<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-QSB
Quarterly Report under Section 13 or 15(d)
of the Securities and Exchange Act of 1934
For quarterly period ended March 31, 1996
Commission file number 0-26828
-------
FOOD COURT ENTERTAINMENT NETWORK, INC.
(Exact name of registrant as specified in its charter)
Delaware 51-0338736
- - -------------------------------- ---------------------------------------
(State or other Jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
34-12 36th Street, Astoria, New York, 11106
(718) 937-5757
(Registrant's telephone number, including area code)
----------
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 [ x/ ] No [ ]
As of March 31, 1996, there were 3,793,125 shares of Series A Common Stock,
$0.01 par value of the registrant outstanding, 1,126,115 shares of Series B
Common Stock, $0.01 par value of the registrant outstanding, 4,345,000 Class A
Warrants of the registrant outstanding, and 3,220,000 Class B Warrants of the
registrant outstanding.
<PAGE>
FOOD COURT ENTERTAINMENT NETWORK, INC.
INDEX
PART I FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Condensed Balance Sheets as of
December 31, 1995 and
March 31, 1996 (unaudited)....................... 1
Condensed Statements of Operations
for the three months ended March 31,
1996 and 1995 (unaudited) and for
Period of Inception (February 12,
1996) through March 31, 1996......................2
Condensed Statements of Cash Flows
for the three months ended September 30,
1996 and 1995 (unaudited) and for the
Period of Inception (February 12,
1996) through March 31, 1996......................3
Notes to Condensed Financial Statements...........4
Item 2. Managements Discussion and Analysis
of Financial Condition and Results of
Operations........................................6
PART II OTHER INFORMATION.................................9
Signature Page...................................10
<PAGE>
FOOD COURT ENTERTAINMENT NETWORK, INC.
(a development stage company)
CONDENSED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
December 31, March 31,
1995 1996
(unaudited)
------------ ------------
<S> <C> <C>
ASSETS
Current assets-cash and cash equivalents ..................................................... $ 5,191,897 $ 3,515,611
Fixed assets-(less accumulated depreciation of $197,221 and $281,907 respectively) ........... 1,435,273 1,550,591
Other assets ................................................................................. 8,630 13,808
------------ ------------
TOTAL ASSETS ......................................................................... $ 6,635,800 $ 5,080,010
============ ============
LIABILITIES
Current Liabilities:
Accounts payable .......................................................................... $ 284,431 $ 142,440
Accrued expenses .......................................................................... 448,161 259,162
------------ ------------
Total current liabilities .................................................................... 732,592 401,602
Due to former employee ....................................................................... 200,000 200,000
------------ ------------
TOTAL LIABILITIES .................................................................... 932,592 601,602
============ ============
STOCKHOLDERS' EQUITY
Preferred stock- 5,000,000 shares authorized, none issued
Common Stock:
Series A common stock-$.01 par value, 25,000,000 shares authorized
3,793,125 outstanding ....................................................................... $ 37,931 $ 37,931
Series B common stock-$.01 par value, 1,250,000 shares authorized
1,146,250 outstanding ....................................................................... 11,462 11,462
Additional Paid in Capital ................................................................... 15,074,356 15,074,356
Deficit accumulated during the development stages ............................................ (9,420,340) (10,645,140)
------------ ------------
Total ..................................................................................... 5,703,409 4,478,609
Treasury stock ............................................................................... (201) (201)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY ........................................................... 5,703,208 4,478,408
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................................... $ 6,653,800 $ 5,080,010
============ ============
</TABLE>
See accompanying notes to condensed financial statements
<PAGE>
FOOD COURT ENTERTAINMENT NETWORK, INC.
(a development stage company)
STATEMENT OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
February 12, 1992
(Inception)
Through
March 31, March 31,
1995 1996 1996
---------- ----------- ----------------
<S> <C> <C> <C>
General and administrative expenses ............................. 94,884 173,953 1,168,830
Development costs ............................................... 513,632 1,104,316 8,983,551
---------- ----------- -----------
Total ................................................... 608,516 1,278,269 10,152,381
Other (income) expenses:
Interest Expense ........................................ 77,011 0 641,205
Interest and other (income) ............................. (1,109) (53,469) (148,446)
---------- ----------- -----------
NET (loss) ...................................................... (684,418) (1,224,800) 10,645,140
========== =========== ===========
Net (loss) per share of
common stock ............................................ $ (0.22) $ (0.25)
========== ===========
Number of common share and common
share equivalents used in computation ................... 2,422,517 4,919,240
========== ===========
</TABLE>
See accompanying notes to condensed financial statements
<PAGE>
FOOD COURT ENTERTAINMENT NETWORK, INC.
