U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For quarterly period ended August 28, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ________ to _________
Commission file number 0-21634
Metro Global Media, Inc.
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(Exact name of small business issuer as specified in its charter)
Delaware 65-0025871
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1060 Park Avenue, Cranston, Rhode Island 02910
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(Address of principal executive offices)
(401) 942-7876
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(Issuer's telephone number)
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(Former name, former address and former fiscal year, if changed since last year)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 6,894,529 at September 30, 1999
PART I - FINANCIAL INFORMATION
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Item 1. Consolidated Financial Statements
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Balance Sheet F-1
Statements of Income F-3
Statements of Cash Flows F-4
Notes to Financial Statements F-7 to F-13
Item 2. Management's Discussion and Analysis or Plan of Operation
- -----------------------------------------------------------------
Results of Continuing Operations for the three months ended August 28, 1999
versus three months ended August 29, 1998.
Metro Global Media, Inc.'s ("Metro Global") revenues from continuing
operations increased $1,980,838 to $7,064,170 for the three months ended August
28, 1999. This represents a 39% increase from revenues of $5,083,332 for the
three months ended August 29, 1998. Revenues consist principally of sales of
prerecorded videocassettes, magazines, electronic software products and related
items. The increase in revenue is primarily attributable to the increased sales
of videos and DVDs of approximately $1,000,000, an increase in magazine sales of
approximately $500,000, an increase in sales by Metro International of
approximately $100,000 and an increase in cable revenues of approximately
$210,000 over the same period of the prior year.
Costs of revenues (including amortization of film costs) related to
continuing operations for the three month period ended August 28, 1999 increased
to $4,678,546 from $3,531,130 for the corresponding period in the prior year.
Costs of revenues as a percentage of revenues in the first quarter of fiscal
1999 were 66% as compared to 69% in the first quarter of fiscal 1998. The
improvement in the gross margin related to continuing operations is primarily
due to the increase in the revenues from the sale of cable rights, with
relatively smaller associated costs.
Selling, general and administrative expenses related to continuing
operations for the three months ended August 28, 1999 increased 37% to
$2,560,825 from $1,867,936 for the three months ended August 29, 1998. Selling,
general, and administrative expenses, as a percentage of revenues, remained
constant for the two periods at 36%. The primary reasons for the increase in
selling, general and administrative expenses are an increase in payroll,
increase in consulting expenses, and an increase in Internet development costs.
Loss from continuing operations for the three month period ended August 28,
1999 was $784,400 as compared to a loss from continuing operations of $381,823
for the corresponding period in the prior year. The primary reason for the
increase in the loss is due to the increase in interest expense of approximately
$481,000 due to increased borrowings. Net loss for the quarter ended August 28,
1999 was $716,965 as compared to a net loss of $177,459 for the quarter ended
August 29, 1998, resulting in a loss per share of $0.11 for the quarter ended
August 28, 1999, as compared to a loss per share of $0.07 for the quarter ended
August 29, 1998.
Liquidity and Capital Resources at August 28, 1999
Cash amounted to $761,634 at quarter-end. Net cash provided by operating
activities amounted to $1,557,503 for the three months ended August 28, 1999,
whereas net cash of $125,940 was used by operations for the same period in the
prior fiscal year. The primary uses of cash for the quarter ended August 28,
1999 consisted of: (1) net payments on line of credit of $142,254, (2)
investments in motion pictures and other films of $643,364, (3)payments on
capital leases of $88,007, and (4) purchases of property and equipment of
$96,532.
2
The net increase in accounts receivable of $1,393,039 was primarily due to
the increase of sales for the quarter. Inventory increased $263,672 due to the
increase in DVD production. Accounts payable and accrued expenses increased
$2,652,421 due to increased purchasing and an increase in accrued interest
expense.
On July 1, 1998, Metro Global entered into a 12% convertible debenture
totaling $200,000 with a related party. The note was due on July 1, 1999, in
either cash or Common Stock, at a conversion rate of $2.25 per share. Metro
Global recorded $60,248 of interest expense relating to the embedded beneficial
conversion feature. Proceeds from the debenture were used for working capital.
On July 1, 1999, the debenture was extended until July 1, 2001. In conjunction
with the extension, warrants were granted to purchase 50,000 shares of Metro
Global's Common Stock for $2.58 per share. Metro Global recorded interest
expense of $52,000 in connection with the issuance of the warrants in the
quarter ended August 28, 1999.
On August 1, 1998, Metro Global entered into notes payable totaling
$1,000,000 with related parties. The notes, which bear interest at 8%, were due
August 1, 1999. Proceeds from the notes were used in the acquisition of Fanzine
International, Inc. ("Fanzine"). In October 1998, the notes were reduced by
$600,000 for the exercise of warrants. On August 1, 1999, the notes were
extended for one year. In consideration of the extension, the interest rate
increased from 8% to 10% and warrants were issued to purchase up to 115,000
shares of Common Stock at a price of $2.58, exercisable for a term of five
years. Metro Global recognized interest expense of $100,050 in connection with
the issuance of the warrants in the quarter ended August 28, 1999.
On July 31, 1998, Metro Global entered into an 8% convertible debenture
with an unrelated party in the amount of $1,000,000, which was used in the
purchase of Fanzine. In connection with this transaction, Metro Global issued a
warrant for 75,000 shares at a price of $4.11 and a warrant for 25,000 shares at
a price of $3.29, both exercisable over two years. Metro Global recorded a
discount on the debenture of $157,700 for the value of the warrants. Metro
Global amortized $19,713 and $6,571 of the discount to interest expense during
the three months ended August 28, 1999 and August 29, 1998, respectively.
