UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
Amendment No. 2 to Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
TRANSMEDIA ASIA PACIFIC, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 13-3760219
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
11 ST. JAMES'S SQUARE, LONDON SW1Y 4LB, ENGLAND
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(Address of principal executive offices) (zip code)
U.K. 011-44-171-930-0706
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including area code)
Date of Report: April 3, 1997
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days
Yes |_| No |X|
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TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
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This Current Report on Form 8-K (Amendment No. 2) amends in its entirety Item 7
of the Form 8-K (Amendment No. 1) filed on June 17, 1997.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
In accordance with Rule 210.3-05(b) of Regulation S-X, the audited consolidated
financial statements and independent auditor's report for Countdown Holdings
Limited ("Countdown") covering the years ended August 31, 1996, 1995 and 1994
were included in Form 8K/A filed by the Company dated June 16, 1997.
(b) Pro forma financial information
On April 3, 1997, Transmedia Asia Pacific, Inc. (the "Company") purchased from
Mr. C.E.C. Radbone approximately 50% of the outstanding capital stock of
Countdown. Countdown, through its wholly-owned operating subsidiary, Countdown
Plc, is an international provider of membership discount services. The
transaction (the "Acquisition") was consummated pursuant to an Acquisition
Agreement dated as of April 3, 1997 (the "Acquisition Agreement") among the
Company, C.E.C. Radbone and Transmedia Europe, Inc. ("Transmedia Europe"). In
accordance with the Acquisition Agreement, the balance of the outstanding
capital stock of Countdown was simultaneously purchased by Transmedia Europe on
terms similar to the terms of the Company's purchase. Transmedia Europe shares
common directors, officers and a principal stockholder with the Company, and is
engaged in the discount restaurant charge card business in certain countries
outside of the Company's licensed territory.
In payment of the purchase price, the Company issued 1,330,524 shares (the
"Radbone Shares") of its common stock, $.00001 par value per share ("Common
Stock"), and paid (pounds)500,000 (approximate U.S. Dollar equivalent as of
April 3, 1997 was $800,000) in cash. In addition, the Company granted to Mr.
Radbone an option to purchase up to 277,193 shares of Common Stock at a purchase
price of $.9019 per share. The Company granted Mr. Radbone piggyback and demand
registration rights with respect to the Radbone Shares.
The cash portion of the purchase price was funded by a $1,000,000 loan from a
director and stockholder of the Company. The loan matures on September 27, 1997,
bears interest at the rate of 12% per annum, and is collateralized by a pledge
of all of the shares purchased by the Company from Mr. Radbone. In connection
with the loan, the Company issued to the director and stockholder five-year
warrants to purchase up to 138,596 shares of Common Stock at $1.13 per share and
granted piggyback registration rights with respect to such shares.
Contemporaneously with the Acquisition, Countdown Plc entered into an employment
agreement with Mr. Radbone pursuant to which Mr. Radbone is employed as Managing
Director of Countdown Plc. The agreement is for an initial term of three years
and provides for a base salary of approximately (pounds) 100,000 subject to such
annual increases as Countdown Plc in its sole discretion may determine. Mr.
Radbone is entitled to participate in pension and benefit programs (including
Countdown Plc continuing to pay the sum equivalent of (pounds) 20,000 per annum
for Mr. Radbone's participation in the pension plan) and is entitled to use of a
car at the expense of Countdown Plc. The agreement contains provisions regarding
the assignment by
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Mr. Radbone of intellectual property rights and restrictive covenants relating
to disclosure of confidential information and competitive activities.
Upon consummation of the Acquisition, Mr. Radbone was elected a director of the
Company, and Messrs. Edward J. Guinan III and Paul Harrison were elected
directors of Countdown and Countdown Plc. Mr. Radbone continues as a director of
Countdown and Countdown Plc. In August 1996, International Advance, Inc., a
stockholder of the Company and a company which shares a common principal
stockholder with the Company, purchased an option for (pounds) 250,000 to
acquire Countdown. The option was subsequently assigned to the Company and
Transmedia Europe in consideration for (pounds) 250,000 (plus reimbursement for
legal fees), which amount was borne equally by the Company and Transmedia
Europe.
