SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): May 27, 1998
CD RADIO INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-24710 52-1700207
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
14th Floor -- 1180 Avenue of the Americas, New York, New York 10036
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(Address of principal executive offices) (zip code)
(212) 899-5000
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(Registrant's telephone number, including area code)
6th Floor -- 1001 22nd Street, N.W., Washington, D.C. 20037
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(Former name or former address, if changed since last report)
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), the Company is hereby
providing cautionary statements identifying important factors that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements (as such term is defined in the Reform Act) made in
this Current Report on Form 8-K. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives, assumptions or
future events or performance (often, but not always, through the use of words or
phrases such as "will likely result," "are expected to," "will continue," "is
anticipated," "estimated," "intends," "plans," "projection" and "outlook") are
not historical facts and may be forward-looking. Such statements involve
estimates, assumptions and uncertainties that could cause actual results to
differ materially from those expressed in the forward-looking statements.
Accordingly, any such statements are qualified in their entirety by reference
to, and are accompanied by, the factors discussed in Annual Report on Form 10-K
for the year ended December 31, 1997, and investors should not place undue
reliance on any such forward-looking statements. Among the key factors that have
a direct bearing on the Company's results of operations are the potential risk
of delay in implementing the Company's business plan; increased costs of
construction and launch of necessary satellites; dependence on satellite
construction and launch contractors; risk of launch failure; unproven market and
unproven applications of existing technology; and the Company's need for
substantial additional financing.
Management cannot assess the impact of each such factor on the
Company's business or the extent to which any factor, or combination of factors,
may cause actual results to differ materially from those contained in any
forward-looking statements. Further, any forward-looking statement speaks only
as of the date on which such statement is made, and the Company undertakes no
obligation to update any forward-looking statement or statements to reflect
events or circumstances after the date on which such statement is made or to
reflect the occurrence of unanticipated events. New factors emerge from time to
time, and it is not possible for management to predict all of such factors.
ITEM 5. OTHER EVENTS
On May 27, 1998, the Company executed a Memorandum of Agreement ("MOA")
with Space Systems/Loral, Inc. ("Loral"), a wholly owned subsidiary of Loral
Space & Communications Ltd. The MOA sets forth the terms and conditions that
will be the basis for an amendment to the existing Satellite Construction
Agreement between the Company and Loral. Under terms of the MOA, Loral has
assumed responsibility for the turnkey, in-orbit delivery of the Company's
expanded satellite system and the Company has --- accordingly terminated its
prior launch contract with Arianespace. Loral has scheduled the launch of the
Company's three satellites for November 1999, December 1999, and January 2000,
resulting in the scheduled commencement of operations approximately three months
later than with the prior system.
The additional satellite will enable the Company to both expand its
planned channel formats and to address significant market segments that it would
otherwise
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be unable to address, including the Hispanic, sports, and other markets. The
additional satellite will be used to expand the Company's satellite
constellation from two satellites in geosynchronous equatorial orbits with a
ground spare satellite, to three satellites in geosynchronous North American
orbits with a ground spare satellite.
The expanded system will substantially increase the cost to the Company
of achieving operational status as compared with its earlier planned
constellation. The incremental cost of the expanded system is approximately $290
million, of which Loral Space & Communications Ltd. has assisted in arranging
$145 million of financing primarily through Bank of America. There can be no
assurance that the Company will be able to raise the required additional capital
or as to the terms on which it would be able to do so.
The proposed increase in the number of satellites and change in their
orbital location requires approval by the Federal Communications Commission (the
"FCC") to a modification of the Company's FCC license. The Company believes that
the FCC will approve such modification upon the Company demonstrating that its
modification will not result in additional interference to existing radio
frequency users. The Company intends to file an application for such approval,
including supporting technical matters, in due course and the Company expects
that all necessary approvals will be obtained. There can be no assurance that
such approvals will be obtained or will be obtained in a timely manner.
A copy of the Company's press release regarding the execution of the
MOA is attached hereto as an exhibit and incorporated herein by this reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS:
(i) Press release, dated May 28, 1998.
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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.
CD RADIO INC.
Date: June 1, 1998 By: /s/ David Margolese
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David Margolese
Chairman and Chief Executive Officer
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EXHIBIT INDEX
Exhibit Description of Exhibit
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99 Registrant's press release, dated May 28, 1998.
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Exhibit 99
FOR IMMEDIATE RELEASE
CD RADIO EXPANDS TO 100 CHANNELS WITH FOURTH SATELLITE
New York, N.Y. - May 29, 1998 - CD Radio Inc. (Nasdaq: CDRD) announced today
that it has exercised its option to purchase a fourth satellite from Loral Space
& Communications Ltd., doubling CD Radio's planned broadcast capacity to 100
channels in its nationwide satellite-to-car radio broadcasting system scheduled
for launch beginning next year.