The $1,000,000 debenture was to mature on July 31, 2000. Interest is
payable on a quarterly basis. The holder of the debenture is entitled to
convert, after 120 days of the agreement, the principal value into Metro
Global's Common Stock at a discounted market price as is defined in the
agreement. Metro Global has recorded $35,461 of interest expense relating to the
embedded beneficial conversion feature in the quarter ended August 29, 1998.
Metro Global is in technical default under the terms of the debenture due to the
suspension of trading of its Common Stock on September 14, 1999. During the
quarter ended August 28, 1999, $60,000 of convertible debentures plus accrued
interest and penalties were converted into 43,962 restricted shares of Metro
Global's Common Stock.
Beginning in April 1998, Metro offered 5% convertible Preferred Shares
pursuant to regulation S of the U.S. Securities Act of 1933. Metro Global
received approximately $846,500 and $1,317,000 in net proceeds from the offering
in fiscal 1998 and 1999, respectively. Proceeds from such agreement were used to
fund working capital.
The Series A Shares were convertible at a rate of 100 shares plus accrued
dividends per week at 80% of the 15 day average closing bid price. These shares
were subject to a twenty-four month mandatory conversion feature. Dividends are
payable in Common Stock and Metro Global recognized dividends of $146,513 during
the quarter ended August 29, 1998 for the embedded beneficial conversion
feature. During the quarter ended August 29, 1998, 700 shares of the Series A
shares and accrued dividends were converted into 280,059 shares of Metro
Global's Common Stock.
3
In addition to the Series A Shares, Metro Global issued 400,000 warrants to
purchase Metro Global Common Stock at $1.50 per share commencing April 20, 1998
exercisable over 5 years. Metro Global recognized a dividend of $1,212,000 for
the year ended May 30, 1998 for the beneficial conversion feature. In October
1998, all 400,000 warrants were exercised.
On October 28, 1998, Metro Global entered into a note payable with a third
party for $1,100,000. The note, which bears no interest, is due in quarterly
installments of $275,000 commencing December 31, 1998. In consideration of the
loan and part of an investment banking consultant agreement, Metro Global issued
the lender 150,000 restricted shares of Metro Global's Common Stock. Metro
Global used $507,500 of the proceeds to repurchase 198,242 shares of its
outstanding Common Stock from Metro Plus, a company owned by Kenneth Guarino.
For the year ended May 29, 1999, Metro Global made one payment of $275,000. In
September 1999, Metro Global and lender agreed to an extension of the note.
Under the terms of the extension, payments totaling $550,000 are due by
September 30, 1999 and the final payment of $275,000 is due on December 31,
1999. If all payments are not made by January 1, 2000, Metro Global must issue
the lender 100,000 shares of restricted stock as a penalty. In October 1999,
Metro Global made a $275,000 payment.
On December 9, 1998, Metro Global entered into a six-month term loan
agreement with a third party. Under the terms of the agreement, Metro Global
borrowed $3,000,000 at an interest rate of 10% per year. The proceeds were used
toward the acquisition of Fanzine and to fund working capital. In connection
with this transaction, Metro Global issued warrants to purchase up to 350,000
shares of Common Stock at a price of $3.00, expiring on December 31, 2001. Metro
Global recorded interest expense of $577,000 for the valuation of the warrants.
Additionally, Metro Global issued 100,000 shares of Common Stock and recorded
$187,500 of interest expense.
In September 1999, Metro Global and lender agreed to an extension, under
which Metro Global must pay $1.3 million upon closing financing with another
financing company. The balance of the note of $1,800,000, which includes
$100,000 penalty, will be exchanged for an 8% convertible debenture. The
debenture is convertible at a rate of not more than 10% of the total debenture
per week, at a price of 80% of the average closing bids for the five days
preceding the conversion. In consideration of the extension, Metro Global will
issue warrants to purchase up to 100,000 shares of Common Stock at a price of
$1.75 per share with a two-year expiration.
On June 30, 1999, Metro Global entered into a one-year note payable at an
interest rate of 10% with a related party for $30,000. Proceeds from the note
were used for working capital.
During June 1997, Metro, Inc. ("Metro") entered into a line of credit
agreement with Finova Capital. Under the agreement, Metro may borrow up to 75%
of assigned accounts receivable less than 90 days old, up to a maximum of
$1,000,000. The balance due under the line of credit bears interest at the prime
rate plus 5% per annum plus a collateral management fee. The outstanding balance
under the line is secured by accounts receivable of Metro and guaranties of
Metro Global and certain officers/shareholders. The line of credit expired
during June 1999, but includes an option for an additional year. As of August
28, 1999, the balance on the line of credit was $800,044. On June 30, 1999,
Finova did not renew the agreement.
In October 1999, Metro Global signed a $4,000,000 Loan and Security
Agreement with Reservoir Capital Corporation. Pursuant to the terms, Metro may
borrow up to 70% of accounts receivable less than ninety day old, up to a
maximum of $3,000,000. The accounts receivable borrowing base excludes foreign
receivables and receivables where more than 50% of the balance is over ninety
days old. The borrowings on Capital Video Corporation ("CVC") are limited to the
lesser of 30% of total accounts receivable or $1,600,000. Additionally, Metro,
Inc. can borrow 40% of inventory, up to a maximum of $1,000,000.
4
Borrowings under this loan bear interest at prime rate plus 3.5% per annum.
