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
Date of Report (Date of earliest event reported) 05/29/98 (05/15/98)
LASER-PACIFIC MEDIA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-3824617
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
809 N. Cahuenga Blvd., Hollywood, California 90038
(Address of principal executive offices) (Zip Code)
Registrant' telephone number, including area code: (213) 462-6266
NOT APPLICABLE
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(Former Name or former address, if changed since last report).
<PAGE>
ITEM II Disposal of Assets
On May 15, 1998, Laser Pacific Media Corp. completed the sale of the
Company's majority interest in Pacific Video Canada, Inc. (PVC) to Command Post
and Transfer of Toronto, Canada. The total sales price, determined through
arms-length negotiations, was $3.83 million, the proceeds of which, net of
income taxes, will be used to reduce outstanding debt and to provide working
capital.
ITEM V11 Financial Statements and Pro-Forma Financial Information and Exhibits
The following pro-forma condensed Balance Sheet as of March 31, 1998, and
the pro-forma condensed Statements of Operations for the three months ended
March 31, 1998, and the year ended December 31, 1997, give effect to the sale of
the Company's majority interest (77%) in Pacific Video Canada, Inc. (PVC). The
adjustments related to the pro-forma consolidated Balance Sheet assume that the
transaction was consummated at March 31, 1998, while the adjustments to the
condensed Statements of Operations assume the transaction was consummated at the
beginning of the period. The sale was completed on May 15, 1998.
The pro-forma information is based on the historical financial statements
of Laser Pacific Media Corp. (LPAC, the Company), and reflect the elimination of
the Company's investment in PVC, and the income produced by the investment.
These pro-forma statements are not necessarily indicative of the results
that actually would have occurred if the sale had been in effect as of and for
the periods presented or what may be achieved in the future.
<PAGE>
LASER-PACIFIC MEDIA CORPORATION
AND SUBSIDIARIES
Condensed Balance Sheets (Unaudited)
As of March 31, 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Elimination
Of PVC Recognition LPMC
LPMC Net of of sale of Pro-Forma
March 31, 1998 Consolidating PVC March 31, 1998
Entries
=============== ================ ============== =================
Assets
Cash $193,728 (114,190) 1,514,934 (1) 1,594,472
Non-cash current assets 4,462,965 (335,620) 4,127,345
Net property and equipment 16,254,649 (4,689,784) 11,564,865
Other assets 524,088 (205,456) 318,632
Investments held for sale 2,846,374 (2,846,374) (2) -
=============== =============== ============= =================
21,435,430 (2,498,676) (1,331,440) 17,605,314
Liabilities and Stockholders' Equity
Current liabilities $7,217,366 (953,521) (1,933,000) (3)
100,000 (4) 4,430,845
Notes payable to bank and long-term 7,353,635 (1,008,361) (362,000) (3) 5,983,274
debt, less current installments
Minority Interest 536,794 (536,794) -
Stockholders' equity:
Common stock, $.0001 par value. 713 713
Authorized 25,000,000 shares; issued
and outstanding 7,128,172 shares at
December 31, 1997 and March 31, 1998,
Additional paid-in capital 19,772,440 19,772,440
Accumulated deficit (13,445,518) 863,560 (5) (12,581,958)
Net stockholders' equity 6,327,635 863,560 7,191,195
=============== ============= ============= =================
21,435,430 (2,498,676) (1,331,440) 17,605,314
</TABLE>
(1) Record funds to be used for working capital.
(2) Record the sale of investment in Pacific Video Canada, Ltd. (PVC).
(3) Reflect the use of the proceeds from the sale of PVC to reduce debt.
(4) Record estimated income tax liability on the gain on the sale of PVC.
(5) Estimated retained earnings impact of the sale of PVC, net of income tax
effect.
