UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
Amendment No.2 to Current Report
TRANSMEDIA ASIA PACIFIC, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 13-3760219
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(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 Event: December 2, 1997
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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Item 2. Acquisition or Disposal of Assets
On December 2, 1997, Transmedia Australia Holdings Pty Ltd ("Transmedia
Australia"), an Australian company owned equally by the Company and TME,
purchased 51% of the common stock of NHS Australia Pty Limited ("NHS"). NHS
purchased the net assets and business of Nationwide Helpline Services Pty Ltd
("Nationwide"). Nationwide was established in 1989 and is an Australian based
provider of "member benefit programs". The operations of Transmedia Australia
are controlled by the Company and accordingly Transmedia Australia's accounts
are consolidated into those of the Company. The total consideration paid by
Transmedia Australia for its 51% interest in the equity capital of NHS was
Aus$6,000,000 (approximately $4,290,000 as of December 2, 1997). Transmedia
Australia also agreed to purchase the balance of the equity capital of NHS for
Aus$2,500,000 (approximately $1,787,500) on June 30, 1998 with the right to
extend such obligation ("Balance Obligation") until September 30, 1998 by paying
interest at 5% per annum. Transmedia Australia exercised the extension right. In
addition, the Company and TME agreed to pay Aus$4,000,000 in sign-on fees to the
two former executive directors of Nationwide.
The Aus$6,000,000 required to complete the acquisition of 51% of NHS was to be
advanced to Transmedia Australia by the Company and TME as follows:
Company TME Total
Deposit 200,000 200,000 400,000
1st Instalment 1,400,000 1,400,000 2,800,000
2nd Instalment 1,400,000 1,400,000 2,800,000
Total 3,000,000 3,000,000 6,000,000
The deposit was paid to the sellers in June, 1997. The first instalment of
Aus$2,800,000 was paid in December 1997, 50% in cash and the balance by the
issuance of 500,000 of the common stock of each of the Company and TME (valued
at the then market price). The second instalment was payable on January 31,
1998. However, pursuant to the terms of the acquisition agreement, such payment
date was extended to May 1, 1998. As a result of the extension of the payment
date, Transmedia Australia became liable to pay interest at the rate of 5% per
annum during such extension period. The second instalment was paid on May 1,
1998 together with accrued interest in the sum of Aus$34,781.
In connection with the acquisition, NHS entered into employment contracts with
Mr. Kevin Bostridge ("Bostridge") and Mr. Robert Swinbourn ("Swinbourn"),
shareholders and former executive directors of Nationwide. Each of the contracts
were for a fixed term of three years
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TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
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and provided for the payment of an annual salary of Aus$200,000 to Bostridge and
Aus$150,000 to Swinbourn. As an inducement to Bostridge and Swinbourn to enter
into such employment contracts, the Company and TME agreed to jointly pay
sign-on fees of Aus$4,000,000 (approximately $2,860,000) in aggregate to
Bostridge and Swinbourn. Such sign-on fees were apportioned to Aus$2,914,286
pertaining to Bostridge and Aus$1,085,714 pertaining to Swinbourn and were
payable by instalment.
The first instalment was payable on January 31, 1998 of which an aggregate of
Aus$1,250,000 could be deferred until May 1, 1998. On January 31, 1998, in lieu
of the required minimum payment of Aus$750,000, Aus$203,571 was paid in cash and
the balance was settled by a promissory note in the sum of Aus$546,429 payable
on June 30, 1998. The promissory note was guaranteed by Mr. Edward Guinan,
Chairman of the Company. The promissory note has been fully repaid. The
Aus$1,250,000 due on May 1, 1998 was paid together with accrued interest thereon
at 5% per annum, approximately Aus$15,240. The second instalment was due for
payment on June 30, 1998 but was deferred until September 30, 1998.