Additionally, Metro, Inc. must pay a service fee of .35% per month on the
average daily loan balance. Metro, Inc. must pay an unused fee of .25% on the
amount of the borrowings under $2,000,000. The loan will be secured by the
assets of Metro, Inc. The CVC accounts receivables will be guaranteed by the
sole shareholder of CVC. Additionally, CVC will execute a put on the inventory
of Metro in case of default
Of Metro's total accounts receivable at August 28, 1999, $2,723,875 is owed
by CVC, a chain of retail stores, which is wholly owned by Kenneth Guarino, a
principal shareholder and the interim Chief Executive Officer of Metro Global
and for which Daniel Geribo, Metro's director, serves as President and sole
director. Because of the amount of this receivable and the concentration of
business with CVC, this receivable is monitored very closely. All amounts due
from CVC are predominantly maintained within 60 to 90 day terms. Accordingly, no
allowance for related party receivables and no related party bad debt expense
has been recorded in Metro Global's financial statements.
For the quarter ended August 28, 1999, Metro invested $643,364 in new
feature films and video. Financing for these activities has been and will
continue to be generated through operating cash flows as well as funds received
from its line of credit.
Capital Expenditures
Capital expenditures in the first quarter ended August 28, 1999 amounted to
$96,532 as compared to $179,106 for the quarter ended August 29, 1998. Metro
Global incurred capital lease obligations of $411,799 for the quarter ended
August 28, 1999 primarily for computer equipment, duplicating and editing
equipment. Metro Global currently has $400,000 remaining on a lease line
available for its use, which management believes is sufficient.
Management believes that funds provided by operations, existing and new
line of credit, are adequate to meet the anticipated short-term and long-term
capital needs. Management believes that inflation has not had a material effect
on its operations.
Forward Looking Statements
This Form 10-QSB Report contains "forward-looking statements," including
statements in "Management's Discussion and Analysis of Financial Condition and
Results of Operations," as to expectations, beliefs, plans, objectives and
future financial performance, and assumptions underlying or concerning the
foregoing. Such forward-looking statements involve risks and uncertainties,
which could cause actual results or outcomes to differ materially from those
expressed in the forward-looking statements. One such factor that could cause
actual results or outcomes to differ materially from those discussed in the
forward-looking statements would be government actions or initiatives, such as
attempts to limit or otherwise regulate the sale of adult-oriented materials,
including print, video and online materials.
Year 2000 Compliance
As the year 2000 approaches, an issue has emerged regarding how existing
application software programs and operating systems can accommodate this date
value. Failure to adequately address this issue could have potentially serious
repercussions. Metro Global has begun to identify, evaluate and implement
changes to its existing computerized business systems. In addition, Metro Global
is communicating with its vendors and other service providers to ensure that
their products and business systems will be Year 2000 compliant. If
5
modifications and conversions by Metro Global and those it conducts business
with were not made in a timely manner, the Year 2000 problem could have a
material adverse affect on Metro Global's business, financial condition and
results of operations. Most of the systems of Metro Global have already been
identified as Year 2000 compliant, including most financial applications.
Although Metro Global is still quantifying the impact, Metro Global does not
expect to expend more than $50,000 to $100,000. These costs are being expensed
as incurred.
As a contingency plan for the most reasonably likely worst case scenario,
Metro Global has addressed all major elements related to this issue. Metro
Global believes its technology systems will be ready for the Year 2000, but
Metro Global may experience isolated incidences of non-compliance. Metro Global
plans to allocate internal resources and retain consultants and vendor
representatives to be ready to take action if these events occur. Although Metro
Global values its established relationships with key vendors and other service
providers, if certain vendors are unable to perform on a timely basis due to
their own Year 2000 issues, Metro Global believes that substitute products or
services are obtainable from other vendors. Metro Global also recognizes the
risks if other key suppliers in utilities, communications, transportation,
banking and government are not ready for the Year 2000, and is approaching this
issue in the same manner.
Restatement
Metro Global has restated the financial statements for the three months
ended August 29, 1998. The financial statements were restated to record
dividends on the embedded beneficial conversion feature of the Series A
Preferred Stock, interest on the embedded beneficial conversion feature on
convertible debentures, and changes in estimates. The effect of these
adjustments was a decrease in net income of $577,508 to a net loss of $177,459
and a decrease in earnings of $0.12 per share to a loss of $0.07 per share.
Licensing Agreement
On July 21, 1999, Metro Global entered into an agreement with certain
subsidiaries of New Frontier Media, Inc. ("New Frontier"), a publicly traded
company involved in distribution of adult entertainment via cable television and
the internet. New Frontier will receive access to Metro Global's 3,200-plus
library of videos and pictures for internet and cable television exhibition for
a period of seven years. In consideration, Metro Global received 500,000
restricted shares of New Frontier's Common Stock plus warrants to purchase
100,000 additional shares of New Frontiers Common Stock per year for five years
at market price, as defined in the agreement. Metro Global recorded the value of
the Common Stock and warrants as an investment and deferred revenue in the
amount of $4,787,474. The deferred revenue is being amortized over seven years.
Metro Global recognized $56,994 of income from the relationship with New
Frontier during the three months ended August 28, 1999.
As part of the agreement, a subsidiary of New Frontier will provide Metro
Global with advertising on its websites, as well as technical support for Metro
Global's websites, including credit card processing. In consideration, Metro
Global issued New Frontier 250,000 restricted shares of its Common Stock and
warrants to purchase 50,000 shares of Common Stock per year for five years at
market price, as defined in the agreement. Metro Global recorded the value of
the Common Stock and warrants at $716,752. The deferred expense is being
amortized over five years. The unamortized portion of the deferred expense is
recorded as a reduction of additional paid-in-capital in the accompanying
financial statements.
Subsequent Events
On September 29, 1999, Metro Global signed a Rescission and Purchase
Agreement with the selling shareholders of Fanzine and a company controlled by
them. In consideration of this sale of Fanzine's stock, Metro Global will
receive payments totaling $4,500,000 and the 1,000,000 contingent shares of
Common Stock originally given to the selling shareholders. Payment of the
$4,500,000 is secured by the assets of Fanzine and partly
6
secured by the personal guarantees of the former Fanzine shareholders. Metro
Global will receive payments of $1,000,000 by October 31, 1999, $1,000,000 by
November 30, 1999, $1,000,000 by May 31, 2000 and $1,500,000 by August 31, 2000.