(a development stage company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Month period ending February 12, 1992
March 31, (inception)
--------------------------- through
1995 1996 March 31, 1996
---------- ----------- -----------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net (loss) .......................................................... $(684,418) $(1,224,800) $(10,645,140)
Adjustments to reconcile net income(loss)
cash provided by operating activities:
Depreciation and amortization ............................ 86,459 84,687 805,077
Value assigned to options and
warrants issued as compensation ...................... 108,583
Changes in operating assets and liabilities:
(Increase) decrease in other assets ................... (96,409) (5,178) (8,142)
Increase (decrease) in accrued
expenses and other liabilities ..................... 121,617 (330,990) 601,602
---------- ----------- ------------
Net Cash (used in) operating activities ......... (572,751) (1,476,281) (9,138,020)
---------- ----------- ------------
Cash Flows from Investing Activities
Purchase of property and equipment .................................. (417,432) (200,005) (1,832,499)
Organization costs .................................................. (11,336)
---------- ----------- ------------
Net Cash (used by) Investing Activities ............................. (417,432) (200,005) (1,843,835)
---------- ----------- ------------
Cash Flows from Financing Activities:
Net proceeds from sale of preferred
and common stock ................................................. 15,711,828
Capital contribution ................................................ 32,500
Redempton of preferred stock ........................................ (1,146,250)
Preferred dividends paid ............................................ (148,112)
Proceeds from bridge loan ........................................... 850,000 2,250,000
Repayment of bridge loan ............................................ (2,250,000)
Deferred financing costs ............................................ (110,500) (292,500)
Deferred registration costs ......................................... 390,000
Proceeds from (repayment of) directors and
officers loans ................................................... (50,000)
Proceeds from note payable .......................................... 954,572
Repayment of note payable ........................................... (954,572)
---------- ----------- ------------
Net Cash Provided by Financing Activities ........................... 739,500 0 14,497,466
---------- ----------- ------------
NET INCREASE (DECREASE) IN CASH ............................................. (250,683) (1,676,286) 3,515,611
Cash at beginning of period ................................................. 777,457 5,191,897 0
---------- ----------- ------------
CASH AT END OF PERIOD ....................................................... $526,774 $3,515,611 $3,515,611
========== =========== ============
Supplemental schedule of Non Cash financing activities:
Warrants issued in connection with bridge loan ............................ $ -- $ -- $225,000
Director and officer loans exchanged for common
and preferred stock .................................................... 150,000
Director loan contributed to capital ...................................... 190,000
Supplemental disclosure of cash flow information:
Cash paid for interest .................................................... 7,012 336,406
</TABLE>
See accompanying notes to condensed financial statements
<PAGE>
FOOD COURT ENTERTAINMENT NETWORK, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Financial Statements
- - --------------------
In the opinion of management, the accompanying unaudited, condensed financial
statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position of the Company
and its results of operations and cash flow for the interim periods presented.
Such financial statements have been condensed in accordance with the applicable
regulations of the Securities and Exchange Commission and, therefore, do not
include all disclosures required by generally accepted accounting principles.
The results of operations for the three months ended March 31, 1996 are not
necessarily indicative of the results to be expected for the entire fiscal year.
These financial statements should be read in conjunction with the financial
statements included in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1995.
Loss Per Share of Common Stock
- - ------------------------------
Net loss per share of common stock for the three months ended March 31, 1995
is based on the weighted average number of shares outstanding during such
period, as modified in accordance with "cheap stock" rules of the Securities
and Exchange Commission. For the three months ended March 31, 1996 options
and warrants have been excluded as they are anti-dilutive. Series B common
shares in escrow have been excluded for all periods. Net loss has been
adjusted for the three months ended March 31, 1995 for the amortization of an
assumed discount on the Series A redeemable preferred stock.
