,000 for the first quarter of 1994
to $1,630,000 for the same current year period. The increase resulted from
improved performance in all categories of advertising: national sales were up
16.2% for first quarter 1995 as compared with the same prior year period;
record industry sales were up 46.3% from the 1994 level and direct response
advertising increased by 9% from 1994 to 1995. Beginning in the first quarter
of 1994, the Company began the expansion of its national advertising sales
efforts with the addition of a sales person in the Los Angeles area who
concentrated on movie studio advertising and West Coast national accounts. In
May 1994, an East Coast salesperson was hired who sold national advertising in
New York City. During April 1995, the Company hired two additional national
sales directors to respond to the increased national advertising demands.
-8-
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
Affiliate fees, site costs and telephone service expenses were 56.5% and 54.5%
of net viewer revenue for the three months ended March 31, 1995 and 1994,
respectively. This reflects an increase of $258,000 from $1,541,000 to
$1,799,000 for the three months ended March 31, 1994 and 1995, respectively,
which resulted mainly from an increase in the low power television ("LPTV")
affiliate commissions and site costs of $161,000 from the first quarter of 1994
to the first quarter of 1995. The average number of affiliated LPTV boxes
increased from 30 to 40.7 for the first quarters of 1994 and 1995,
respectively. Since the majority of the Company's cable affiliation fees are
now based upon a percentage share of revenue, such fees decreased by $6,000
during the first quarter of 1995 as compared with the same prior year period
due to fewer cable systems on minimum performance guarantees. The Company also
experienced an increase totaling approximately $18,000 in United Kingdom
affiliation fees and telecommunication charges related to the increased level
of United Kingdom operations in the quarter ended March 31, 1995 as compared
with the same prior year period. Music costs related to the licensing fees for
the music product aired in the Company's programming, which is based upon a
percentage of revenue, increased by $27,000 for the first quarter of 1995 as
compared with the same prior year period. Due to the increased level of
operations domestically, transport and telecommunications expenses associated
with each local box, and the 900 number calls delivered, increased by $58,000,
from $491,000 for the first quarter of 1994 to $549,000 for the first quarter
of 1995.
Distribution, general and administrative expenses for the three months ended
March 31, 1995 totaled approximately $3,138,000 which was $793,000 more than
the comparable prior year period. Approximately $399,000 of this increase
resulted from higher salaries, wages, sales commissions, relocation and
recruitment expenditures associated with the increased staffing levels in
affiliate sales, marketing, programming and production, the employment of a
Chief Executive Officer and increased advertising sales commissions for the
Company's expanded in-house sales efforts. Office and administration
expenditures increased $109,000 from first quarter 1994 to the same 1995 period
due to higher rent and insurance related to the relocation of the Company's
corporate headquarters from a North Miami location to the South Beach area of
Miami Beach, expansion of the Company's Los Angeles sales office (which was
first established in March 1994) to incorporate additional affiliate sales and
international development personnel, the establishment in March 1995 of the New
York national sales office, and the related equipment rentals and office
supplies expenditures. Approximately $117,000 of the increase resulted from
expanded sales and promotional efforts, with higher levels of spending for
trade advertising, cable and music industry events, premiums, travel and
entertainment and extensive demographic market research. Due to establishment
of new and expanded offices, operations and telecommunications expenditures
increased by $56,000 for the first quarter ended March 31, 1995 as compared
with the same prior year period. For the three months ended March 31, 1995,
expenditures for the United Kingdom operations as compared to the same prior
-9-
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
year period increased by $220,000, with the increases resulting from higher
expenditures of $56,000 for salaries, $33,000 for expanded office space and
administrative costs, $86,000 for programming, production and shipping and
$45,000 for trade advertising, events and travel and entertainment. Legal
expenses decreased by $57,000 for the first quarter of 1995 as compared with
the same 1994 period due to minimal 1995 costs incurred in connection with the
Company's litigation with Healthcare Communications, Incorporated. Due to the
elimination of any advertising sales representation by an outside agency, the
commission related to such sales decreased by $38,000 for the first quarter of
1995 as compared with the first quarter of 1994. Costs related to production,
disc and tape preparation and related shipping expenditures decreased by
approximately $13,000 for the quarter ended March 31, 1995 as compared with the
same prior year period due to fewer laser discs pressed for the domestic
operations.