"In terms of incremental value delivered to consumers, the step-up from 50
channels to 100 channels is analogous to the difference between a regular
bookstore and a Barnes and Noble superstore," said David Margolese, CD Radio's
chairman and chief executive. "The expanded system will be used to deliver more
of what people want -- more music, more choice. Additionally, it will also be
used to address the Hispanic and sports markets in a significant way, and to
generate additional advertising revenues on our non-music channels."
Under terms of the agreement, Loral replaces Arianespace as CD Radio's launch
service provider, delivering three Loral FS-1300 satellites in-orbit on a
turnkey basis along with one ground spare. Launches are scheduled for November
1999, December 1999, and January 2000. CD Radio's incremental cost of the
expanded system is approximately $290 million, of which Loral has provided
assistance in arranging $145 million of financing primarily through Bank of
America.
Last year, CD Radio was granted one of two FCC national satellite radio
broadcast licenses. The company is building a satellite-to-car 100 channel radio
system for the broadcast of music and other programming to motorists throughout
the United States. The majority of CD Radio's planned programming formats are
generally unavailable on conventional radio stations in any single market.
Furthermore, unlike conventional stations, which have an average range of
approximately 30 miles before reception fades, CD Radio's signal is designed to
cover the continental United States coast to coast. Music channels will be
commercial-free, unlike conventional stations which interrupt their broadcasts
with up to 18 minutes of commercials during every hour of music programming.
More information about CD Radio is available from the web site www.cdradio.com.
- more -
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Any statements that express, or involve discussions as to, expectations,
beliefs, plans, objectives, assumptions or future events or performance (often,
but not always, through the use of words or phrases such as 'will likely
result,' 'are expected to,' 'will continue,' 'is anticipated,' 'estimated,'
'intends,' 'plans,' 'projection,' and 'outlook') are not historical facts and
may be forward-looking and, accordingly, such statements involve estimates,
assumptions and uncertainties which could cause actual results to differ
materially from those expressed in the forward-looking statements. Accordingly,
any such statements are qualified in their entirety by reference to, and are
accompanied by, the factors discussed in CD Radio's Annual Report on Form 10-K
for the year ended December 31, 1997. Among the key factors that have a direct
bearing on CD Radio's results of operations are the potential risk of delay in
implementing CD Radio's business plan; increased costs of construction and
launch of necessary satellites; dependence on satellite construction and launch
contractors; risk of launch failure; unproven market and unproven applications
of existing technology; and CD Radio's need for additional substantial
financing.
For Further Information:
Madeline Couton, CD Radio, 212-899-5000
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CD Radio's 100 channels will offer listeners a wide range of music categories as
well as news, sports and talk radio programming. Currently, CD Radio anticiaptes
that its 100 broadcast channels will be allocated as follows:
1. Symphonic 51. News
2. Chamber Music 52. News
3. Opera 53. News
4. Top of the Charts 54. News
5. '50s Hits 55. News
6. '60s Hits 56. News
7. '70s Hits 57. News
8. '80s Hits 58. News
9. '90s Hits 59. News
10. Soft Rock 60. News
11. Love Songs 61. Sports
12. Singers & Songs 62. Sports
13. Beautiful Instrumentals 63. Sports
14. Broadway's Best 64. Sports
15. Big Band/Swing 65. Sports
16. Classic Jazz 66. Sports
17. Contemporary Jazz 67. Sports
18. NAC Jazz 68. Sports
19. New Age 69. Sports
20. Soul Ballads 70. Sports
21. Contemporary R&B 71. Entertainment
22. Classic Soul Hits 72. Entertainment
23. R&B Oldies 73. Entertainment
24. Rap/Hip Hop 74. Entertainment
25. Dance 75. Entertainment
26. Tropical 76. Entertainment
27. Latin Jazz 77. Entertainment
28. Boleros 78. Entertainment
29. Latin Contemporary 79. Entertainment
30. Merengue 80. Entertainment
31. Cumbia 81. Hispanic
32. Mexicana 82. Hispanic
33. Tex-Mex 83. Hispanic
34. Rock en Espanol 84. Hispanic
35. Country Hits 85. Hispanic
36. Modern Country 86. Hispanic
37. Classic Country 87. Hispanic
38. Folk Rock 88. Hispanic
39. Alternative Rock I 89. Hispanic
40. Alternative Rock II 90. Hispanic
41. Classic Rock I 91. Specialty
42. Classic Rock II 92. Specialty
43. Album Rock 93. Specialty
44. Hard Rock/Metal 94. Specialty
45. Blues 95. Specialty
46. Reggae 96. Specialty
47. World Beat 97. Specialty
48. Gospel 98. Specialty
49. Contemporary Christian 99. Specialty
50. Children's Entertainment 100. Specialty