Commitments
- - -----------
In April 1996 the Company entered into a two-year agreement (the "Agreement")
with Turner Private Network, Inc. ("Turner") pursuant to which Turner will be
the exclusive provider of programming to the Company for its Cafe USA Network
and Turner Broadcasting Sales, Inc. will be the exclusive sales agent. As
consideration the Company will deliver to Turner a promissory note for
$1,250,000 and will issue 250,000 shares of its Series A common stock. The
promissory note is payable to Turner upon the later of (i) March 31, 1997 or
(ii) completion and timely delivery of 52 weekly programs. The value of the
promissory note will be charged to operations over the first year of the
Agreement and operations will be charged for the fair value of the shares when
they are earned by Turner. The second year of programming provides for payment
of up to $3,500,000 in cash or other consideration to be determined. The
Company will pay sales commissions of 10% and up to 15% of net ad sales (as
defined in the Agreement) for the first and second year, respectively. Pursuant
to the Agreement, the Company will nominate one member of Turner management and
has decided to add an additional member of Turner management to the Company's
Board of Directors.
The Company and Capital Cities/ABC New Media Sales ("Capital Cities/ABC")
have preliminarily agreed to suspend a representation agreement between the
parties pursuant to which Capital Cities/ABC provided sales representation
services to the Company. The Company will pay Capital Cities/ABC an
aggregate of $100,000 on or before October 1, 1996 and by October 1, 1997 will
either resume such agreement or pay $100,000 to terminate such agreement. As
of March 31, 1996 the Company has $57,500 accrued in connection with this
agreement.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
The following discussion and analysis should be read in conjunction
with the financial statements and notes thereto appearing elsewhere in this
Report. The Company is a development stage company which has engaged primarily
in research relating to acceptance of Cafe USA by advertisers, mall operators
and mall visitors, the development of programming to conduct necessary testing
and the test of the Cafe USA model. The Company has no history of revenues and
currently has no commitments for revenues. The Company's principal expenses from
its inception through March 31, 1996 have been salaries and payments to
consultants ($3,566,800), production costs for Cafe USA programming ($2,433,100)
and advertising/marketing expenses ($1,056,000). Additionally, the Company
invested approximately $1,832,500 in capital equipment through March 31, 1996.
Accordingly, as of March 31, 1996, the Company had a deficit accumulated in the
development stage of approximately $10,645,100. The Company continues to incur
substantial losses and is utilizing the proceeds of its initial public offering
(the "Offering") to continue its business. For the foreseeable future, and until
significant sales, if any, of advertising occur, the Company expects losses to
continue and is entirely dependent on public or private financing.
During the first quarter of fiscal 1996, the Company assessed the
results of its programming and advertising broadcasting on the CAFE USA Network
during the fourth quarter of 1995 (the "Evaluatory Period") and entered into
discussions with advertisers, mall developers and potential sources of
financing.
General and administrative expenses increased for the three months
ended March 31, 1996 compared to the corresponding prior year period due
principally to additional costs for staffing and consultants.
Development costs increased for the three months ended March 31, 1996,
as compared to the corresponding prior year period, due to the increased
programming, broadcast operations and market research costs associated with the
broadcast of programming in four malls.
Interest expense decreased from the corresponding prior year period due
to repayment of bank loans and bridge notes.
Charge to Income in the Event of Release of Escrow Shares
In connection with the offering of units of Series A Common Stock and
Series A Redeemable Preferred Stock beginning in November, 1993 (the "Preferred
Stock Unit Offering"), 750,000 shares of Series B Common Stock were placed in
escrow of which 103,750 have been canceled effective as of July 5, 1994. In the
event the Company attains any of the earnings thresholds or the Company's Series
A Common Stock meets certain minimum purchase prices required for the release of
the Escrow Shares, such release will require the Company to recognize additional
compensation expense for shares held by officers, directors, consultants and
employees. Such charges could substantially increase the loss or reduce or
eliminate the Company's net income, if any, for financial reporting purposes for
the period in which the Escrow Shares are released or are probable of being
released. Although the amount of compensation expense recognized by the Company
6
<PAGE>
will not affect the Company's total stockholders' equity or its working capital,
it may have a depressive effect on the market price of the Company's securities.
If neither the required earnings or sale price are attained by December 31,
1998, the Escrow Shares as well as any dividends or other distributions made
with respect thereto, will be contributed to the capital of the Company.
Liquidity and Capital Resources
On October 16, 1995, the Company closed the Offering of 2,800,000
Units, each Unit consisting of one share of Series A Common Stock, one Class A
Warrant and one Class B Warrant, to D. H. Blair Investment Banking Corp. (the
"Underwriter") and on November 9, 1995 the Company closed the sale of an
additional 420,000 Units to the Underwriter pursuant to the Underwriter's over-
allotment option. The total net proceeds to the Company from the foregoing sales
was approximately $13,811,000. The proceeds were used for redemption of
preferred stock (approximately $1,294,000), repayment of notes and bank loans
(approximately $3,500,000), payment of accrued expenses and other indebtedness
(approximately $2,100,000) and approximately $2,300,000 was used to fund the
Evaluatory Period. The Company has utilized and will continue to utilize the
remainder of the proceeds, to fund operations until such time as it begins to
receive sufficient revenues from operations, if ever.
