1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended June 30, 1996
Commission file number 0-24710
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CD RADIO INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 52-1700207
- --------------------------------------------------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
SIXTH FLOOR, 1001 22ND STREET, N.W., WASHINGTON, D.C. 20037
- -------------------------------------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: 202-296-6192
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
------- ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of July 23, 1996.
Class Outstanding
----- -----------
COMMON STOCK, $.001 PAR VALUE 9,459,760
2
CD RADIO INC.
(A DEVELOPMENT STAGE ENTERPRISE)
INDEX
Part I - Financial Information
Item 1. Financial Statements (unaudited)
Page
Consolidated Statements of Operations (unaudited) for the three 1
and six month periods ended June 30, 1996 and 1995 and for
the period May 17, 1990 (date of inception) to June 30, 1996
Consolidated Balance Sheets as of June 30, 1996 (unaudited) 2
and December 31, 1995
Consolidated Statements of Cash Flows (unaudited) for the six 3
month periods ended June 30, 1996 and 1995 and for the
period May 17, 1990 (date of inception) to June 30, 1996
Notes to Consolidated Financial Statements (unaudited) 4
Item 2. Management's Discussion and Analysis of Results of 5
Operations and Financial Condition
Part II - Other Information 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8K 8
Index to Exhibits 13
Signatures
3
CD RADIO INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended For the period
-------------------------- --------------------------- May 17,1990
June 30, June 30, June 30, June 30, (date of inception)
1996 1995 1996 1995 1996
-------- -------- -------- -------- -------------------
Revenue $ - $ - $ - $ - $ -
Expenses:
Legal, consulting and
regulatory fees 347,495 220,020 575,169 408,939 6,242,042
Other general and administrative 330,151 296,059 611,832 553,169 6,913,847
Research and development 24,576 31,408 52,477 57,699 1,851,533
Write-off of investment in
Sky-Highway Radio Corp. - - - - 2,000,000
---------- ---------- ------------ ---------- ------------
Total expenses 702,222 547,487 1,239,478 1,019,807 17,007,422
---------- ---------- ------------ ---------- ------------
Other income (expense)
Interest income 20,099 36,385 45,389 80,508 261,250
Interest expense (4,903) (4,960) (9,820) (9,799) (163,002)
---------- ---------- ------------ ---------- ------------
15,196 31,425 35,569 70,709 98,248
---------- ---------- ------------ ---------- ------------
Net loss $ (687,026) $ (516,062) $ (1,203,909) $ (949,098) $(16,909,174)
========== ========== ============ ========== ============
Net loss per common share $ (0.07) $ (0.06) $ (0.13) $ (0.10) $ (2.44)
========== ========== ============ ========== ============
Weighted average common shares
and common share equivalents
outstanding 9,322,471 9,198,960 9,385,781 9,198,960 7,308,750
========== ========== ============ ========== ============
The accompanying notes are an integral part of these consolidated financial
statements
1
4
CD RADIO INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
1996 1995
----------- ------------
(unaudited)
Current assets:
Cash and cash equivalents $ 1,371,444 $ 1,799,814
Prepaid expense and other 4,068 8,781
------------- -------------
Total current assets 1,375,512 1,808,595
------------- -------------
Property and equipment, at cost:
Technical equipment 254,200 254,200
Office equipment and other equipment 89,220 89,220
Demonstration equipment 38,664 38,664
------------- -------------
382,084 382,084
Less accumulated depreciation (187,383) (160,498)
------------- -------------
194,701 221,586
Deposits 303,793 303,793
------------- -------------
Total Assets $ 1,874,006 $ 2,333,974
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 59,119 $ 46,521
Other 23,384 20,716
------------- -------------
Total current liabilities 82,503 67,237
Loan from officer 240,000 240,000
Deferred rent and other 65,112 35,967
------------- -------------
Total liabilities 387,615 343,204
------------- -------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value, 10,000,000 shares
authorized; none issued or outstanding - -
Common stock, $0.001 par value; 50,000,000 shares
authorized; 9,450,260 and 9,305,760 shares issued
and outstanding at June 30, 1996 and December 31,
1995, respectively 9,450 9,306
Additional paid-in capital 18,546,115 18,006,729
Deficit accumulated during the development stage (16,909,174) (15,705,265)
Deferred compensation on stock options granted (160,000) (320,000)
------------- -------------
Total stockholders' equity 1,486,391 1,990,770
------------- -------------
Total liabilities and stockholders' equity $ 1,874,006 $ 2,333,974
============= =============