The operations of Fanzine have been classified as discontinued operations in the
accompanying financial statements.
On October 5, 1999, Metro Global signed a working capital line of credit
agreement with Reservoir Capital under essentially the same terms as is in the
commitment letter described in note 6 of the accompanying financial statements.
Actual funding is expected to take place shortly. Proceeds of the loan will be
utilized for a partial pay down of debt currently in default. In the event that
proceeds are not received from this loan, Metro Global will remain in default
under its debt obligations.
7
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AUGUST 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
Assets
------
Current Assets
- --------------
Cash $ 761,634
Accounts receivable, less allowance for doubtful
accounts of $153,674 6,480,204
Accounts receivable, related party 2,723,875
Inventory 4,367,752
Recoverable income tax 339,000
Prepaid expenses and other current assets 938,594
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Total Current Assets 15,611,059
- -------------------- ----------
Motion pictures and other films at cost, less accumulated
amortization of $9,269,985 4,961,539
Property and equipment at cost, less accumulated
depreciation of $2,355,752 2,374,764
Goodwill, net of accumulated
amortization of $473,293 3,695,567
Investment in securities 4,787,474
Other assets 334,195
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Total Assets $31,764,598
- ------------ ===========
See Notes to Consolidated Financial Statements
F-1
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AUGUST 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities
- -------------------
Current portion of capital lease obligations $ 264,628
Short-term borrowings 4,625,044
Related party convertible debentures 784,000
Notes payable to related parties 474,000
Convertible debentures 867,720
Accounts payable and accrued expenses 10,343,036
Income taxes payable 513,943
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Total current liabilities 17,872,371
- ------------------------- ----------
Deferred Revenue 4,730,480
Capital lease obligations, less current portion 648,536
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Total liabilities 23,251,387
- ----------------- ----------
Minority interest 61,600
Commitments and Contingencies
Shareholders' equity
- --------------------
Preferred Stock, no par value; authorized 2,000,000 shares;
issued and outstanding, none
Common stock, $.0001 par value; authorized 10,000,000
shares; issued 6,842,771 shares and outstanding,
6,644,529 shares 684
Additional paid in capital 15,723,336
Accumulated deficit (6,476,474)
Accumulated other comprehensive loss - foreign exchange (5,730)
----------
9,241,816
Unearned compensation (282,705)
Less cost of Treasury Stock (198,242 common shares) (507,500)
--------
Total shareholders' equity 8,451,611
- -------------------------- ---------
Total liabilities and shareholders' equity $31,764,598
- ------------------------------------------ ===========
See Notes to Consolidated Financial Statements
F-2
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED AUGUST 28, 1999 AND AUGUST 29, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
1998
1999 as restated
---- -----------
Revenues $7,064,170 $5,083,332
Cost of revenues, including amortization of
motion pictures and other films of
$535,352 and $368,478, respectively 4,678,546 3,531,130
--------- ---------
2,385,624 1,552,202
Selling, general and administrative expenses 2,560,825 1,867,936
--------- ---------
(175,201) (315,734)
-------- --------
Other income and (expenses)
- ---------------------------
Interest expense (633,602) (182,683)
Royalty income 32,536 32,536
Miscellaneous income(expense) -0- 2,501
Minority interest (8,133) (12,365)
------ -------
(609,199) (160,011)
-------- --------
Loss from continuing operations (784,400) (475,745)
Provision (benefit) for income taxes (-0-) (93,922)
---- -------
Loss from continuing operations (784,400) (381,823)
Income from discontinued operations (net of tax) 67,435 204,364
------ -------
Net loss $ (716,965) $ (177,459)
========== ==========
Loss Per Share:
Loss from continuing operations:
Basic and Diluted $ (0.12) $ (0.11)
Income from discontinued operations:
Basic and Diluted $0.01 $0.04
Net loss:
Basic and Diluted $ (0.11) $ (0.07)
Weighted average number of shares:
Basic and Diluted 6,448,889 4,911,904
See Notes to Consolidated Financial Statements
F-3
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 28, 1999 AND AUGUST 29, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
1998
1999 as restated
---- -----------
Cash flows from operating activities:
Net loss $(716,965) $(177,459)
--------- ---------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation Expense 160,841 106,804
Amortization of motion pictures and other films 535,352 368,478
Amortization of deferred rent (3,503) (3,503)
Amortization of unearned compensation 77,512 31,250
Amortization of goodwill 109,222 33,333
Amortization of deferred revenue (56,944) -0-
Amortization of deferred expense 11,946 -0-
Amortization of discount on debenture 19,712 6,571
Accrued interest added to note payable principal 68,000 -0-
Discount on issuance of convertible debenture -0- (157,700)
Allowance for doubtful accounts 113,426 30,000
Embedded interest on convertible debentures -0- 95,709
Common Stock issued for consulting services 12,815 449,833
Common Stock issued for compensation -0- 6,850
Issuance of warrants 175,844 -0-
Minority interest 8,133 12,365
Foreign exchange 1,035 669
(Increase) decrease in assets:
Accounts receivable (1,393,039) (1,237,665)
Inventory (263,672) (404,113)
Prepaid expenses and other current assets 56,832 (233,264)
Other assets (66,639) 21,880
Increase in liabilities:
Accounts payable and accrued expenses 2,652,421 770,096
Income taxes payable 55,174 153,926
------ -------
Total adjustments 2,274,468 51,519
- ----------------- --------- ------
Net cash provided by (used in) operating activities $1,557,503 $(125,940)
- --------------------------------------------------- ========== =========
See Notes to Consolidated Financial Statements
F-4
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE THREE MONTHS ENDED AUGUST 28, 1999 AND AUGUST 29, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
1998
1999 as restated
---- -----------
Cash flows from investing activities:
Acquisition of Fanzine $ (-0-) $(2,000,000)
Acquisition costs (-0-) (99,634)
Investments in motion pictures and other films (643,364) (856,627)