Satellite transponder and management fees paid to related parties were $512,167
for the three months ended March 31, 1995, as compared as compared with
$750,000 for the comparable period of 1994, representing a 32% decrease in such
fees. The decrease is attributable to a reduction in the Company's monthly
satellite transponder fee of a minimum of $90,000 per month, which occurred on
February 15, 1995 when the Company converted from analog to digital satellite
transmission. In addition, the 1995 period figures do not include consulting
fees equal to $50,000 per month that were paid during the first quarter of
1994. These fees were eliminated effective January 1, 1995 through the
Company's cancellation of two consulting agreements with stockholders of the
Company. The only related party consulting expense for first quarter 1995
relates to a reimbursement of approximately $47,000 to Island Trading Company,
Inc. ("Island") for the salary, taxes and benefits related to an Island
employee whose services were used by the Company during first quarter 1995.
See Part II, Item 5 of this Report.
Depreciation and amortization for the three months ended March 31, 1995
decreased by approximately $90,000, or 2.5% from the prior year period, as a
result of certain equipment becoming fully depreciated. The Company does
expect depreciation and amortization to increase in future quarters due to new
furniture and equipment purchases and leasehold improvements associated with
the new corporate headquarters office space and the expanded Los Angeles
satellite office space.
Stock and warrant compensation, a non-cash expenditure, was approximately
$67,000 for both three month periods ended March 31, 1995 and 1994 due to no
new employee stock options issued above market price during 1994.
Interest expense decreased from approximately $21,000 for the three months
ended March 31, 1994 to approximately $800 for the same period in 1995 due to
the fact that certain of the Company's long-term debt related to the payment of
the satellite transponder and uplink charges was converted into shares of the
Company's common stock in December 1994.
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<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(CONTINUED)
________________________________________________________________________________
LIQUIDITY AND CAPITAL RESOURCES
The Company's current ratio (current assets to current liabilities) was 2.63 to
1.00 at March 31, 1995 as compared to 1.13 to 1.00 at March 31, 1994. At March
31, 1995, the Company's current assets exceeded its current liabilities by
approximately $5,930,000.
The Company is using the proceeds from two financing transactions in 1994 to:
(i) expand the distribution of the Company's programming by constructing and
installing additional box units; (ii) advertise, market and promote the
Company's programming; (iii) research, develop, maintain and improve the
Company's software and equipment; (iv) fund working capital; and (v) purchase
technical equipment for programming production. In order to expand
distribution, the Company is examining upfront cash payments in the aggregate
amount of up to approximately $3,000,000 which would be made for guaranteed
long-term cable affiliation agreements. Although there can be no assurances,
management believes that expansion of the distribution of the Company's
programming will lead to increased advertising and viewer revenues and will
enable the Company to more efficiently utilize fixed cost expenditures. The
Company will additionally continue its efforts to relocate existing box units
to more profitable locations in order to attempt to improve the revenues
generated by the Company's existing box units. Additional financing may be
needed in order for the Company to achieve its goal of significantly expanding
the distribution of its programming to a level which will allow the Company to
operate profitably.
To provide capital for the United Kingdom international operations, the Company
has entered into an agreement in principle to sell 50% of the Company's
interest in its United Kingdom subsidiary to Ticketmaster for $2,000,000. See
Item 5, Other Information for further details.
Management has and will continue to undertake several operational measures in
an effort to continue to improve the Company's liquidity and cash flow
position. On February 14, 1995, the Company renegotiated its affiliation
agreement with Tele-Communications, Inc. ("TCI") to provide that TCI's cable
systems are compensated based on a specified percentage of net revenues
generated by the Company with a reduced guaranteed minimum monthly fee. Annual
savings of approximately $436,000 are expected to result from this
renegotiation. Additionally, another large multiple system operator has
verbally agreed to match TCI's terms which would result in annual savings of
approximately $449,000. However, there are no assurances that this cable
operator will formally agree to honor its verbal commitment. Management has
effected certain measures which have reduced overhead and operating expenses,
particularly fees paid to the telephone companies, but continues to analyze
additional changes which can further reduce such
-11-
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
expenses. A new method of handling the 900 telephone calls is scheduled to be
implemented by September 1995 which, the Company estimates, will save over
$200,000 per year in telecommunications costs.
In an effort to increase net viewer revenue, the Company continues to rewrite
key portions of its interactive computer software allowing for easier consumer
ordering, reduction in duplicate orders (which had often resulted in
non-payment) and constant on-air reminders of the appropriate order telephone
numbers. Advertising revenues have been increasing every quarter over the
previous year's quarter since the Company's sales efforts began. To continue
this trend, the Company has increased sales staff, scheduled special record
label promotions, value added promotions and has also increased rates for prime
time advertising space due to the increased demand.
The Company has used approximately $700,000 during the first quarter of 1995 to
purchase a new production edit suite, new graphics station, furniture and
equipment for the new corporate location, upgrade of the Company's computer
network and telephone system and miscellaneous leasehold improvements. Further
cash outlays of approximately $150,000 are expected to complete the leasehold
improvements for the new office space and the computer system requirements for
the additional staffing levels.