The accompanying notes are an integral part of these consolidated financial
statements
2
5
CD RADIO INC. AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the period
Six months ended May 17,1990
---------------------------- (date of inception)
June 30, June 30, to June 30,
1996 1995 1996
-------- -------- ------------------
Cash flows from operating activities:
Net loss $ (1,203,909) $ (949,098) $(16,909,174)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 26,885 28,649 198,082
Write off of investment in Sky-Highway Radio Corp. - - 2,000,000
Compensation expense in connection with
issuance of stock options 160,000 160,000 1,555,500
Common stock issued for services rendered 222,731 - 570,014
Increase (decrease) in cash and cash equivalents
resulting from changes in assets and liabilities:
Prepaid expense and other 4,713 (2,749) (4,068)
Due to related party - - 350,531
Deposits - - (303,793)
Accounts payable and accrued expenses 57,405 (76,641) 179,165
Other liabilities (12,995) 3,342 43,688
------------ ----------- -------------
Net cash used in operating activities (745,170) (836,497) (12,320,055)
------------ ----------- -------------
Cash flows from investing activities:
Capital expenditures - (13,824) (392,783)
Acquisition of Sky-Highway Radio Corp. - - (2,000,000)
------------ ----------- -------------
Net cash used in investing activities (13,824) (2,392,783)
------------ ----------- -------------
Cash flows from financing activities:
Proceeds from issuance of units and common stock - - 14,557,482
Proceeds from exercise of stock options by
Company Officer 105,000 - 105,000
Proceeds from exercise of stock warrants 211,800 - 211,800
Proceeds from issuance of promissory notes - - 200,000
Proceeds from issuance of promissory notes to
related parties - - 2,965,000
Repayment of promissory note - - (200,000)
Repayment of promissory notes to related parties - - (2,195,000)
Loan from officer - - 440,000
Deferred offering costs - - -
------------ ----------- -------------
Net cash provided by financing activities 316,800 - 16,084,282
------------ ----------- -------------
Net increase (decrease) in cash and cash equivalents (428,370) (850,321) 1,371,444
Cash and cash equivalents at the beginning of period 1,799,814 3,400,261 -
------------ ----------- -------------
Cash and cash equivalents at the end of period $ 1,371,444 $ 2,549,940 $ 1,371,444
============ =========== =============
Supplemental disclosure of cash information:
Cash paid during the period for interest $ - $ - $ 40,063
============ =========== =============
Supplemental disclosure of non-cash financing activities:
Common stock issued in satisfaction of notes
payable to related parties, including
accrued interest $ - $ - $ 998,452
============ =========== =============
Common stock issued in satisfaction of due to
related parties including accrued interest $ - $ - $ 409,390
============ =========== =============
Common stock issued in satisfaction of
commissions payable $ - $ - $ 20,000
============ =========== =============
The accompanying notes are an integral part of these consolidated financial
statements
3
6
CD RADIO INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
GENERAL
The accompanying consolidated financial statements do not include all
of the information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles. In the opinion of management, all adjustments (consisting only of
normal, recurring adjustments) considered necessary to fairly reflect the
Company's consolidated financial position and consolidated results of
operations have been included.
4
7
CD RADIO INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company was organized in May 1990 and is in its development stage.
The Company's principal activities to date have included technology
development, pursuing regulatory approval for CD Radio, initiation of
discussions with radio manufacturers and automakers, market research, design,
development, contract negotiations with satellite and launch vehicle
contractors, technical efforts with respect to standards and specifications,
development of a mobile demonstration program and securing adequate working
capital. The Company has been unprofitable to date and expects to continue to
incur substantial losses through at least the first full year of CD Radio
service. Since its inception, the Company has not derived any revenues from
operations and does not expect to generate any revenues from operations prior
to the commencement of CD Radio, which is not expected to occur before the
first half of 1999. In order to commence CD Radio service, the Company will
require an FCC license (the FCC License) and substantial additional funds to
finance construction of its satellite system, to plan and implement its
service, to provide working capital and to sustain its operations until it
generates positive cash flows from operations.