The Company was unable to make the payments due on September 30, 1998. However,
the Company commenced negotiations with Nationwide and on October 21, 1998
reached an agreement pursuant to which the settlement date for the Balance
Obligation and the final settlement of the Sign-on Fees was extended to November
16, 1998. In addition, the 2nd instalment of the Sign-on Fees was reduced from
Aus$1 million for each of the Company and TME (a total of Aus$2 million) to
Aus$500,000 for each of the Company and TME (a total of Aus$1 million). Finally,
it was agreed that the employment contracts of Messrs Bostridge and Swinbourn be
terminated effective November 16, 1998 upon payment of three months salary to
each. On November 17, 1998 the Balance Obligation, the reduced final instalment
of the Sign-on Fees and the three months salary to Bostridge and Swinbourn were
paid in full. In addition, accrued interest in the amount of Aus$47,557
(approximately $29,960) was paid.
The final payments to Nationwide and Bostridge and Swinbourn were funded from
the proceeds of a 1 Year Secured Promissory Note ("Promissory Note") in the
principal sum of $3.4 million executed on November 16, 1998 between the Company
and FAI General Insurance, a shareholder of the Company. Interest on the
Promissory Note accrues at the rate of 10% per annum and is payable quarterly in
arrears. The Promissory Note is secured by a charge over Transmedia Australia
and is guaranteed by TME. The Promissory Note holder received a three-year
warrant to purchase 1 million shares of the Company's common stock at an
exercise price of $1.00 per share. In addition, the Company agreed to exchange
warrants to purchase 633,366 shares of its common stock at exercise prices of
$1.00 to $1.40, already held by the Promissory Note holder, for a warrant to
purchase 633,366 shares of the Company's common stock at an exercise price of
$1.00. The warrant is exercisable at any time from November 16, 1998 through
November 15, 2001. The Promissory Note holder also held warrants on similar
terms to purchase 633,366 shares of the common stock of TME. Such warrants were
exchanged by TME for a new warrant on the same terms as those of the Company.
This amended Form 8K/A is filed to report the purchase of the balance of the
equity capital of NHS and to provide the pro forma financial information related
thereto.
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TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
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Item 7. Financial Statements and Exhibits
(a) Pro forma Financial Information
The following pro forma unaudited balance sheet is presented as if the NHS
acquisition had occurred on October 1, 1996. The pro forma unaudited
consolidated statement of operations for the year ended September 30, 1997
is presented as if the NHS acquisition had occurred on October 1, 1996.
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 of the Company would have been if the NHS acquisition had
occurred on the dates set forth. These proforma consolidated balance sheet
and proforma statement of operations should be read in conjunction with
the historical financial statements and notes thereto of the Company.
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TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
PROFORMA CONSOLIDATED BALANCE SHEET
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<TABLE>
<CAPTION>
September September
30, Proforma Consolidation 30,
1997 adjustments adjustments 1997 Note
(Audited) (NHS)
<S> <C> <C> <C> <C> <C>
Assets
Current assets
Cash 13,104 978,520 (148,652) 842,972 1
Trade accounts receivable 56,563 181,785 238,348
Restaurant credits 301,815 0 301,815
Amounts due from related parties 258,533 13,394 271,927
Prepaid expenses and other current
assets 18,784 19,483 38,267
Total current assets 648,799 1,193,183 (148,652) 1,693,330
Non-current assets
Investment in affiliated company 2,715,442 0 2,715,442
Property and equipment 94,250 356,169 450,419
Intangible assets 1,196,943 0 1,196,943
Goodwill 0 0 4,878,792 4,878,792 1,2
Other assets 142,946 21,617 164,563
Total assets 4,798,380 1,570,969 4,730,140 11,099,489
Liabilities and Stockholders' Equity
Current liabilities
Trade accounts payable 267,232 416,102 683,334
Deferred membership fee income 104,375 90,062 194,437
Accrued liabilities 330,908 147,113 925,417 1,403,438 3
