SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
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): May 12, 1999
(Date of event reported in original Report on
Form 8-K filed on December 27, 1999)
5TH AVENUE CHANNEL CORP.
(Exact name of registrant as specified in its charter)
FLORIDA 0-25896 59-3175814
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
3957 N.E. 163RD STREET, MIAMI, FLORIDA 33160
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 947-3010
<PAGE>
Item 7. Financial Statements And Exhibits
(c) Exhibits
99.2 Attached as Exhibit 99.2 to this current report on Form
8-K are the pro forma financial statements for the year ended December 31, 1998
giving effect to the acquisition of certain assets of International Broadcast
Consultants of America, Inc. by the Company as disclosed in the Company's
quarterly report on Form 10-QSB filed on May 17, 1999. This Exhibit 99.2
includes notes and replaces Exhibit 99.2 filed on the Company's current report
on Form 8-K filed on December 27, 1999 which, through clerical error,
inadvertently excluded the notes.
<PAGE>
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.
Dated: December 29, 1999
5TH AVENUE CHANNEL CORP.
By: /S/ MELVIN ROSEN
----------------------------
Melvin Rosen, President
<PAGE>
EXHIBIT INDEX
99.2 Prom Forma Financial Statements giving effect to the acquisition of certain
assets of International Broadcast Consultants of America, Inc.
EXHIBIT 99.2
PRO FORMA FINANCIAL STATEMENTS OF
INTERNATIONAL BROADCAST CONSULTANTS
OF AMERICA, INC. AND AFFILIATE
FOR THE YEAR ENDED DECEMBER 31, 1998
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED) OF 5TH AVENUE CHANNEL CORP.
Introduction
The accompanying unaudited condensed consolidated financial information of 5th
Avenue Channel Corp. gives effect to the acquisition by 5th Avenue Channel Corp.
of certain assets, liabilities and business operations of International
Broadcast Consultants of America, Inc. (IBC). The acquisition was accounted for
under the purchase method of accounting.
The pro forma condensed consolidated balance sheet was prepared as if such
transaction had occurred on December 31, 1998. The pro forma condensed
consolidated statement of operations was prepared as if such transaction had
occurred on January 1, 1998.
The pro forma condensed consolidated balance sheet includes adjustments for the
recapitalization of the Company whereas the Company's President converted his
convertible debenture into shares of the Company's common stock.
The pro forma condensed consolidated balance sheet and statement of operations
are not necessarily indicative of the consolidated financial position or results
of operations as they might have been had the transaction actually occurred on
the dates indicated. The pro forma consolidated balance sheet and statement of
operations should be read in conjunction with the financial statements of 5th
Avenue Channel Corp.
<PAGE>
5TH AVENUE CHANNEL CORP.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
------------ ------------ ------------
ASSETS
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 256,209 $ 40,381 (a) $ 296,590
Accounts receivable, net 41,559 66,750 (a) 108,309
Loans receivable, related parties 28,191 88,406 (a) 116,597
Inventory -- 312,265 (a) 312,265
Prepaid expenses and other current assets 104,629 -- 104,629
------------ ------------ ------------
Total current assets 430,588 507,802 938,390
Property and Equipment, net 1,323,404 44,429 (a) 1,367,833
Licenses, net 4,651,061 -- 4,651,061
Acquired Intangibles, net 615,000 2,516,840 (a) 3,131,840
Other Assets 87,119 26,424 (a) 113,543
------------ ------------ ------------
TOTAL ASSETS $ 7,107,172 $ 3,095,495 $ 10,202,667
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 775,417 182,495 (a) 957,912
Current portion of long-term debt 26,840 -- 26,840
Loans and notes payable, related parties 972,529 450,000 (a) 1,422,529
Accrued salary, President 270,000 -- 270,000
Convertible debentures, net 390,652 -- 390,652
------------ ------------ ------------
Total current liabilities 2,435,438 632,495 3,067,933
Long-term debt:
Convertible debenture to President 2,366,000 (2,366,000) --
Convertible subordinated debentures, net of unamortized discount 232,449 -- 232,449
License installment payment plan notes 931,148 -- 931,148
Other long-term debt 1,960 -- 1,960
------------ ------------ ------------