In June 1994, the Company undertook measures to reduce the Company's
cash requirements prior to the receipt of the FCC License. As a result of these
efforts, the Company's cash operating expenses, net of cash received from
interest income, was $414,000 for the three months ended June 30, 1996. The
Company received $237,000 in the quarter in connection with the exercise of
stock options and warrants. In the absence of the FCC License, the Company
believes that its working capital is sufficient to fund planned operations
through the first quarter of 1997. There can be no assurance that the
Company's actual cash requirements will not exceed its anticipated pre-License
cash requirements, that additional cash requirements will not arise or that
additional financing will not be required prior to the receipt of the FCC
License.
RESULTS OF OPERATIONS
The Company recorded net losses of $1,204,000 and $949,000 for the six
months ended June 30, 1996 and 1995, respectively, and $687,000 and $516,000
for the three months ended June 30, 1996 and 1995, respectively. The Company's
total operating expenses were $1,239,000 and $1,020,000 for the six months
ended June 30, 1996 and 1995, respectively, and were $702,000 for the three
months ended June 30, 1996 compared to $547,000 for the three months ended June
30, 1995. These levels of expenditures reflect reduced Company activity and
are expected to remain at relatively low levels until the FCC License is
received.
5
8
Legal, consulting and regulatory fees increased for the six months
ended June 30, 1996 to $575,000 from $409,000 for the six months ended June
30, 1995 and were $347,000 and $220,000 for the three months ended June 30 ,
1996 and 1995, respectively. The increase was the result of a rise in
regulatory activity during the second quarter of 1996.
Research and development costs were $52,000 and $58,000 for the six
months ended June 30, 1996 and 1995, respectively, and $25,000 and $31,000 for
the three months ended June 30, 1996 and 1995, respectively. This level of
research and development cost was the result of the Company completing the
majority of such activities in 1994.
Other general and administrative expenses increased for the six months
ended June 30, 1996 to $612,000 from $553,000 for the six months ended June 30,
1995, and were $330,000 and $296,000 for the three month periods end June 30,
1996 and 1995, respectively. General and administrative expenses continue to
remain at a low level due to a focused effort to reduce costs until such time
as the Company receives the FCC License. The Company also incurred a non-cash
charge of $160,000 for the six month periods ended June 30, 1996 and 1995,
attributable to the recognition of compensation expense in connection with
stock options issued to officers of the Company.
The decrease of interest income to $45,000 for the six months ended
June 30, 1996, from $81,000 in the six months ended June 30, 1995, and to
$20,000 from $36,000 for the three month periods ended June 30, 1996 and 1995,
respectively, was the result of a higher average cash balance during the first
half of 1995. The cash and cash equivalents on hand were originally obtained
from the Company's initial public offering in September of 1994.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1996, the Company had working capital of approximately
$1,293,000, compared to $1,741,000 at December 31, 1995. The reduction in
working capital represents the Company's use of cash for operating expenses
during 1996. The working capital was primarily obtained in the initial public
offering on September 20, 1994 which resulted in net cash proceeds of $4.4
million, including the exercise of the underwriters' over-allotment option.
Should the Company receive its FCC License, the Company will require
substantial additional financing to complete the construction and launch of its
satellite system and to fund the first full year of CD Radio.
In the absence of the FCC License, the Company believes that its
working capital is sufficient to fund planned operations through the first
quarter of 1997. There can be no assurance, however, that the Company's actual
cash requirements will not exceed its anticipated pre-FCC License cash
requirements, that additional cash requirements will not arise or that
additional financing will not be required prior to the receipt of the FCC
License.
The Company estimates that upon receipt of the FCC License (assuming
that the FCC License is received in the second half of 1996 and that the
Effective Date occurs upon receipt of the FCC License) it will require cash in
the aggregate amount of $70 million, $181 million and $228 million in the
first, second and third years, respectively, following receipt of the FCC
License to fund the construction and launch of the Company's satellites, the
commencement of CD Radio and to provide cash reserves for the first year of
service.
6
9
The Company believes that it is likely that the FCC will choose to
auction any S-band spectrum that may be allocated to satellite radio. The
Company's estimated cash requirements, however, do not include any amounts that
the Company may be required to pay to receive an FCC License in the event that
the FCC determines to auction any spectrum that may be allocated. There can be
no assurance that the Company would be a successful bidder in any FCC auction
of S-band spectrum, and the Company is unable to predict the amount that the
Company may be required to pay to receive an FCC License if the Company were a
successful bidder at any such auction.
