<PAGE>
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): July 7, 1999
Commission File Number 000-27852
PLATINUM ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3802328
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2001 Butterfield Road
Downers Grove, Illinois 60515
(Address of principal executive offices, including zip code)
(630) 769-0033
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
Platinum Entertainment, Inc. (the "Company"), is filing this Current Report
on Form 8-K in order to provide the pro forma effect of the musicmaker.com,
Inc. ("musicmaker.com") initial public offering. The Company owns 798,856
shares of common stock of musicmaker.com. Musicmaker.com's initial public
offering commenced July 7, 1999 for an initial offering price of $14.00 per
share under the symbol "HITS." The Company obtained its stake in
musicmaker.com, the Internet's largest music download and custom CD vendor,
on September 30, 1998 in exchange for $750,000 of the Company's common stock,
par value $.001 per share ("Common Stock"). In addition, the Company granted
musicmaker.com the exclusive right to its music catalog for Internet
downloads and "burn and mail" compilations for two years, and thereafter a
non-exclusive right to its music catalog for Internet downloads and "burn and
mail" compilations for five years. The Company retained the exclusive rights
to its music catalog for promotional Internet downloads.
Effective July 7, 1999, the accounting treatment for the Company's investment
in musicmaker.com will require the Company to record the investment at its
fair market value which has a significant affect on the Company's assets and
net worth. The following financial information has been provided on pages P-1
and P-2 of this Form 8-K:
- Unaudited Pro Forma Consolidated Balance Sheet at May 31, 1999 and
- Unaudited Consolidated Statement of Operations for the Five Months
Ended May 31, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Platinum
Entertainment, Inc. has duly caused this Current Report to be signed on its
behalf by the undersigned, hereunto duly authorized, on this 19th day of
July, 1999.
PLATINUM ENTERTAINMENT, INC.
By: /s/ STEVEN DEVICK
--------------------------------
Steven Devick
Chairman of the Board, President
and Chief Executive Officer
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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
Set forth below is the Unaudited Pro Forma Consolidated Balance Sheet Data at
May 31, 1999. The Unaudited Pro Forma Consolidated Balance Sheet at May 31,
1999 gives pro forma effect to the market value adjustment for the Company's
investment in common stock of musicmaker.com. The Unaudited Consolidated
Statement of Operations Data for the Five Months Ended May 31, 1999 is also
set forth below.
The unaudited pro forma consolidated financial data presented herein is based
on the assumptions and adjustments described in the accompanying note.
The financial data included herein is unaudited. In the opinion of
management, the financial data reflects all adjustments (of a normal and
recurring nature) which are necessary to present fairly the financial
position and results of operations for the interim periods presented. This
financial data should be read in conjunction with the audited consolidated
financial statements and notes thereto for the year ended December 31, 1998
of Platinum Entertainment, Inc. included in the Annual Report on Form 10-K
filed with the Securities and Exchange Commission on April 15, 1999. The
interim results presented are not necessarily indicative of the results that
may be expected for the quarter and six months ended June 30, 1999 or the
year ending December 31, 1999.
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UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET DATA
MAY 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
MAY 31 PRO FORMA
1999 ADJUSTMENT* AS ADJUSTED
<S> <C> <C> <C>
ASSETS
Current assets:
Cash $ 59 $ - $ 59
Accounts receivable, net 7,333 - 7,333
Artist advances, net 3,241 - 3,241
Inventories, net 6,881 - 6,881
Other 2,604 - 2,604
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Total current assets 20,118 - 20,118
Investment securities 750 10,434 11,184
Property and equipment, net 2,562 - 2,562
Recorded music costs, net 1,203 - 1,203
Music catalog, net 20,927 - 20,927
Music publishing rights, net 2,963 - 2,963
Goodwill, net 5,509 - 5,509
Deferred financing costs, net 230 - 230
Equity investment in joint venture 1,880 - 1,880
Other 1,270 - 1,270
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Total assets $ 57,412 $ 10,434 $ 67,846
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit $ 33,942 $ - $ 33,942
Accounts payable 4,349 - 4,349
Accrued liabilities and other 2,188 - 2,188
Royalties payable 6,978 - 6,978
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Total current liabilities 47,457 - 47,457
Stockholders' equity:
Preferred stock:
Preferred Stock ($.001 par value);
10,000,000 shares authorized:
Series B, Convertible Preferred Stock,
20,000 shares issued and outstanding - - -
Series C, Convertible Preferred Stock,
2,500 shares issued and outstanding - - -
Series D, Convertible Preferred Stock,
3,938 shares issued and outstanding - - -
Common stock:
Common Stock ($.001 par value); 40,000,000
shares authorized, 7,509,156 shares
issued and 7,305,075 shares outstanding 7 - 7
Additional paid-in capital 79,833 - 79,833
Accumulated deficit (69,885) - (69,885)
Unrealized gain - 10,434 10,434
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Stockholders' equity 9,955 10,434 20,389
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Total liabilities and stockholders' equity $ 57,412 $ 10,434 $ 67,846
===========================================
</TABLE>
* The pro forma adjustment assumes musicmaker.com, Inc.'s initial public
offering of its common stock ("IPO") occurred on May 31, 1999 and
reflects the value of the Company's investment in musicmaker.com as of
July 7, 1999 at musicmaker.com's initial offering price of $14 per
share. On September 30, 1998, the Company purchased 798,856 shares of
common stock in musicmaker.com at a cost to the Company of $750. The
market value of the Company's investment in musicmaker.com at the
initial offering price was $11,184. The common stock is not deemed
marketable until the IPO date at which time, and prospectively, the
Company's investment is adjusted to market. The closing trading price
of musicmaker.com common stock on July 14, 1999 was $18.313 per share.
P-1
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UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS DATA
FIVE MONTHS ENDED MAY 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
FIVE MONTHS
ENDED MAY 31
1999
<S> <C>
Gross product sales $ 18,760
Less: Returns (4,118)
Less: Discounts (662)
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Net product sales 13,980
Licensing, publishing and other revenues 445
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Net revenues 14,425
Cost of sales 8,094
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Gross profit 6,331
Other operating expenses:
Selling, general and administrative 8,274
Depreciation and amortization 989
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Operating loss (2,932)
Interest income -
Interest expense (1,193)
Other financing costs (102)
Equity loss (325)
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Net loss (4,552)
Less: Preferred dividend requirements (1,865)
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Loss applicable to common shares $ (6,417)
==============
</TABLE>
P-2