Purchase of property and equipment (96,532) (179,106)
------- --------
Net cash used in investing activities (739,896) (3,135,367)
- ------------------------------------- -------- ----------
Cash flows from financing activities:
Proceeds from the issuance of Series A
convertible Preferred Stock -0- $ 1,317,000
Proceeds from issuance of Common Stock -0- 8,734
Proceeds from issuance of convertible debentures -0- 1,000,000
Net proceeds from (payments on) line of credit (142,254) 18,166
Proceeds on notes payable 30,000 1,200,000
Principal payments on capital lease obligations (88,007) (73,600)
Contribution from joint venture partner -0- 30,000
--- ------
Net cash provided by (used in) financing activities (200,261) 3,500,300
- --------------------------------------------------- --------- ---------
Net increase in cash 617,346 238,993
Cash, beginning of period 144,288 184,995
Cash, end of period $ 761,634 $ 423,988
========= =========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 66,401 $ 49,111
======== ========
Income taxes $ -0- $ -0-
======== ========
See Notes to Consolidated Financial Statements
F-5
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE THREE MONTHS ENDED AUGUST 28, 1999 AND AUGUST 29, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
Supplemental schedule of non-cash investing and financing activities:
During the quarter ended August 29, 1998, a payable of $300,000 was
converted into 250,000 restricted shares of Metro Global's Common Stock by a
related party.
During the quarter ended August 29, 1998, 700 shares of Series A Preferred
Stock plus accrued dividends of $5,958 were converted into 280,059 shares of
Metro Global's Common Stock. Metro Global recognized total dividends of $146,513
relating to the beneficial conversion feature of this stock during the three
months ended August 28, 1998.
Capital lease obligations of $411,799 and $61,740 were incurred during the
three months ended August 28, 1999 and August 29, 1998, respectively, when Metro
Global entered into capitalized leases for office equipment and machinery and
equipment.
On July 21, 1999, Metro Global entered into a seven year Licensing
Agreement with New Frontier Media, Inc. Metro Global received 500,000 restricted
shares of New Frontier Common Stock plus warrants to purchase 100,000 shares of
Common Stock per year for five years. Metro Global valued the Common Stock and
warrants at $4,787,474. The deferred revenue is being amortized over seven
years.
As part of the Licensing Agreement, in consideration of certain services,
Metro Global issued New Frontier 250,000 restricted shares of its Common Stock
and warrants to purchase 50,000 shares of Common Stock per year for five years.
Metro Global valued the Common Stock and warrants at $716,752. The deferred
expense is being amortized over five years.
During the three months ended August 28, 1999, $60,000 of convertible
debentures and accrued interest and penalties of $17,630 were converted into
43,962 restricted shares of Common Stock.
See notes to consolidated financial statements.
F-6
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED AUGUST 28, 1999 AND AUGUST 29, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
1. Summary of Significant Accounting Policies and Plan of Operation
Consolidation
The consolidated financial statements include the accounts of Metro Global
and its majority owned and controlled subsidiaries. All intercompany balances
and transactions have been eliminated in consolidation.
Financial Statements
The interim financial statements are prepared pursuant to the requirements
for reporting on Form 10-QSB. The interim financial information included herein
is unaudited; however, such information reflects all adjustments (consisting
solely of normal recurring adjustments, except for note 8) that are, in the
opinion of management, necessary to a fair presentation of the financial
position, results of operations, and changes in financial position for the
interim periods. The interim financial statements and notes thereto should be
read in conjunction with the financial statements and notes included in Metro
Global's latest annual report. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. The current
period results of operations are not necessarily indicative of results, which
ultimately will be reported for the full year ending May 27, 2000.
Plan of Operation
As described in the following footnotes, Metro Global is in default under
certain debt agreements. Metro Global has arranged for alternative financing,
however, funding has not yet occurred. Proceeds of the loan will be utilized to
cure the defaulted debt. In the event that proceeds are not received from this
loan, Metro Global will remain in default under its debt obligations.
As described in Note 3, Metro Global has sold Fanzine, its publishing
segment, and expects to utilize a substantial portion of the proceeds to retire
debt.
In addition, on September 14, 1999, the NASDAQ Stock Market halted the
trading of Metro Global's Common Stock due to Metro Global's late filing of its
fiscal 1999 Annual Report on Form 10-KSB.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates based on
management's knowledge and experience. Due to their prospective nature, it is
reasonable to expect actual results to differ from those estimates.
Reclassification
Certain items in the financial statements for the quarter ended August 29,
1998 have been reclassified to conform with the current presentation.
F-7
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED AUGUST 28, 1999 AND AUGUST 29, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
2. Dispositions
Fanzine International, Inc.
On August 3, 1998, Metro Global acquired 100% of the stock of Fanzine for a
cash purchase price of $4,000,000, plus contingent consideration. Fanzine, which
began operations on August 1, 1997, publishes event driven, mainstream magazines
translated into seven languages and distributed worldwide. The contingent
consideration consisted of 1,000,000 restricted shares of Metro Global's Common
Stock with put option rights at $8.00 per share to be exercised by the selling
shareholder's during the second year on a quarterly basis, if certain minimum
earnings, as defined, are met. During Fanzine's first year of operations, Metro
Global had the right to call the shares at the greater of $6.00 per share or 75%
of the market price. Metro Global did not call the shares. The acquisition
agreement also provided for a reduction in purchase price if Fanzine's results
of operations did not meet certain minimum earnings.