Upon receipt of the FCC License, the Company intends to seek
additional financing through further debt and equity financings. However,
there can be no assurance that the Company will be able to raise additional
financing on favorable terms, if at all, or that it will be able to do so on a
timely basis. If such financing were not available on a timely basis, the
Company would be required to delay satellite and/or launch vehicle construction
in order to conserve cash to fund continued operations, which would cause
delays in commencement of its operations and increased costs.
The Company's estimates of its cash requirements are forward looking
statements that involve a number of risks and uncertainties. Such estimates
assume that the FCC License is received by the second half of 1996, that the
Effective Date occurs upon receipt of the FCC License and that operation of CD
Radio commences in the first half of 1999, and do not include the price that
the Company may be required to pay to receive the FCC License in the event that
the Company is a successful bidder in an FCC auction of S-band spectrum. Actual
amounts may exceed this estimate, and delays may occur due to a variety of
causes. Cash requirements assume equity financing and therefore do not include
interest payments. The Company's actual future cash requirements will depend
upon numerous factors, including the costs associated with the construction and
deployment of the satellite system and the rate of growth of its business
subsequent to commencing service. Additional funds would be required in the
event of delay, cost overruns, launch failure, launch services or satellite
system change orders, or any shortfalls in estimated levels of operating cash
flow, or to meet unanticipated expenses, or if the FCC applies auction
requirements to the FCC License.
The Company anticipates funding its projected cash requirements
through the completion of additional debt and equity financings. The Company
does not have its financing commitments in place and there can be no assurance
that the Company will be able to obtain financing on favorable terms, if at
all, or that it will be able to do so on a timely basis.
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PART II.
OTHER INFORMATION
Item 5. Other Information
On August 2, 1996, a bill was introduced before the House
of Representatives of the Congress of the United States that
would, among other things, terminate the authority of the
Federal Communications Commission to provide preferential
treatment in licensing procedures under the pioneer preference
program. There can be no assurance that the proposed
legislation will be enacted in its present form or at all, and
the Company is unable to predict the effect that such enactment
would have upon the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
3.1 Amended and Restated Certificate of Incorporation.(2)
3.2 Amended and Restated By-Laws.(2)
4.1 Description of Capital Stock contained in the Amended and Restated Certificate of Incorporation (see Exhibit 3.1).(2)
4.2 Description of Rights of Security Holders contained in the Amended and Restated Bylaws (see Exhibit 3.2).(2)
4.3 Form of Certificate for Shares of Common Stock.(3)
4.4 Form of Common Stock Purchase Warrant Agreement between the Company and Continental Stock Transfer and Trust
Company.(4)
4.5 Form of Common Stock Purchase Warrant Certificate.(4)
4.6 Form of Representatives' Warrant Agreement among the Company, First Marathon (U.S.A.) Inc., First Marathon Securities
Limited and Continental Stock Transfer and
Trust Company.(4)
4.7 Form of Representatives' Warrant Certificate.(4)
10.1 Option Agreement, dated January 23, 1992, between the Company and New World Sky Media.(2)
10.2.1 Agreement, dated May 22, 1992, between Ivanhoe Capital Corporation and the Company.(2)
10.2.2 Termination of Ivanhoe Agreement, dated January 2, 1994.(2)
10.3 Lease Agreement, dated October 20, 1992, between 22nd & K Street Office Building Limited Partnership and the
Company.(2)
