UNITED STATES
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
Report for Event: February 7, 1996
INDENET, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-18034 68-0158367
(State of other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
1640 N. Gower Street, Los Angeles, CA 90028
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (213) 466-6388
Not applicable
(Former name and address)
Item 1. Changes in Control of Registrant.
Not applicable.
Item 2. Acquisition or Disposition of Assets.
On February 7, 1996, IndeNet, Inc. ("the Company")
consummated the acquisition of Starcom Television Services
("Starcom"). Attached as Exhibit 1A to this document is the
Company's press release related to the completion of the
acquisition. For further details of the transaction, refer to
the Company's 10-QSB for the nine months ended December 31, 1995,
filed on February 12, 1996.
Item 3. Bankruptcy or Receivership
Not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
Not applicable
Item 5. Other Events.
Not applicable
Item 6. Resignations of Registrant's Directors.
Not applicable
Item 7. Financial Statements and Exhibits.
Historical Financial Statements for Starcom will be filed
not later than 60 days after the filing date.
Exhibit No. Description
1A Press Release pertaining to the acquisition
of Starcom.
Item 8. Change in Fiscal Year.
Not applicable.
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 theundersigned hereunto duly authorized.
INDENET, INC.
Date: February 22, 1996 /s/ Lewis K. Eisaguirre
Lewis K. Eisaguirre
Its: Chief Financial Officer
and Secretary
EXHIBIT 1A
FOR IMMEDIATE RELEASE
Contact: IndeNet Desmond Towey & Associates
John Zarchen J. Desmond Towey
213-466-6388 George N. Robinson
212-888-7600
INDENET CLOSES ACQUISITION OF STARCOM TELEVISION SERVICES
AND ANNOUNCES PRO FORMA OPERATING RESULTS
Los Angeles, CA -- February 13, 1996 -- IndeNet, Inc.
(NASDAQ NM: INDE) completed the acquisition of Burbank, CA-based
Starcom Television Services, Inc. ("Starcom") in an all stock
transaction. Starcom's core business is the delivery of
syndicated television programming and television commercials to
television stations, cable systems and other television
providers. Starcom competes with IndeNet's Chicago-based,
wholly-owned subsidiary, Mediatech, Inc.
Under the terms of the agreement, approximately one million
(1,000,000) shares of IndeNet's common stock are to be exchanged
for 100% of Starcom's outstanding shares, and for the repayment
of certain indebtedness owed to the Starcom stockholders. The
actual number of shares to be issued for the Starcom shares is
based on Starcom's operating results during the period from
January 1, 1996 through March 31, 1996, and may therefore be more
or less than 1,000,000 shares. IndeNet issued 500,000 shares of
its Common Stock at the initial closing. The remaining shares
are held back pending audit and certain true-up provisions. All
of the IndeNet common shares issued in the Starcom transaction
are locked up for a period of twelve (12) months and thereafter
any sales are limited to pro-rata sales over a period of an
additional twenty-four (24) months.
Andre Blay, previously a major shareholder of Starcom, will
serve on IndeNet's Board of Directors for a period of 3 years.
IndeNet intends to merge Starcom's operations into the operations
of Mediatech. Pursuant to the acquisition, IndeNet has arranged
and guaranteed a $2 million asset based credit facility for
Starcom.
The Company announced the pro forma combined results of
operations of IndeNet, Inc. with its acquisitions of Mediatech,
Inc., Starcom Television Services, Inc. and Channelmatic, Inc.
For the 12 months ended December 31, 1994, combined revenues were
$34,626,544 and after pro forma adjustments were $31,448,544.
The pro forma net loss was ($2,491,342) and EBITDA (Earnings
Before Interest, Taxes, Depreciation and Amortization) was
$2,052,801. For the nine months ended December 31, 1995, pro
forma revenues with adjustments were $21,030,939. The net loss
was ($2,262,191) and EBITDA was $972,573.
The Company's stated objective is to continue to build
revenues of the content delivery and insertion business by
acquiring other similar companies. The Company's goal is to have
combined pro forma revenues of $75 to $100 million per year
within 12 to 18 months as a result of acquisitions. The Company
further plans to utilize The IndeNet(tm) Digital Broadcast Network
to reduce delivery costs, enhance profitability and to obtain
EBITDA of 25% to 30% of revenues within 18 to 24 months.
Achieving these future results assumes that the Company is
successful at acquiring the necessary companies (with those
combined revenue numbers) and that The IndeNet(tm) will be accepted
by the market and that it will significantly reduce costs, while
maintaining prices.
IndeNet, Inc., based in Los Angeles, CA, distributes TV
commercials and syndicated TV programs in both analog and digital
formats. Through subsidiaries, IndeNet serves advertisers and
programmers as well as television stations, cable systems and
other providers with service and equipment. The IndeNet(tm) Digital
Broadcast Network, a computer-based, satellite network for the
distribution of TV commercials and TV programs without analog
video tape, will dramatically improve efficiencies and enhance
service for content delivery companies. Digital Video Receiver
Players (DVRPs), built by majority-owned Channelmatic, are
currently being installed at television stations around the
country. The DVRPs allow for the reception of The IndeNet(tm)
digital signals, for storage and for playback of TV commercials
and, eventually, of programming. IndeNet's aggressive strategy
of acquiring additional content delivery and broadcast equipment
companies, and integrating those companies, should enhance
operating margins, grow market share and add shareholder value to
the Company.
- - Table to Follow - -
SUMMARY FINANCIAL INFORMATION
Consolidated Statement of Operations
Pro Forma Pro Forma
Nine Months Ended Twelve Months Ended
December 31, 1995 December 31, 1994
Revenue $ 21,030,939 $ 31,448,544
Cost of Sales 10,392,300 15,240,403
Gross Profit 10,638,639 16,208,141
Operating Expenses:
S,G and A 8,621,849 12,264,258
Depreciation and
Amortization 2,536,820 3,549,871
R&D 265,162 670,000
Corporate Overhead 779,055 1,221,082
Operating Income (loss) (1,564,247) (1,497,070)
Other income (expense) (756,038) (556,050)
Allocation to minority 58,094 (438,222)
interest
Net loss $ (2,262,191) $ (2,491,342)
EBITDA $ 972,573 2,052,801
Net loss per share $ (0.27) $ (0.39)
EBITDA per share $ 0.11 $ 0.32
Avg. number of 8,538,417 6,366,668
shares
Pro Forma Balance
Sheet
December 31, 1995
Current Assets:
Cash and equivalents $ 4,041,069
Restricted cash
Receivables 4,604,281
Inventories and 2,271,868
Prepaid expenses
Total current assets 10,917,218
Property and 13,379,915
equipment, net
Long-term assets 800,113
Goodwill 14,553,320
TOTAL ASSETS $ 39,650,566
Current liabiilties:
Accounts payable $ 6,228,472
and accrued expenses
Notes payable 2,948,730
Total current liabilities 9,177,202
Notes payable to 7,923,688
shareholders of acquired
Co.
Note payable 2,658,468
Total liabilities 19,759,358
Minority interest 1,668,463
Stockholders' equity 18,222,745
TOTAL LIABILITIES AND $ 39,650,566
STOCKHOLDERS EQUITY
Refer to the Company's forms 10-KSBA-2 and 10Q for the periods
ended December 31, 1994 and 1995