The Company's lease on its prior corporate headquarters location expires on
August 1, 1995. The Company has been unable to sublet its prior office space
or negotiate a settlement of rent, and therefore, the Company will incur
payments of up to approximately $110,000 for rent on its prior office space for
the period from April 1, 1995 through August 1, 1995. However, this cash
outlay is offset with an initial five months of free rent associated with the
new office location. In addition, the Company presently has allocated $1.5
million for the expansion of its international operations outside of the United
Kingdom. The Company converted its analog signal to a digital signal in
February 1995, which has reduced the monthly satellite transponder fee to a
maximum of $110,000 per month, an annual savings of at least $900,000 over the
fees charged in 1994.
-12-
<PAGE> 13
PART II: OTHER INFORMATION
PART II: OTHER INFORMATION (CONT'D)
ITEM 5. OTHER INFORMATION
On October 18, 1994, the Company entered into an agreement in principle to sell
a 50 percent equity interest in Video Jukebox Network International, Limited
("VJNIL") to Ticketmaster (or a company it controls) for $2 million in cash.
This 91 percent owned subsidiary operates the Company's interactive music
programming in the United Kingdom. As part of such transaction, Ticketmaster
would loan to VJNIL approximately $1,500,000 which would equal the aggregate
amount of the advances that have been made from time to time by the Company to
VJNIL. Such loan from Ticketmaster and advances by the Company would be
secured by all of the assets of VJNIL and the principal amount of VJNIL's debt
to Ticketmaster, and the Company would accrue interest at the rate of prime
plus one percent. The agreement in principle also provides for Ticketmaster to
provide VJNIL with strategic and marketing related services, particularly with
respect to sponsorship and promotional opportunities, advertising sales,
merchandising and other home shopping projects undertaken by VJNIL. The
Company also intends to purchase the share of VJNIL owned by Vincent Monsey,
the Managing Director of VJNIL, by issuing Mr. Monsey 225,000 newly-issued
shares of the Company's common stock. The agreement in principle is subject to
negotiation of definitive agreements, standard closing conditions and the
approval of the Boards of Directors of the Company, VJNIL, and Ticketmaster, as
well as Mr. Monsey. Accordingly, there can be no assurance that the
transaction will be completed.
Concurrent with the appointment of Alan McGlade as the Company's Chief
Executive Officer on January 1, 1995, the Company terminated its obligations
under separate agreements to pay management/consulting fees in the aggregate
amount of $43,333 per month to three stockholders of the Company. Prior to
such termination (effective January 1, 1995), the Company was required to
pay: (i) a fee of $12,500 per month ($25,000 per month prior to December 1994)
to StarNet, Inc. for consulting services related to the development of the
Company's domestic operations; (ii) a fee of $25,000 per month to
Communications Equity Associates for consulting services related to the
Company's international operations; and (iii) a fee of approximately $5,833 per
month to Island Trading Company, Inc. for consulting services related to
merchandizing and music programming.
ITEM 6. EXHIBITS
Exhibit 27 - Financial Data Schedule (for SEC use only)
-13-
<PAGE> 14
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 thereunto duly authorized.
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(REGISTRANT)
Date: May 11, 1995 By: /s/ Alan McGlade
---------------------------------
Alan McGlade
President and Chief Executive Officer
Date: May 11, 1995 By: /s/ Luann M. Simpson
---------------------------------
Luann M. Simpson
Chief Financial and
Administrative Officer
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT OF VIDEO JUKEBOX NETWORK, INC. FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH QUARTERLY
REPORT OF VIDEO JUKEBOX NETWORK, INC.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 7,373,840
<SECURITIES> 0
<RECEIVABLES> 3,186,475
<ALLOWANCES> 1,357,250
<INVENTORY> 20,000
<CURRENT-ASSETS> 9,562,117
<PP&E> 11,504,580
<DEPRECIATION> 8,484,498
<TOTAL-ASSETS> 13,045,047
<CURRENT-LIABILITIES> 3,632,105
<BONDS> 0
<COMMON> 23,673
0
0
<OTHER-SE> 9,389,269
<TOTAL-LIABILITY-AND-EQUITY> 13,045,047
<SALES> 0
<TOTAL-REVENUES> 4,924,208
<CGS> 0
<TOTAL-COSTS> 1,799,358
<OTHER-EXPENSES> 4,047,181
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 788
<INCOME-PRETAX> (923,119)
<INCOME-TAX> 0
<INCOME-CONTINUING> (923,119)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (923,119)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