5,966,995 (1,733,505) 4,233,490
------------ ------------ ------------
Stockholders' Equity:
Common stock 4,504 300 (a) 9,536
4,732 (b)
Additional paid-in-capital 9,942,225 2,462,700 (a) 14,766,193
2,361,268 (b)
Deficit (8,806,552) -- (8,806,552)
------------ ------------ ------------
Total stockholders' equity 1,140,177 4,829,000 5,969,177
------------ ------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,107,172 $ 3,095,495 $ 10,202,667
============ ============ ============
</TABLE>
<PAGE>
5TH AVENUE CHANNEL CORP.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
5TH AVENUE PRO FORMA
CHANNEL CORP. IBC ADJUSTMENTS PRO FORMA
------------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Revenue 1,453,033 1,174,013 2,627,046
Direct Costs 235,367 928,947 -- 1,164,314
--------- ------- ------- ---------
Gross Margin 1,217,666 245,066 -- 1,462,732
Operating Expenses:
Selling, general and administrative 2,734,473 667,511 167,789 (c) 3,569,773
Website and product development 696,762 -- 696,762
Provision for asset impairment 350,000 -- 350,000
Salaries -- 266,490 -- 266,490
--------- ------- ------- ---------
3,781,235 934,001 167,789 4,883,025
--------- ------- ------- ---------
Net Income (Loss) from Operations (2,563,569) (688,935) (167,789) (3,420,293)
Othe Income (Expense):
Interest income 2,377 513 -- 2,890
Interest expense (736,749) -- (27,000) (d) (763,749)
Termination proceeds: --
Distribution agreement -- 363,887 (363,887) (e) --
Joint Venture -- 450,000 (450,000) (e) --
Loss on investment -- (40,750) 40,750 (e) --
--------- ------- ------- ---------
(734,372) 773,650 (800,137) (760,859)
--------- ------- ------- ---------
Net Income (Loss) Before Taxes (3,297,941) 84,715 (967,926) (4,181,152)
----------
Provision for Income Taxes -- 22,000 (22,000) (f) --
--------- ------- ------- ---------
Net Income (Loss) (3,297,941) 62,715 (945,926) (4,181,152)
========= ======= ======= =========
Net Income) Loss Per Common Share - Basic and Diluted (0.81) (0.46)
========= =========
300,000 (a)
Weighted Average Number of Shares Outstanding 4,080,242 4,732,000 (b) 9,112,242
========= ========= =========
</TABLE>
<PAGE>
5TH AVENUE CHANNEL CORP.
Weighted average shares outstanding at 12/31/98 4,080,242
Shares issued to Mel
(considered to have been outstanding the entire year) 4,732,000
Shares to be issued to IBC
(considered to have been outstanding the entire year) 300,000
-----------
Total pro forma shares outstanding 9,112,242
Pro forma net loss (4,181,152)
Pro forma EPS (0.46)
===========
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
5TH AVENUE CHANNEL CORP.
NOTE 1 - BASIS OF PRESENTATION
Effective January 4, 1999, 5th Avenue Channel Corp. (the "Company") acquired the
assets, certain liabilities, and business operations of International Broadcast
Consultants of America, Inc., (IBC). The transaction was completed on May 12,
1999. Under the terms of the agreement, the Company agreed to issue 300,000
shares of its common stock and pay $450,000 to IBC. The transaction was
accounted for under the purchase method of accounting. The total consideration
exceeded the estimated fair market value of the net tangible assets acquired by
approximately $2,516,840. The excess has been recorded as acquired intangibles
and is being amortized over 15 years.
NOTE 2 - PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET ADJUSTMENTS (UNAUDITED)
Adjustments to the pro forma condensed consolidated balance sheet (unaudited)
were made to:
(a) Reflect the various assets and liabilities acquired, the note payable to
IBC, the shares to be issued and the resulting acquired intangibles.
(b) Reflect the conversion of the convertible debenture to the President into
4,732,000 shares of the Company's common stock.
NOTE 3 - PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS ADJUSTMENTS (UNAUDITED)
Adjustments to the pro forma consolidated statement of operations were made to:
(c) Reflect the amortization of the acquired intangibles over 15 years, as if
the transaction had occurred on January 1, 1998.
(d) Reflect interest expense at 6% on the note issued to IBC, as if the
transaction had occurred on January 1, 1998.
(e) Eliminate certain elements of other income and expenses of IBC. These
transactions were settlements on joint venture and distribution agreements
which are considered non-recurring.
(f) Eliminate IBC tax liability.