The acquisition was accounted for as a purchase. The excess of the purchase
price over the fair market values of net assets acquired, which included, among
others, licenses, trademarks, and distribution rights, was allocated to goodwill
and amortized over ten years. The cash portion of $4,000,000 was financed by a
long-term convertible debenture and other short-term borrowings. On September
29, 1999, Metro Global sold Fanzine's stock back to the selling shareholders
(see note 3).
3. Discontinued Operations
In September 1999, Metro Global adopted a plan of disposition for Fanzine,
which was sold on September 29, 1999 for approximately $4,500,000 in notes
payable and the return of 1,000,000 shares of Metro Global's Common Stock. The
following table is a summary of the results of discontinued operations for the
three months ended August 28, 1999 and one month ended August 29, 1998,
respectively:
1999 1998
---- ----
Revenues $ 4,621,504 $ 1,437,237
Cost of revenues 4,030,434 843,428
--------- -------
591,070 593,809
Other expenses 468,461 301,960
------- -------
Income before income taxes 122,609 291,849
Income taxes (55,174) (87,485)
------- -------
Income from discontinued operations $ 67,435 $204,364
======== ========
Income from discontinued operations before income taxes does not include an
allocation of corporate interest expense or amortization of goodwill. At August
28, 1999, Fanzine has current assets of $3,660,072, other assets of $167,067 and
current liabilities of $3,609,503.
F-8
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED AUGUST 28, 1999 AND AUGUST 29, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
4. Debt
On August 1, 1998, Metro Global entered into notes payable totaling
$1,000,000 with related parties. The notes, which bear interest at 8%, were due
August 1, 1999. Proceeds from the notes were used in the acquisition of Fanzine.
In October 1998, $600,000 of debt was converted into 400,000 shares of Metro
Global's Common Stock. On August 1, 1999, the balance of the notes were extended
for one year. In consideration of the extension, the interest rate increased
from 8% to 10% and warrants were issued to purchase up to 115,000 shares of
Common Stock at a price of $2.58, exercisable for a term of five years. Metro
Global recorded interest expense of $100,050 in connection with the issuance of
the warrants.
On October 28, 1998, Metro Global entered into a note payable with an
unrelated third party for $1,100,000. The note, which bears no interest, was due
in quarterly installments of $275,000 commencing December 31, 1998. In
consideration of the loan and part of an investment banking consultant
agreement, Metro Global issued the lender 150,000 restricted shares of Metro
Global's Common Stock. Metro Global recorded interest expense of $243,412 in
1999 in connection with the issuance of the restricted stock. Metro Global used
$507,500 of the proceeds to repurchase 198,242 shares of its outstanding Common
Stock from Metro Plus, a company partially owned by Kenneth Guarino, Acting
Chief Executive Officer of Metro Global and a significant shareholder. For the
year ended May 29, 1999, Metro Global made one payment of $275,000. As a result,
default interest at 11% per annum has been accrued on this note. In September
1999, Metro Global and the lender agreed to an extension of the note. Under the
terms of the extension, payments totaling $550,000 were due by September 30,
1999 and the final payment of $275,000 is due on December 31, 1999. The
September 30, 1999 payments are currently in default. Metro Global made a
payment of $275,000 in October 1999. If all payments are not made by January 1,
2000, Metro Global must issue the lender 100,000 shares of restricted stock as a
penalty.
On December 9, 1998, Metro Global entered into a six-month term loan
agreement with an unrelated third party. Under the terms of the agreement, Metro
Global borrowed $3,000,000 at an interest rate of 10% per year. The proceeds
were used toward the acquisition of Fanzine and to fund working capital. In
connection with this transaction, Metro Global issued warrants to purchase up to
350,000 shares of Common Stock at a price of $3.00, expiring on December 31,
2001. Metro Global recorded interest expense of $577,000 in connection with the
issuance of the warrants during 1999. Additionally, Metro Global issued 100,000
shares of Common Stock and recorded $187,500 of interest expense relating to the
issuance of these shares during 1999.
In September 1999, Metro Global and the lender agreed to an extension.
Under the terms of the extension, Metro Global must pay $1.3 million upon the
closing of the prospective financing with Reservoir Capital a new unrelated
third party lender. The balance of the note of $1,800,000, which includes a
$100,000 penalty, will be exchanged for an 8% convertible debenture. The
debenture is convertible at a rate of not more than 10% of the total debenture
per week, at a price of 80% of the average closing bids for the five days
preceding the conversion. In consideration of the extension, Metro Global will
issue warrants to purchase up to 100,000 shares of Common Stock at a price of
$1.75 per share with a two-year expiration. In the event that funding is not
received on the prospective financing with Reservoir Capital, Metro Global will
remain in default under the debt obligation.
On June 30, 1999, Metro Global entered into a one-year note payable at an
interest rate of 10% with a related party for $30,000. Proceeds from the note
were used for working capital.
F-9
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED AUGUST 28, 1999 AND AUGUST 29, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
5. Convertible Debentures
On July 31, 1998, Metro Global entered into an 8% convertible debenture
with an unrelated party in the amount of $1,000,000, which was used in the
purchase of Fanzine. In connection with this transaction, Metro Global issued a
warrant for 75,000 shares at a price of $4.11 and a warrant for 25,000 shares at
a price of $3.29, both exercisable over two years. Metro Global recorded a
discount on the debenture of $157,700 for the value of the warrants. Metro
Global amortized $19,713 and $6,571 of the discount to interest expense during
the three months ended August 28, 1999 and August 29, 1998, respectively.