In connection with the Acquisition, the Company and Transmedia Europe each
agreed to pay $125,000 in cash to TMNI International Incorporated ("TMNI") and
each agreed to issue to TMNI a promissory note in the principal amount of
$250,000, payable April 2, 1998 and bearing interest at the rate of 10% per
annum. The promissory notes are to be convertible at the holder's option into
common stock of the issuer at the rate of $1.20 per share. The Company agreed to
pay such amounts in order to obtain the consent of TMNI to the Acquisition,
which consent was required by the terms of the master license agreement from
TMNI under which the Company operates its discount restaurant charge card
business.
A more detailed explanation of the transaction can be found under Item 2 -
Acquisition or Disposition of Assets within the original filing of this Form 8-K
filed by the Company dated April 3, 1997.
The following pro forma unaudited consolidated balance sheet is presented as if
the Countdown acquisition had occurred on March 31, 1997. The pro forma
unaudited consolidated statements of operations for the year ended September 30,
1996 and the six month period ended March 31, 1997 have been presented as if the
Countdown acquisition had occurred on October 1, 1995. The pro forma data is
presented for informational purposes only and may not be indicative of the
results of operations and the future financial position of the Company or what
the results of operations and financial position would have been if the
Countdown acquisition had occurred on the dates set forth. These pro forma
consolidated balance sheet and pro forma statements of operations should be read
in conjunction with the historical consolidated financial statements and notes
thereto of the Company.
The pro forma balance sheet presents the investment in Countdown under the
equity method of accounting since the Company has acquired approximately 50% of
the ordinary share capital of Countdown and does not have overall control of
Countdown.
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TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
PROFORMA UNAUDITED CONSOLIDATED BALANCE SHEET
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, Proforma
1997 Proforma March 31,
(Unaudited) adjustments Note 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Assets
Current assets
Cash $ 653,251 $ 54,350 (1),(2) $ 707,601
Trade accounts receivable 25,016 25,016
Restaurant credits 497,241 497,241
Amounts due from related parties 334,428 334,428
Prepaid expenses &
other current assets 57,446 57,446
----------- ----------- -----------
Total current assets 1,567,382 54,350 1,621,732
Non-current assets
Investment in affiliated company -- 2,164,819 (1),(3),(4) 2,164,819
Property and equipment 148,620 -- 148,620
Intangible assets 1,534,805 -- 1,534,805
Other 406,952 (264,006) (4) 142,946
----------- ----------- -----------
Total assets $ 3,657,759 $ 1,955,163 $ 5,612,922
=========== =========== ===========
Current liabilities
Loan Notes $ -- $ 1,000,000 (2) $ 1,000,000
Trade accounts payable 236,968 236,968
Deferred membership fee income 81,804 81,804
Accrued liabilities 236,414 217,500 453,914
----------- ----------- -----------
Total current liabilities 555,186 1,217,500 1,772,686
Non Current liabilities
Long term loan -- 250,000 (3) 250,000
----------- ----------- -----------
Total liabilities 555,186 1,467,500 2,022,686
Stockholders' equity
Common stock 139 13 (1) 152
Additional paid in capital 8,568,244 1,222,818 (1) 9,791,062
Accumulated deficit (5,525,345) (735,168) (6,260,513)
Foreign currency translation reserve 59,535 -- 59,535
----------- ----------- -----------
Total stockholders' equity 3,102,573 487,663 3,590,236
----------- ----------- -----------
Total liabilities and
Stockholders' equity $ 3,657,759 $ 1,955,163 $ 5,612,922
=========== =========== ===========
</TABLE>
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TRANSMEDIA ASIA PACIFIC INC. AND SUBSIDIARIES
PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS
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<TABLE>
<CAPTION>
Year ended Proforma
September 30, Year ended
1996 Proforma September 30,
(Audited) Adjustments Note 1996
------------ ------------ ------ ------------
<S> <C> <C> <C> <C>
Revenues $ 1,659,515 $ -- $ 1,659,515
Membership Fees 230,961 -- 230,961
------------ ------------ ------------
Total Revenues and Fees 1,890,476 -- 1,890,476
Cost of sales (1,098,666) -- (1,098,666)
------------ ------------ ------------
Gross profit 791,810 -- 791,810
Selling, general and
administrative expenses (2,819,073) (203,747) (7) (3,022,820)
------------ ------------ ------------
Loss from operations (2,027,263) (203,747) (2,231,010)
Share of losses of affiliate -- (176,446) (5) (176,446)
Interest income 21,005 -- 21,005
Interest expense -- (145,000) (6) (145,000)
------------ ------------ ------------
Loss before income taxes (2,006,258) (525,192) 2,531,450
Income taxes -- -- --
------------ ------------ ------------
Net loss (2,006,258) (525,192) 2,531,450
------------ ------------ ------------
Loss per common share $ (0.16) $ (0.18)
Weighted average number of
common shares outstanding 12,618,400 13,948,924
</TABLE>
See accompanying notes to the pro forma consolidated financial statements.