Loan payable 198,523 796,000 994,523 1
Provision for tax 193,336 193,336
Amount due to related party 1,345,712 0 2,977,614 4,323,326
Total current liabilities 2,048,227 1,045,136 4,699,031 7,792,394
Non-current liabilities
Unearned Income 120,084 120,084
Hire purchase liability 22,864 22,864
Total liabilities 2,048,227 1,188,084 4,699,031 7,935,342
Stockholders' equity
Common stock 153 725 (725) 153 1
Additional paid in capital 9,962,922 0 2,032,973 11,995,895 1
Accumulated deficit (7,376,641) 382,160 (2,001,139) (8,995,619) 1,2,3
Foreign currency exchange reserve 163,719 0 0 163,719 1
Total stockholders' equity 2,750,153 382,885 31,109 3,164,148
Total liabilities and stockholders'
equity 4,798,380 1,570,969 4,730,140 11,099,489
</TABLE>
See accompanying notes
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TRANSMEDIA ASIA PACIFIC INC. AND SUBSIDIARIES
PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS
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<TABLE>
<CAPTION>
Year ended
Year ended Proforma Consolidation September 30,
September 30, adjustments adjustments 1997 Note
1997 (NHS)
(Unaudited)
<S> <C> <C> <C> <C> <C>
Total revenues 2,129,362 2,872,105 5,001,467
Cost of sales (1,257,769) (458,122) (1,715,891)
Gross profit 871,593 2,413,984 0 3,285,577
Selling, general and
administrative expenses (3,723,330) (2,106,084) (1,273,902) (7,103,316) 2,3
Royalty 0 0
Profit/(loss) from operations (2,851,737) 307,899 (1,273,902) (3,817,740)
Share of profits/losses of
associated company (209,715) 0 (209,715)
Interest income 31,007 27,556 58,563
Profit/(loss) before income taxes (3,030,445) 335,455 (1,273,902) (3,968,892)
Income taxes 0 (136,490) (136,490)
Net profit/(loss) (3,030,445) 198,965 (1,273,902) (4,105,382)
Loss per common share $(0.22) (0.30)
Weighted average number of common
shares outstanding 13,802,812 13,802,812
</TABLE>
See accompanying notes
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TRANSMEDIA ASIA PACIFIC INC. AND SUBSIDIARIES
NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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Note 1: To record the acquisition by Transmedia Australia of 100% of the
common stock of NHS and record goodwill on acquisition
Aus$ US$
Total Consideration 8,935,005 5,955,228
Total consideration includes $Aus435,000
(approx $285,000) in legal fees, stamp
duty and other incidental costs
Net assets of business acquired (100%) 1,019,131 727,951
Goodwill 7,915,874 5,227,277
Consideration consists of
Cash advanced by the Company 3,763,773 2,477,614
Advance from TME 4,467,503 2,977,614
Issuance of common stock by the Company 703,730 500,000
Pro forma journal entry required to record the acquisition:
Aus$ $
Dr Goodwill 7,915,874 5,227,277
Dr Accumulated profits 1,018,131 727,236
Dr Share capital 1,000 714
Cr Investment in NHS (8,935,005) (5,955,228)
Cash advanced by the Company was sourced as follows -
$620,000 was sourced from a Private Placement of shares dated August 7, 1998
which closed on December 31, 1997. $148,000 was sourced from existing cash
reserves. $913,000 was sourced from a Private Placement of shares dated February
1, 1998 which closed on April 30, 1998 and $796,000 from a $3.4 million loan
note facility entered into on November 17, 1998
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Note 2: To record the amortization of goodwill by Transmedia Australia
For the year to September 30, 1997
Dr Amortization expense 527,725 348,485
Cr Accumulated amortization - goodwill (527,725) (348,485)
Goodwill is being amortized on a straight line basis over a period of fifteen
years.
Note 3 To record the Company's share of the sign-on fees due to the former
executive directors of NHS
Dr Compensation expense 925,417
Cr Purchase consideration liability (925,417)
Note 4. Exchange rates used to prepare Proforma financial information
Closing rate of exchange at December 3, 1997 is $0.7143 = Aus$1 Closing rate of
exchange at September 30, 1997 is $0.7251 = Aus$1 Average exchange rate for the
12 months ended September 30, 1997 is $0.7300 = Aus$1
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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 thereunto duly authorised.
TRANSMEDIA ASIA PACIFIC, INC.
By: /s/ Paul Harrison
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Paul Harrison
President and Chief Financial Officer
January 15, 1999
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