<PAGE>
LASER-PACIFIC MEDIA CORPORATION
AND SUBSIDIARIES
Condensed Statements of Operations (Unaudited)
For the three months ended March 31, 1998
<TABLE>
<S> <C> <C> <C>
Pro-Forma Pro-Forma
LPMC Adjustments LPMC
============== ============= ==============
Revenues $ 8,051,851 (1,249,905) (1) 6,801,946
Operating costs 5,927,686 (906,982) (1) 5,020,704
============== ============== ==============
Gross profit 2,124,165 (342,923) 1,781,242
Selling, general and administrative
and other expenses 1,201,341 (273,111) (1)
35,538 (2) 963,768
============== ============== ==============
Income (loss) from operations 922,824 (105,350) 817,474
Interest expense 377,322 (34,537) (1)
(87,000) (3) 255,785
Other Income 46,457 46,457
Minority Interest in Net Income of Consolidated Subsidiary (4,436) 4,436 (2) -
============== ============== ==============
Income from continuing operations before income taxes 587,523 20,623 608,146
Income taxes 32,227 (16,227) (1) 16,000
============== ============== ==============
Income from continuing operations 555,296 36,850 592,146
Gain on disposal of assets (net of income tax expense of 850,000 (4) 850,000
$100,000)
============== ============== ==============
Net Income 555,296 886,850 1,442,146
============== ============== ==============
Earning Per Share
Basic Net Income
Income from continuing operations 0.08 0.08
Gain on disposal of assets - 0.12
============== ==============
Basic Net Income 0.08 0.20
Diluted Net Income
Income from continuing operations 0.07 0.08
Gain on disposal of assets - 0.11
============== ==============
Diluted Net Income 0.07 0.19
============== ==============
Weighted average shares outstanding (basic) 7,128,172 7,128,172
============== ==============
Weighted average shares outstanding (diluted) 7,411,229 7,411,229
</TABLE>
1. Elimination of Pacific Video Canada, Ltd. (PVC) revenues and expenses.
2. Reversal of Eliminating Consolidating entries.
3. Reduction of estimated interest expense on debt retired, net of estimated
interest that would have been earned on working capital funds.
4. Recognize gain on sale of PVC. The gain recognized as of March 31, 1998
differs from the gain recognized as of December 31, 1997 because the
Company's investment in PVC changes as a result of income recognized from
PVC.
<PAGE>
LASER-PACIFIC MEDIA CORPORATION
AND SUBSIDIARIES
Condensed Statements of Operations (Unaudited)
For the twelve months ended December 31, 1997
<TABLE>
<S> <C> <C> <C>
Pro-Forma Pro-Forma
LPMC Adjustments LPMC
============== ============= ==============
Revenues $ 28,290,924 (5,265,654) (1) 23,025,270
Operating costs 22,550,389 (3,479,954) (1) 19,070,435
============== ============= ==============
Gross profit 5,740,535 (1,785,700) 3,954,835
Selling, general and administrative
and other expenses 4,279,026 (1,213,183) (1)
141,842 (2) 3,207,685
============== ============== ==============
Income (loss) from operations 1,461,509 (714,359) 747,150
Interest expense 1,563,316 (116,843) (1)
(396,000) (3) 1,050,473
Other Income 40,687 (6,532) (1) 34,155
Minority Interest in Net Income of Consolidated Subsidiary (54,070) 54,070 (2)
============== ============== ==============
Income from continuing operations before income taxes (115,190) (153,978) (269,168)
Income taxes 232,000 (227,022) (1) 4,978
============== ============== ==============
Income from continuing operations (347,190) 73,044 (274,146)
Gain on disposal of assets (net of income tax expense of 991,000 (4) 991,000
$100,000)
============== ============== ==============
Net Income (347,190) 1,064,044 716,854
Earning Per Share
Basic Net Income
Income from continuing operations (0.05) (0.04)
Gain on disposal of assets - 0.14
============== ==============
Basic Net Income (0.05) 0.10
Diluted Net Income
Income from continuing operations (0.05) (0.04)
Gain on disposal of assets - 0.14
============== ==============
Diluted Net Income (0.05) 0.10
============== ==============
Weighted average shares outstanding (basic) 7,128,172 7,128,172
============== ==============
Weighted average shares outstanding (diluted) 7,128,172 7,128,172
</TABLE>
1. Elimination of Pacific Video Canada, Ltd. (PVC) revenues and expenses.
2. Reversal of Eliminating Consolidating entries.
3. Reduction of projected interest expense on debt retired, net of projected
interest earned on working capital funds.
4. Recognize gain on sale of PVC. The gain recognized as of December 31,
1997 differs from the gain recognized as of March 31, 1998 because the
Company's investment in PVC changes as a result of income recognized from
PVC.
<PAGE>
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 hereunto duly authorized.
Laser-Pacific Media Corporation
Date: May 29, 1998 By /s/ Robert McClain
Chief Financial Officer
and Secretary
(Duly Authorized Officer of the
Registrant)
