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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
Harmony Holdings, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
41322310
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(CUSIP Number)
Avron L. Gordon, Esq.
Brett D. Anderson, Esq.
Briggs and Morgan, P.A.
2400 IDS Center
Minneapolis, MN 55402
(612) 334-8400
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 19, 1997
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
___________________________
*The remainder of this cover page shall be filed out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, SEE the
NOTES).
(Continued on following pages)
(Page 1 of 11 Pages)
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CUSIP No. 41322310 13D Page 2 of 11 Pages
- ---------------------------- ------------------------
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Children's Broadcasting Corporation
41-1663712
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
BK
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(D) OR 2(E)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Minnesota
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7 SOLE VOTING POWER
2,938,731
NUMBER OF ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
EACH 0
OWNED BY ------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 2,938,731
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,938,731
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.7%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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Item 1: Security and Issuer.
The title of the class of equity securities to which this statement
relates is Common Stock. The issuer of such securities is Harmony
Holdings, Inc. ("Harmony"), a Delaware corporation, with its principal
executive offices at 1990 Westwood Boulevard, Suite 310, Los Angeles,
California 90025.
Item 2: Identity and Background.
This statement is filed by Children's Broadcasting Corporation (the
"Company"), a Minnesota corporation, which is a full-time national
broadcaster of children's radio in the United States with its
principal business and principal executive offices at 724 First Street
North, Minneapolis, Minnesota 55401.
The attached Schedule I is a list of the executive officers and
directors of the Company which contains the following information
regarding each person listed on such schedule:
(a) name;
(b) residence or business address;
(c) present principal occupation or employment and, if other
than Children's Broadcasting Corporation, the name,
principal business and address of any corporation or other
organization in which such employment is conducted; and
(d) citizenship.
During the past five years, neither the Company nor, to the best of
the Company's knowledge, any person named in Schedule I has been
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result
of which it was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation
with respect to such laws.
Item 3: Source and Amount of Funds or Other Consideration.
On September 19, 1997, the Company and Glenn B. Laken ("Laken")
negotiated and reached an agreement in principle whereby Laken offered
to sell, and the Company agreed to buy, 420,000 shares of Common Stock
of Harmony from Laken at $3.15 per share (the "Laken Shares"), 399,500
shares of Common Stock of Harmony from others who are acting together
with Laken at $2.70 per share (the "Laken Control Group Shares"), and
options to
(Page 3 of 11 Pages)
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purchase 200,000 shares of Common Stock of Harmony from Laken (the
"Options") at an exercise price of $1.50 per share for $330,000
(collectively, the "Transaction").
The closing on the Transaction is expected to occur within five
business days of the date of this Schedule 13D. At such time, the
definitive stock purchase agreement will be filed as an exhibit.
Funds for the Transaction will originate from an amended loan and
security agreement with Foothill Capital Corporation.
Item 4: Purpose of Transaction.
The Common Stock to be acquired by the Company pursuant to the
Transaction will be acquired for investment purposes and to increase
its voting power. The Reporting Person has also reached an agreement
in principle for the future acquisition of up to 425,000 additional
shares of Common Stock of Harmony at a price of $2.50 per share. The
Reporting Person reserves the right to purchase additional shares or
to sell shares if it deems such action to be in its best interest.
Other than the information disclosed above, the Company does not
presently have plans or proposals which relate to, or would result in,
any of the matters listed in Paragraphs (a) through (j) of Item 4 of
Schedule 13D.
Item 5: Interest in Securities of the Issuer.
(a) Following completion of the Transaction, excluding any shares
which may be acquired pursuant to the agreement in principle
described in Item 4, the Reporting Person will beneficially own
2,939,731 shares of Common Stock of Harmony, including 750,000
shares of Common Stock subject to currently exercisable options,
which constitute approximately 40.7% of the outstanding Common
Stock of Harmony.
(b) Following completion of the Transaction, excluding any shares
which may be acquired pursuant to the agreement in principle
described in Item 4, the Reporting Person will have the sole
power to vote or to direct the vote and the sole power to dispose
or to direct the disposition of 2,938,731 shares of Common Stock
of Harmony.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(Page 4 of 11 Pages)
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Item 6: Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
It is expected that the definitive stock purchase agreement between
the parties to the Transaction will provide that neither Laken nor the
Laken Control Group will acquire any securities of Harmony or the
Reporting Person for a period of five years.
Item 7: Material to be Filed as Exhibits.
99.1 Letter Agreement between Children's Broadcasting Corporation and
Glenn B. Laken, dated September 19, 1997.
(Page 5 of 11 Pages)
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SIGNATURE
After reasonable inquiring and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 22, 1997
CHILDREN'S BROADCASTING CORPORATION
By: /s/ Christopher T. Dahl
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Christopher T. Dahl
Chairman of the Board, President and
Chief Executive Officer
(Page 6 of 11 Pages)
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Schedule I
Executive Officers and Directors of Children's Broadcasting Corporation
The name, business address, principal occupation or employment and
citizenship of each executive officer and director is set forth below.
Residence Address or
Principal Business Occupation or
Address and, if Employment or Citizenship
different, Address Principal or Place of
Name of Principal Office Business Organization
- ------------------- ------------------- --------------- ------------
EXECUTIVE OFFICERS:
Christopher T. Dahl 724 First Street North President, Chief U.S.A.