10.4 Letter Agreement, dated November 18, 1992, between the Company and Batchelder & Partners, Inc.(2)
10.5.1 Employment Agreement, dated January 29, 1993, between the Company and Richard Cooperman.(5)
10.5.2 Agreement, dated June 20, 1994, between the Company and Richard Cooperman. (6)
10.6 Proprietary Information and Non-Competition Agreement, dated February 1, 1993, for Richard Cooperman.(2)
10.7 Option and Purchase Agreement, dated February 2, 1993, between the Company and Charles W. Ergen and David M.
Drucker.(2)
8
11
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
10.8.1 Proprietary Information and Non-Competition Agreement, dated February 9, 1993, for Robert Briskman.(2)
10.8.2 Amendment No. 1 to Proprietary Information and Non-Competition Agreement between the Company and Robert Briskman.(2)
**10.9.1 Satellite Construction Agreement, dated March 2, 1993, between Space Systems/Loral and the Company.(2)
**10.9.2 Amendment No. 1 to Satellite Construction Agreement, effective December 28, 1993, between Space Systems/Loral and the
Company.(2)
**10.9.3 Amendment No. 2 to Satellite Construction Agreement, effective March 8, 1994, between Space Systems/Loral and the
Company.(3)
10.9.4 Amendment No. 3 to Satellite Construction Agreement, effective February 12, 1996, between Space Systems/Loral, Inc. and
the Company.(15)
10.10 Assignment of Technology Agreement, dated April 15, 1993, between Robert Briskman and the Company.(2)
10.11 Agency Agreement, dated April 27, 1993, between the Company and First Marathon Securities Limited.(2)
10.12 Demand Note and Grant of Warrant to Robert Friedland, dated April 28, 1993.(2)
10.13 Amended and Restated Option Agreement between the Company and Robert Briskman.(2)
10.14 Demand Note and Grant of Warrant to Robert Friedland, dated October 13, 1993.(2)
10.15.1 Launch Reservation Agreement, dated September 20, 1993, between the Company and Arianespace.(7)
10.15.2 Modification of Launch Reservation Agreement, dated April 1, 1994, between the Company and Arianespace.(3)
10.15.3 Second Modification of Launch Reservation Agreement, dated August 10, 1994, between the Company and Arianespace.(8)
10.16 Option Agreement, effective as of October 16, 1991, between the Company and Charles Dalfen.(2)
10.17 Option Agreement, effective as of October 16, between the Company and Charles Dalfen.(2)
10.18.1 Employment and Noncompetition Agreement between the Company and David Margolese.(9)
10.18.2 First Amendment to Employment Agreement between the Company and David Margolese.(6)
10.19.1 Employment and Noncompetition Agreement between the Company and Robert Briskman. (10)
10.19.2 First Amendment to Employment Agreement between the Company and Robert Briskman.(6)
10.20 Registration Agreement, dated January 2, 1994, between the Company and M.A. Rothblatt and B.A. Rothblatt.(2)
10.21 1994 Stock Option Plan.(2)
10.22 Amended and Restated 1994 Directors' Nonqualified Stock Option Plan.(15)
10.23 Form of Lock-Up Agreement executed by certain holders of the Company's Common
Stock. (6)
10.24 Option Agreement, dated as of October 21, 1992, between the Company and Batchelder & Partners, Inc.(11)
10.25 Settlement Agreement, dated as of February 2, 1994, between the Company and New World Sky Media Inc. and Bryan Kim.(2)
10.26.1 Employment and Noncompetition Agreement between the Company and Margaret E. Grayson.(12)
10.26.2 First Amendment to Employment Agreement between the Company and Margaret E. Grayson.(6)
10.26.3 Second Amendment to Employment Agreement between the Company and Margaret E. Grayson.(6)
10.27 Settlement Agreement, dated as of April 1, 1994, among the Company, M.A. Rothblatt,
B.A. Rothblatt and Marcor, Inc.(3)
10.28.1 Demand Note, dated April 19, 1994, in favor of David Margolese.(13)
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12
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
10.28.2 Note, dated June 30, 1994, in favor of David Margolese.(8)
10.29 Demand Note, dated April 19, 1994, between the Company and D. Friedland.(6)
10.30.1 Demand Note, dated July 5, 1994, in favor of Jobrenco Limited.(6)
10.30.2 Security Agreement, dated July 5, 1994, between the Company and Jobrenco Limited.(6)
10.31 Placement Agreement, dated April 27, 1993, between the Company and First Marathon Securities Limited.(6)
10.32 Letter of Understanding, dated December 3, 1993, between the Company and The Seidler Companies Incorporated.(6)
10.33 Form of Subscription Agreement among First Marathon Securities Limited and Canadian Purchasers.(1)
10.34 Form of Subscription Agreement among First Marathon Securities Limited and Non-U.S. and Non-Canadian Purchasers.(1)
10.35 Form of Underwriting Agreement (see Exhibit 1.1)
10.36 Letter Agreement, dated January 13, 1995, between the Company and Brenner Securities.(15)
10.37 1995 Stock Compensation Plan.(15)
11.1 Computation of net loss per share
27.1 Financial Data Schedule
- -----------
** Portions of these exhibits have been omitted pursuant to an Application
for Confidential Treatment filed with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
(1) Incorporated by reference to the same-numbered exhibit to Amendment No.
5, filed September 8, 1994, to the Registrant's Registration Statement
No. 33-74782 M Form S-1 filed with the Commission on February 2,
1994.