The $1,000,000 debenture was to mature on July 31, 2000. Interest is
payable on a quarterly basis. The holder of the debenture is entitled to
convert, after 120 days of the agreement, the principal value into Metro
Global's Common Stock at a discounted market price as is defined in the
agreement. Metro Global has recorded $35,461 of interest expense relating to the
embedded beneficial conversion feature in the quarter ended August 29, 1998.
Metro Global is in technical default under the terms of the debenture due to the
suspension of trading of its Common Stock on September 14, 1999. During the
quarter ended August 28, 1999, $60,000 of convertible debentures plus accrued
interest and penalties were converted into 43,962 restricted shares of Metro
Global's Common Stock.
On March 23, 1998, Metro Global entered into two 12% convertible debentures
totaling $500,000 with related parties. Both notes were due on March 23, 1999,
in either cash or Common Stock, at a conversion rate of $2.25 per share.
Proceeds from the debentures were used for working capital. In March 1999, the
debentures, including accrued interest of $60,000 (which was added to the note
principal), were extended until March 23, 2000.
On July 1, 1998, Metro Global entered into a 12% convertible debenture
totaling $200,000 with a related party. The note was due on July 1, 1999, in
either cash or Common Stock, at a conversion rate of $2.25 per share. Metro
Global recorded $60,248 of interest expense relating to the embedded beneficial
conversion feature. Proceeds from the debenture were used for working capital.
On July 1, 1999, the debenture was extended until July 1, 2001. In conjunction
with the extension, warrants were granted to purchase 50,000 shares of Metro
Global's Common Stock for $2.58 per share. Metro Global recorded interest
expense of $52,000 in connection with the issuance of the warrants.
6. Short-Term Borrowings
Pursuant to a line of credit agreement with Finova Capital, Metro Global's
subsidiary, Metro, may borrow up to 75% of assigned accounts receivable less
than 90 days old, up to a maximum of $1,000,000. The balance due under the line
of credit bears interest at the prime rate plus 5% per annum. In addition, Metro
pays the finance company a management fee equal to 3/4 of 1% of sales submitted
for inclusion in the net security value of the accounts receivable, but not more
than $7,500 per month. The outstanding balance under the line is secured by the
accounts receivable of Metro, and the guarantee of Metro Global. As of August
28, 1999, short-term borrowings under the line of credit totaled $800,044. On
June 30, 1999, Finova did not renew the agreement and is waiting to be repaid
from the Reservoir Capital financing.
F-10
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED AUGUST 28, 1999 AND AUGUST 29, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
6. Short-Term Borrowings (Continued)
In October 1999, Metro Global signed a $4,000,000 Loan and Security
Agreement letter with Reservoir Capital Corporation. Pursuant to the terms,
Metro may borrow up to 70% of accounts receivable less than ninety day old, up
to a maximum of $3,000,000. The accounts receivable borrowing base excludes
foreign receivables and receivables where more than 50% of the balance is over
ninety days old. The borrowings on accounts receivable from CVC, a related
party, are limited to the lesser of 30% of total accounts receivable or
$1,600,000. Additionally, Metro can borrow 40% of inventory, up to a maximum of
$1,000,000.
Borrowings under this loan bear interest at prime rate plus 3.5% per annum.
Additionally, Metro must pay a service fee of .35% per month on the average
daily loan balance. Metro must pay an unused fee of .25% on the amount of the
borrowings under $2,000,000. The loan will be secured by the assets of Metro.
The CVC accounts receivables will be guaranteed to the lender by the sole
shareholder of CVC. Additionally, CVC will execute a put on the inventory of
Metro in case of default.
7. Shareholders' Equity
Series A Convertible Preferred Stock
During April 1998, Metro Global entered into an Offshore Securities
Subscription Agreement for convertible Preferred Shares pursuant to Regulation S
of the U.S. Securities Act of 1933. Under the terms of the agreement, Metro
Global issued 2,175 shares of 1998 Series A Convertible Preferred Stock ('Series
A Shares') at a price of $1,000 per share with a 5% cumulative dividend payable
in Common Stock at conversion. At May 30, 1998, Metro Global received proceeds
of $846,500, net of offering costs representing 855 shares. Substantially all of
the proceeds for the remaining 1320 shares were received in fiscal 1999.
The Series A Shares were convertible at a rate of 100 shares plus accrued
dividends per week at 80% of the 15 day average closing bid price. These Shares
were subject to a twenty-four month mandatory conversion feature. Metro Global
recognized dividends of $146,513 at August 29, 1998 for the embedded beneficial
conversion feature. For the three months ended August 28, 1998, 700 shares of
the Series A shares and accrued dividends were converted into 280,059 shares of
Metro Global's Common Stock.
In addition to the Series A Shares, Metro Global issued 400,000 detachable
warrants to purchase Metro Global's Common Stock at $1.50 per share commencing
April 20, 1998 exercisable over 5 years. In October 1998, all 400,000 warrants
were transferred to a related party of Metro Global and exercised.
F-11
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED AUGUST 28, 1999 AND AUGUST 29, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
8. Licensing Agreement
On July 21, 1999, Metro Global entered into an agreement with certain
subsidiaries of New Frontier, a publicly traded company involved in distribution
of adult entertainment via cable television and the internet. New Frontier will
receive access to Metro Global's 3,200-plus library of videos and pictures for
internet and cable television exhibition for a period of seven years. In
consideration, Metro Global received 500,000 restricted shares of New Frontier's
Common Stock plus warrants to purchase 100,000 shares of Common Stock per year
for five years at market price, as defined. Metro Global recorded the value of
the Common Stock and warrants as an investment and deferred revenue in the
amount of $4,787,474. The deferred revenue is being amortized over seven years.
Metro Global recognized $56,994 of income during the three months ended August
28, 1999.