As of March 31, 1996, the Company had working capital of $3,114,009.
The Company has financed its operation to date almost exclusively through
private placements of securities and bank loans and the Offering, including
gross proceeds of $2,292,500 through the Preferred Stock Unit Offering in 1994,
$2,250,000 through a Bridge Note financing in 1994 and 1995, $1,086,000 through
bank loans and $16,100,000 through the Offering.
The Company's operating activities used net cash of $1,476,281 during
the three months ended March 31, 1996, primarily as a result of its net loss
from operations of $1,224,800. No cash was provided from financing activities
during the first quarter and investing activities used net cash of approximately
$200,000 for the purchase of property and equipment.
The Company has employment contracts with 6 executive officers and
employees and consulting agreements with 3 consultants, which provide for
aggregate salaries and consultants fees in 1996 in the amount of approximately
$900,000. The Company's lease agreement for its offices provides for monthly
payments of approximately $4,000.
The Company has entered into a settlement agreement with a former
director and officer of the Company dated October 12, 1993 regarding any claims
he had or may have had with respect to continued employment with the Company and
rights to acquire additional securities of the Company for $200,000. Payments
under such settlement agreement will be made from 25% of "Excess Cash Flow" (as
defined below) of the Company, if any. However, the entire remaining unpaid
balance of the $200,000 shall be due and payable regardless of the Company's
cash flow no later than December 31, 1997. Interest will accrue on such
obligation at the prime rate commencing January 1, 1996 and will be paid
quarterly thereafter. "Excess Cash Flow" is defined in the agreement as follows:
for any fiscal quarter (i) net income before taxes of the Company for such
fiscal quarter, plus (ii) amortization and other non-cash charges during such
fiscal quarter (to the extent deducted in computing net income), minus (iii)
capital expenditures made or accrued during such fiscal quarter. Dividends and
redemptions shall not be treated as expenses in determining the Company's net
income. In addition to the above, the settlement agreement provided for the
7
<PAGE>
purchase by the former director and officer from the Company of 11,240 shares of
the Company's Class B common stock at a price of $.01 per share and the payment
of consulting fees for services provided at the request of the Company.
The Company entered into an agreement with an advisor for assistance in
obtaining certain financing transactions. The Company has made certain payments
pursuant to the agreement and, although the Company has terminated such
agreement, it may be required to pay consideration, including warrants, in the
future to such advisor for any financing obtained by the Company from sources
within the scope of the agreement.
In connection with the underwriting agreement for the public offering,
the Company entered into an agreement with the Underwriter that provides for a
finder's fee to be paid to the Underwriter if it consummates a merger,
acquisition, joint venture, or other similar transaction with a party introduced
by the Underwriter during the five year period from the consummation of the
Offering. The fee is based on a percentage of the consideration paid in the
transaction ranging from 7% of the first $1,000,000 to 2 1/2% of any
consideration in excess of $9,000,000.
The Company has agreed not to solicit Warrant exercises other than
through the Underwriter. Upon any exercise of the Class A or Class B Warrants
after one year from the date of the Offering, the Company will pay the
Underwriter a fee of 5% of the aggregate exercise price, if (i) the market price
of the Company's Series A Common Stock on the date the Warrant is exercised is
greater than the then exercise price of the Warrants; (ii) the exercise of the
Warrant was solicited by a member of the National Association of Securities
Dealers, Inc.; (iii) the warrantholder designates in writing that the exercise
of the Warrant was solicited by a member of the National Association of
Securities Dealers, Inc. and designates in writing the broker-dealer to receive
compensation for such exercise; (iv) the Warrant is not held in a discretionary
account; (v) disclosure of compensation arrangements was made both at the time
of the Offering and at the time of exercise of the Warrants; and (vi) the
solicitation of exercise of the Warrant was not in violation of Rule 10b-6
promulgated under the Exchange Act.
In connection with the Preferred Stock Offering, D.H. Blair Investment
Banking Corp. was granted a five-year right of refusal to act as underwriter for
any public or private offerings by the Company or any holder of 5% or more of
the Company's Series B Common Stock (with certain exceptions).