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TRANSMEDIA ASIA PACIFIC INC. AND SUBSIDIARIES
CONDENSED PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS
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<TABLE>
<CAPTION>
Six months ended Proforma
March 31, Six months ended
1997 Proforma March 31,
(Unaudited) adjustments Note 1997
------------ ------------ ------ ------------
<S> <C> <C> <C> <C>
Revenues $ 1,054,735 $ -- $ 1,056,735
Membership Fees 99,940 -- 99,940
------------ ------------ ------------
Revenues and Fees 1,154,675 -- 1,154,675
Cost of sales (688,036) -- (688,036)
------------ ------------ ------------
Gross profit 466,639 -- 466,639
Selling, general and
administrative expenses (1,664,282) (101,873) (1,299,516)
------------ ------------ ------------
Loss from operations (1,197,643) (101,873) (1,299,516)
Share of losses of affiliate 0 (35,602) (5) (35,602)
Interest expense 0 (72,500) (6) (72,500)
Interest income 18,494 18,494
------------ ------------ ------------
Loss before income taxes (1,179,149) (209,975) (1,389,124)
Income taxes 0 0 0
------------ ------------ ------------
Net loss (1,179,149) (209,975) (1,389,124)
------------ ------------ ------------
Loss per common share (0.09) (0.09)
Weighted average number of
common shares outstanding 13,695,586 15,026,110
</TABLE>
See accompanying notes to the pro-forma consolidated financial statements.
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TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
NOTES TO THE PRO-FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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(1) To record the acquisition of approximately 50% of the outstanding stock
capital of Countdown Holdings Limited as follows:
Payment in cash 820,650
Fair value of 1,330,524 shares issued
- Common stock 13
- Additional paid in capital 1,222,818
Cost of Countdown option and related legal fees 264,006
Payment in cash to TMNI 125,000
TMNI promissory note 250,000
Total consideration 2,682,487
The fair value of the shares issued for the Countdown acquisition has been
calculated as $0.91906 per share. This was based on an average of the
average prices for the five trading days from April 1, 1997 to April 7,
1997 reduced by a 15% discount. The average of the five day period was
taken to eliminate share price volatility and the 15% discount reflects
the fact that the shares are unregistered and as such cannot be traded on
the Nasdaq SmallCap Market.
(2) To record the $1,000,000 loan received from a director and stockholder.
(3) To record the $250,000 promissory note payable to TMNI International
Incorporated. This has been accounted for as a loan repayable in more than
year in the pro forma balance sheet as it is payable on April 2, 1998.
(4) To record the transfer of the cost of $264,006 of the Countdown option
together with related legal costs from other assets to investment in
affiliated companies.
(5) To record the equity in losses of Countdown as follows:
Year Ended Six months ended
August 31, 1996 February 28, 1997
--------------- -----------------
Losses for the period $ (352,891) $ (71,204)
Company's share of losses $ (176,446) $ (35,602)
(6) To record the interest expense on the $1,000,000 loan at 12% per annum and
on the $250,000 promissory note at 10% per annum.
(7) To record the amortization of goodwill included in the investment at cost:
Total consideration $2,682,487
_______ of fair value of net liabilities acquired 373,715
Goodwill 3,056,202
Goodwill amortization expense
- for the year to September 30, 1996 203,747
- for the six months to March 31, 1997 101,873
Goodwill is begin amortized over a period of 15 years
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TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
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 thereunto duly authorized.
TRANSMEDIA ASIA PACIFIC, INC.
By: /s/ Paul Harrison
- -------------------------------------
Paul Harrison
President and Chief Financial Officer
Date: January 14, 1999
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