Minneapolis, MN 55401 Executive Officer
and Chairman of
the Board
James G. Gilbertson 724 First Street North Chief Operating U.S.A.
Minneapolis, MN 55401 Officer, Chief
Financial Officer
and Treasurer
Lance W. Riley 724 First Street North General Counsel U.S.A.
Minneapolis, MN 55401 and Secretary
Gary W. Landis 724 First Street North Executive Vice U.S.A.
Minneapolis, MN 55401 President of
Programming
Melvin E. Paradis 724 First Street North Executive Vice U.S.A.
Minneapolis, MN 55401 President of
Operations
Barbara A. McMahon 724 First Street North Executive Vice U.S.A.
Minneapolis, MN 55401 President of
Affiliate
Relations
Rick E. Smith 724 First Street North Executive Vice U.S.A.
Minneapolis, MN 55401 President of
National Sales
Denny J. Manrique 724 First Street North Executive Vice U.S.A.
Minneapolis, MN 55401 President of
Sales Development
(Page 7 of 11 Pages)
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DIRECTORS:
Christopher T. Dahl 724 First Street North President, Chief U.S.A.
Minneapolis, MN 55401 Executive Officer
and Chairman of
the Board
Richard W. Perkins 730 East Lake Street President and U.S.A.
Wayzata, MN 55391 CEO of Perkins
Capital
Management, Inc.
(a registered
investment
adviser)
Rodney P. Burwell 7901 Xerxes Ave. S. Chairman of U.S.A.
Minneapolis, MN 55431 Xerxes
Corporation (a
manufacturer of
fiberglass
tanks)
Mark A. Cohn 7101 Winnetka Ave. N. Co-founder and U.S.A.
Minneapolis, MN 55428 CEO of Damark
International, Inc.
(a direct marketer
of brand name
and general
merchandise
products)
Russell Cowles II (1) 2754 W. Lake of the Trustee of the U.S.A.
Isles Pkwy. Cowles Family
Minneapolis, MN 55416 Voting Trust
(holder of a
majority share of
the voting stock of
Cowles Media Corporation,
a newspaper, magazine and
book publisher and
information service
provider)
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1 Subject to the approval of the Federal Communications Commission.
(Page 8 of 11 Pages)
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Exhibit Index
Exhibit
Number Description
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99.1 Letter Agreement between Children's Broadcasting
Corporation and Glenn B. Laken, dated September 19, 1997.
(Page 9 of 11 Pages)
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EXHIBIT 99.1
(612) 334-8455
September 19, 1997 [email protected]
Steven B. Nagler, Esq. VIA FAX -- (847) 945-0329
c/o Siegel & Capitel, Ltd.
2275 Half Day Road, Suite 320
Bannockburn, IL 60015
Re: GLENN B. LAKEN/LAKEN COMMITTEE/PURCHASE OF SHARES
Dear Mr. Nagler:
This letter will confirm that Children's Broadcasting Corporation accept[s]
your client's offer to sell their interests in Harmony Holdings, Inc. ("HHI") on
the following terms:
1. Our client will purchase Mr. Laken's options for the purchase of
200,000 shares exercisable at $1.50 per share for the total sum of
$330,000.
2. Our client will purchase from Mr. Laken 420,000 shares of HHI
common stock for $3.15 per share, or an aggregate of $1,323,000.
3. Our client will purchase 399,500 shares from the Laken Control
Group at $2.70 per share or an aggregate of $1,078,650.
This involves a total purchase price of $2,731,650. Our client advises me
that it is prepared to negotiate and enter into the definitive agreement as soon
as practicable and to close next week. I will have a draft to you soon. As
stated on the telephone this afternoon, the acceptance is subject to approval by
our client's board because the number of shares is greater than its previous
authorization. This approval is expected on Monday. The acceptance is also
subject to approval by Foothill Capital Corporation, which approved our client's
financing based upon the lesser number of shares previously offered. Mr. Dahl
will seek this financing by Monday. I have informed him of your client's
requirement that the Foothill approval be obtained on Monday.
This letter will also confirm that, with respect to the 425,000 non-Control
Group shares offered to Children's, a buyer has been found for 200,000 of such
shares and Children's Broadcasting Corporation is willing to enter into a put
agreement to purchase
(Page 10 of 11 Pages)
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such shares at $2.50 per share upon the demand of the holders thereof at any
time on or after January 31, 1998, or such earlier date as our client closes on
the sale of its radio stations to Global Broadcasting Company. If our client
does not close on the sale [to] Global Broadcasting Company by January 31, 1998,
our client can extend the date for purchase of such shares pursuant to the put
to March 31, 1998. Our client would also have the right to purchase the
non-Control Group shares at $2.50 per share at any time prior to
March 31, 1998. The foregoing put and call arrangement would terminate if at
any time the bid price for HHI common stock is $2.50 per share or more for
seven consecutive trading days.
If you have any questions concerning the foregoing summary, please call me.
Very truly yours,
/s/ Avron L. Gordon
Avron L. Gordon
ALG/kmt
cc: Christopher T. Dahl
Lance W. Riley, Esq.
Greg Joseph, Esq.
(Page 11 of 11 Pages)