Plan of Operation
The Company's strategy for the development of the Cafe USA network
consists of two phases. The first phase of the strategy was the Evaluatory
Period which was conducted in four major enclosed malls in the Chicago,
Philadelphia, New York and Greenville, SC, market areas in the fourth quarter of
1995. The purpose of the Evaluatory Period was to demonstrate the acceptance of
Cafe USA by the marketplace, including advertisers, mall operators and Food
Court visitors, and, assuming marketplace acceptance, determine the pricing
structure for future advertising. During the Evaluatory Period the Company
retrofited the sound systems and completed the installation of equipment in the
four malls, and broadcast programming for approximately two and a half months.
Fifteen advertisers participated in the Evaluatory Period at no cost to such
advertisers. Approximately $2,300,000 was expended for the Evaluatory Period.
8
<PAGE>
The Company engaged A.C. Nielsen to conduct market research of consumer
reactions and measure their recall during the Evaluatory Period. At the
conclusion of the Evaluatory Period and for approximately two months thereafter,
the Company evaluated the results of the 1995 Nielsen Survey and advertiser and
mall operator reaction. Based upon the preliminary results of the A.C. Nielsen
market research, the Company believes that sufficient support for the Cafe USA
concept exists in the marketplace to justify further expansion and proceed with
the second phase of its business plan, the expansion and installation of Cafe
USA in Food Courts throughout the country (the "Mall Buildout"). However, the
acceptance of the Cafe USA concept will ultimately be determined by the extent
to which advertisers are willing to commit expenditures for advertising on Cafe
USA. There are no assurances that advertisers will be willing to commit
significant expenditures for such advertising, in which event the Company will
lack sufficient revenues to sustain operations. Furthermore, if advertisers are
unwilling to commit material expenditures towards advertising on Cafe USA or
advertisers feedback otherwise indicates that the Cafe USA program in its
current format is not being accepted by the marketplace, the Company will
attempt to determine the reasons therefor, determine the modifications or
changes necessary to gain marketplace acceptance, and, if possible, implement
such modifications or changes. If the Company determines that it is unable to
modify or revise the Cafe USA program or delivery thereof in a manner that will
achieve marketplace acceptance, the Company may be forced to cease operations.
Furthermore, it is possible that required modifications or revisions to Cafe USA
would exhaust all of the Company's available capital prior to the Mall Buildout
phase.
Based upon its current plan to proceed with the Mall Buildout, the
Company is seeking to obtain commitments from advertisers for participation in
mall expansion and is negotiating with mall operators for installation and
operation of Cafe USA in additional malls. The Company installed Cafe USA in a
fifth mall in Las Vegas, Nevada, with broadcasting of programming having
commenced May 1, 1996. The Company has limited cash and cash equivalents
remaining for expansion after the Evaluatory Period (estimated to be
approximately $3,114,000 at April 30, 1996) and without additional financing, of
which there can be no assurance, the Company will not be able to pursue its
expansion plans. Further, the Company will only begin preparations for the Mall
Buildout if management has received additional funds sufficient to finance the
Mall Buildout and commitments from advertisers for a significant portion of
advertising time at reasonable commercial rates. If the Company determines to go
forward with the Mall Buildout, it is estimated that the preparations for
expansion into each additional mall would take approximately 90 days from the
receipt of mall commitment. It is not anticipated that revenues during the
initial phase of the Mall Buildout will be sufficient to cover the Company's
operating expenses and until it has achieved a presence in a significant number
of malls. The Mall Buildout is dependent upon the Company obtaining financing
for the lease or purchase and installation of the monitors and sound systems,
producing and developing programming and for marketing the Cafe USA Network to
advertisers and mall developers. Without additional financing, it is estimated
that the proceeds of the Offering will be sufficient to fund operations in five
malls only through the fourth quarter of fiscal 1996. The Company is negotiating
with potential suppliers of the equipment and programming and others to provide
such financing. There is no assurance that the financing will be available. If a
supplier of the equipment does not provide the financing, and if the Company is
not able to obtain alternative financing, the Company will be unable to pursue
its plan of operations and may be forced to cease business.
On April 16, 1996, the Company entered into a two-year agreement (the
"Agreement") with Turner Private Network, Inc. ("Turner") pursuant to which
9
<PAGE>
Turner will be the exclusive provider of programming to the Company for the
Company's Cafe USA Network ("Cafe USA") and Turner Broadcasting Sales, Inc.