(2) Incorporated by reference to the same-numbered exhibit to the
Registrant's Registration Statement No. 33-74782 on Form S-1 filed with
the Commission on February 2, 1994.
(3) Incorporated by reference to the same-numbered exhibit to Amendment No.
2, filed with the Commission on April 14, 1994, to Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the Commission
on February 2, 1994.
(4) Incorporated by reference to the same-numbered exhibit to Amendment No.
5, filed with the Commission on September 8, 1994, to Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the Commission
on February 2, 1994.
(5) Incorporated by reference to exhibit 10.5 to the Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the Commission
on February 2, 1994.
(6) Incorporated by reference to the same-numbered exhibit to Amendment No.
5, filed with the Commission on August 2, 1994, to Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the Commission
on February 2, 1994.
(7) Incorporated by reference to Exhibit No. 10.15 to the Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the
Commission on February 2, 1994.
(8) Incorporated by reference to the same-numbered exhibit to Amendment No.
4, filed with the Commission on August 14, 1994, to Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the
Commission on February 2, 1994
(9) Incorporated by reference to Exhibit No. 10.18 to the Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the Commission
on February 2, 1994.
(10) Incorporated by reference to Exhibit No. 10.19 to Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the Commission
on February 2, 1994.
10
13
(11) Incorporated by reference to Exhibit No. 1, filed with the Commission on
March 14, 1994, to Registrant's Registration Statement No. 33-74782 on
Form S-1 as filed with the Commission on February 2, 1994.
(12) Incorporated by reference to Exhibit No. 10.26 to Amendment No. 2, filed
with the Commission on April 13, 1994, to Registrant's Registration
Statement No. 33-74782 on Form S-1 as filed with the Commission on
February 2, 1994.
(13) Incorporated by reference to Exhibit No. 10.28 to Amendment No. 3 filed
with the Commission on August 2, 1994, to Registrant's Registration
Statement No. 33-74782 on Form S-1 as filed with the Commission on
February 2, 1994.
(14) Incorporated by reference to the same-numbered exhibit to Registrant's
Annual Report in Form 10-K for the fiscal year ended December 31, 1994,
Commission File No. 0-24710.
(15) Incorporated by reference to the same-numbered exhibit to Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995,
Commission File No. 0.24710.
(b) Reports on Form 8-K
No reports were filed on Form 8-K during the quarter for which
this Report is filed.
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SIGNATURES
Pursuant to the requirements of the Securites Exchange Commission Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CD RADIO INC.
(Registrant)
Date: August 9, 1996 /s/ David Margolese
----------------------------------
Chairman and
Chief Executive Officer
(Duly authorized officer and
principal financial officer)
12
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INDEX TO EXHIBITS
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------ ----------- ------
3.1 Amended and Restated Certificate of Incorporation.(2)
3.2 Amended and Restated By-Laws.(2)
4.1 Description of Capital Stock contained in the Amended and Restated Certificate of Incorporation
(see Exhibit 3.1).(2)
4.2 Description of Rights of Security Holders contained in the Amended and Restated Bylaws
(see Exhibit 3.2).(2)
4.3 Form of Certificate for Shares of Common Stock.(3)
4.4 Form of Common Stock Purchase Warrant Agreement between the Company and Continental Stock
Transfer and Trust Company.(4)
4.5 Form of Common Stock Purchase Warrant Certificate.(4)
4.6 Form of Representatives' Warrant Agreement among the Company, First Marathon (U.S.A.) Inc.,
First Marathon Securities
Limited and Continental Stock Transfer andTrust Company.(4)
4.7 Form of Representatives' Warrant Certificate.(4)
10.1 Option Agreement, dated January 23, 1992, between the Company and New World Sky Media.(2)
10.2.1 Agreement, dated May 22, 1992, between Ivanhoe Capital Corporation and the Company.(2)
10.2.2 Termination of Ivanhoe Agreement, dated January 2, 1994.(2)
10.3 Lease Agreement, dated October 20, 1992, between 22nd & K Street Office Building Limited
Partnership and the Company.(2)