As part of the agreement, a subsidiary of New Frontier will provide Metro
Global with advertising on its websites, as well as technical support for Metro
Global's websites, including credit card processing. In consideration, Metro
Global issued New Frontier 250,000 restricted shares of its Common Stock and
warrants to purchase 50,000 shares of Common Stock per year for five years at
market price, as defined. Metro Global recorded the value of the Common Stock
and warrants at $716,752. The deferred expense is being amortized over five
years. The unamortized portion of the deferred expense is recorded as a
reduction of additional paid-in-capital in the accompanying financial
statements.
9. Subsequent Events
On September 29, 1999, Metro Global signed a Rescission and Purchase
Agreement with the selling shareholders of Fanzine and a company controlled by
them. In consideration of this sale of Fanzine's stock, Metro Global will
receive payments totaling $4,500,000 and the 1,000,000 contingent shares of
Common Stock originally given to the selling shareholders. Payment of the
$4,500,000 is secured by the assets of Fanzine and partly secured by the
personal guarantees of the former Fanzine shareholders. Metro Global will
receive payments of $1,000,000 by October 31, 1999, $1,000,000 by November 30,
1999, $1,000,000 by May 31, 2000 and $1,500,000 by August 31, 2000. The
operations of Fanzine have been classified as discontinued operations in the
accompanying financial statements (see note 3).
On October 5, 1999, Metro Global signed a working capital line of credit
agreement with Reservoir Capital under essentially the same terms as is in the
commitment letter described in note 6. Actual funding is expected to take place
shortly. Proceeds of the loan will be utilized for a partial pay down of debt
currently in default (as described in notes 4 and 5). In the event that proceeds
are not received from this loan, Metro Global will remain in default under its
debt obligations.
F-12
METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED AUGUST 28, 1999 AND AUGUST 29, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
10. Earnings Per Share
The computation of basic and diluted earnings per share from continuing
operations is as follows:
August 28, 1999 August 29, 1998
--------------- ---------------
Loss from continuing operations $(784,400) $(381,823)
Preferred Stock dividends (146,513)
Loss from continuing operations
attributable to common shareholders $(784,400) $(528,336)
Basic and Diluted EPS:
Basic and Diluted common shares 6,448,889 4,911,904
Basic and Diluted EPS
from continuing operations $ (0.12) $ (0.11)
The weighted average shares attributable to the dilutive instruments listed
below were not included in the computation of diluted earnings per share because
to do so would have been antidilutive for the periods presented:
1999 1998
---- ----
Stock Options 235,996 153,374
Warrants - 184,049
12% convertible debentures 346,632 281,481
8% convertible debentures 483,721 -
At August 28, 1999, warrants to purchase 765,000 shares of Common Stock are
not listed in the above analysis since the exercise price is greater than the
average market price of the common shares.
11. Restatement
Metro Global has restated the financial statements for the three months
ended August 29, 1998. The financial statements were restated to record
dividends on the embedded beneficial conversion feature of the Series A
Preferred Stock, interest on the embedded beneficial conversion feature on
convertible debentures, and changes in estimates. The effect of these
adjustments was a decrease in net income of $577,508 to a net loss of $177,459
and a decrease in earnings of $0.12 per share to a loss of $0.07 per share.
F-13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
None
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
10.1 License Agreement dated July 21, 1999 between Colorado Satellite
Broadcasting, Inc. and Metro Global Media, Inc. on behalf of itself
and its wholly owned subsidiary, Metro Inc., as filed with the
commission on October 7, 1999 as Exhibit 10.21 to the Annual Report on
Form 10-KSB and incorporated herein by reference.
10.2 Loan and Security Agreement dated September 30, 1999 by and between
Metro Global Media, Inc., Metro, Inc. and Reservoir Capital
Corporation, as filled with the Commission on October 7, 1999 as
Exhibit 10.21 to the Annual Report on Form 10-KSB and incorporated
herein by reference.
27.1 Financial Data Schedule filed herewith
(b) Reports on Form 8-K
Report on Form 8-K, filed June 11, 1999, which amended a Report on
Form 8-K filed on August 18, 1998 reporting the acquisition of Fanzine
International, Inc., reporting Item 7. Financial Statements and
Exhibits, which included (i) the Unaudited Balance Sheet and Unaudited
Statement of Income of Fanzine International, Inc. for the six month
period ended June 30, 1998 and (ii) the Pro Forma Unaudited Balance
Sheet and Unaudited Statement of Income which gave effect to the
acquisition of Fanzine International, Inc.
Reports of Form 8-K, filed June 28, 1999, as amended on July 13, 1999,
August 23, 1999 and October 7, 1999 reporting Item 4. Change in
Registrant's Certifying Accountants, the resignation of Grant
Thornton, LLP as Metro Global's certifying accountants.
Report of Form 8-K, filed July 20, 1999, reporting Item 4. Change in
Registrant's Certifying Accountants, the appointment of Imowitz,
Koenig & Co., LLP, as Metro Global's certifying accountants.
Report on Form 8-K, filed September 15, 1999 reporting Item 5. Other
Events, that Metro Global did not timely file its 1999 Annual Report
on Form 10-KSB and that on September 14, 1999, the NASDAQ Stock Market
halted the trading of Metro Global Media, Inc.'s Common Stock.
Report on Form 8-K, filed October 4, 1999 reporting under Item 2.
Acquisition and Disposition of Assets, that on September 29, 1999,
Metro Global Media, Inc. sold Fanzine back to its former stockholders
and a company controlled by them.
8
SIGNATURE
---------
In accordance with 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.
METRO GLOBAL MEDIA, INC.
By: /s/ Janet M. Hoey
---------------------
Janet M. Hoey,
Treasurer(principal financial
and accounting officer), Secretary
and Director
9