("Turner Sales") will act as exclusive advertising sales agent for Cafe USA for
two years. The Agreement provides for the execution of definitive programming
and sales agreements by May 15, 1996, which date may be extended by mutual
consent. Under the Agreement the Company will pay $2,500,000 for the first 52
weekly programs produced during the initial 12 months of the Agreement, of which
$1,250,000 shall be paid by the issuance of 250,000 shares of Series A Common
Stock of the Company with the balance of first year payment ($1,250,000) to be
paid in the form of a promissory note payable to Turner upon maturity of the
later to occur of (i) March 31, 1997 and (ii) completion and timely delivery of
52 weekly programs produced by Turner. The value of the promissory note will be
charged to operations over the first year of the Agreement and operations will
be charged for the fair value of the shares when they are earned by Turner. The
second year of programming provides for payment of up to $3,500,000 in cash or
other consideration to be determined to be paid in monthly installments. Payment
for advertising sales will be on a commission basis to be set forth in a sales
agreement to be entered into between the parties, which provides for commissions
of 10% of Net Ad Revenues (as defined in the Agreement) of Cafe USA for the
first twelve months and up to 15% of Net Ad Revenues for the second year.
Production of programming for the first year will start on a gradual basis until
June, 1996, when full production of new weekly programs for broadcast into five
malls will begin. The Company is currently seeking additional financing and
advertiser commitment required to commence expansion of its Cafe USA Network.
Pursuant to the Agreement, the Company will nominate one member of
Turner Management to the Company's Board of Directors and has decided to add an
additional member of Turner Management to the Company's Board.
The Company and Capital Cities/ABC New Media Sales ("Capital
Cities/ABC") have preliminarily agreed to suspend a Representation Agreement
between the parties pursuant to which Capital Cities/ABC provided sales
representation services to the Company. The Company will pay Capital Cities/ABC
an aggregate of $100,000 on or before October 1, 1996 and by October 1, 1997
will either resume such agreement or pay $100,000 to terminate such agreement.
As March 31, 1996 the Company has $57,500 accrued in connection with this
agreement.
10
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Securities Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11
(b) No reports on Form 8-K were filed during the quarter for
which this report was filed. The Company filed a report on
Form 8-K with the Securities and Exchange on April 29, 1996,
relating to the execution of the Agreement with Turner.
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Food Court Entertainment Network, Inc.
--------------------------------------
(Registrant)
May 13, 1996 By: /s/ Stephen G. Bowen
------------ -----------------------------------
(Date) Stephen G. Bowen, President
May 13, 1996 By: /s/ Darren M. Sardoff
------------ -----------------------------------
(Date) Darren M. Sardoff, Chief Financial Officer
12
<PAGE>
EXHIBIT INDEX
Exhibit Page
Number Document Number
- - ------ -------- ------
11 Schedule of Computation of 1
Net Loss Per Share
<PAGE>
EXHIBIT 11
FOOD COURT ENTERTAINMENT NETWORK, INC.
COMPUTATION OF NET LOSS PER SHARE OF COMMON STOCK
Three months ended March 31, 1995
Net (loss) ...................................................... $ (684,339)
Adjustments to net (loss)
Reduction of interest on bridge loans ................... 35,000
Amortization of deferred financing costs ................ 45,500
Amortization of debt discount ........................... 35,000
Reduction of interest on line of credit ................. 7,012
Interest on hypothetical investment ..................... 6,473
Dividends on Preferred Stock ............................ 22,925
Preferred stock discount ................................ 6,941
-----------
$ (525,488)
-----------
Weighted average shares outstanding (net of 20,135 in
treasury, 10,135 of which are in escrow) ................ 1,699,240
Add: Net shares from exercise of options/warrants:
Assumed exercise of options ............................. 1,699,240
Assumed repurchase of shares ............................ 339,848
-----------
1,359,392
Less: Escrow shares (net of 10,135 in escrow
excluded above) ......................................... (636,115)
Weighted average number of shares ............................... 2,422,517
-----------
NET LOSS PER SHARE OF COMMON STOCK .............................. ($0.22)
-----------
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000940800
<NAME> FOOD COURT ENTERTAINMENT NETWORK
<MULTIPLIER> 1
<CURRENCY> U.S. $
<S> <C>
<PERIOD-TYPE> 3-MOS
<EXCHANGE-RATE> 1
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,515,611
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
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0
0
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</TABLE>