10.4 Letter Agreement, dated November 18, 1992, between the Company and Batchelder & Partners, Inc.(2)
10.5.1 Employment Agreement, dated January 29, 1993, between the Company and Richard Cooperman.(5)
10.5.2 Agreement, dated June 20, 1994, between the Company and Richard Cooperman. (6)
10.6 Proprietary Information and Non-Competition Agreement, dated February 1, 1993, for Richard
Cooperman.(2)
10.7 Option and Purchase Agreement, dated February 2, 1993, between the Company and Charles W. Ergen
and David M. Drucker.(2)
10.8.1 Proprietary Information and Non-Competition Agreement, dated February 9, 1993, for Robert
Briskman.(2)
10.8.2 Amendment No. 1 to Proprietary Information and Non-Competition Agreement between the Company
and Robert Briskman.(2)
**10.9.1 Satellite Construction Agreement, dated March 2, 1993, between Space Systems/Loral and the
Company.(2)
**10.9.2 Amendment No. 1 to Satellite Construction Agreement, effective December 28, 1993, between Space
Systems/Loral and the Company.(2)
**10.9.3 Amendment No. 2 to Satellite Construction Agreement, effective March 8, 1994, between Space
Systems/Loral and the Company.(3)
10.9.4 Amendment No. 3 to Satellite Construction Agreement, effective February 12, 1996, between Space
Systems/Loral, Inc. and the Company.(15)
10.10 Assignment of Technology Agreement, dated April 15, 1993, between Robert Briskman and the
Company.(2)
10.11 Agency Agreement, dated April 27, 1993, between the Company and First Marathon Securities
Limited.(2)
10.12 Demand Note and Grant of Warrant to Robert Friedland, dated April 28, 1993.(2)
10.13 Amended and Restated Option Agreement between the Company and Robert Briskman.(2)
10.14 Demand Note and Grant of Warrant to Robert Friedland, dated October 13, 1993.(2)
10.15.1 Launch Reservation Agreement, dated September 20, 1993, between the Company and Arianespace.(7)
10.15.2 Modification of Launch Reservation Agreement, dated April 1, 1994, between the Company and
Arianespace.(3)
10.15.3 Second Modification of Launch Reservation Agreement, dated August 10, 1994, between the Company
and Arianespace.(8)
13
16
INDEX TO EXHIBITS
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------ ----------- ------
10.16 Option Agreement, effective as of October 16, 1991, between the Company and Charles Dalfen.(2)
10.17 Option Agreement, effective as of October 16, between the Company and Charles Dalfen.(2)
10.18.1 Employment and Noncompetition Agreement between the Company and David Margolese.(9)
10.18.2 First Amendment to Employment Agreement between the Company and David Margolese.(6)
10.19.1 Employment and Noncompetition Agreement between the Company and Robert Briskman. (10)
10.19.2 First Amendment to Employment Agreement between the Company and Robert Briskman.(6)
10.20 Registration Agreement, dated January 2, 1994, between the Company and M.A. Rothblatt and
B.A. Rothblatt.(2)
10.21 1994 Stock Option Plan.(2)
10.22 Amended and Restated 1994 Directors' Nonqualified Stock Option Plan.(15)
10.23 Form of Lock-Up Agreement executed by certain holders of the Company's Common Stock. (6)
10.24 Option Agreement, dated as of October 21, 1992, between the Company and Batchelder & Partners, Inc.(11)
10.25 Settlement Agreement, dated as of February 2, 1994, between the Company and New World Sky Media
Inc. and Bryan Kim.(2)
10.26.1 Employment and Noncompetition Agreement between the Company and Margaret E. Grayson.(12)
10.26.2 First Amendment to Employment Agreement between the Company and Margaret E. Grayson.(6)
10.26.3 Second Amendment to Employment Agreement between the Company and Margaret E. Grayson.(6)
10.27 Settlement Agreement, dated as of April 1, 1994, among the Company, M.A. Rothblatt, B.A.
Rothblatt and Marcor, Inc.(3)
10.28.1 Demand Note, dated April 19, 1994, in favor of David Margolese.(13)
10.28.2 Note, dated June 30, 1994, in favor of David Margolese.(8)
10.29 Demand Note, dated April 19, 1994, between the Company and D. Friedland.(6)
10.30.1 Demand Note, dated July 5, 1994, in favor of Jobrenco Limited.(6)
10.30.2 Security Agreement, dated July 5, 1994, between the Company and Jobrenco Limited.(6)
10.31 Placement Agreement, dated April 27, 1993, between the Company and First Marathon Securities
Limited.(6)
10.32 Letter of Understanding, dated December 3, 1993, between the Company and The Seidler Companies
Incorporated.(6)
10.33 Form of Subscription Agreement among First Marathon Securities Limited and Canadian
Purchasers.(1)
10.34 Form of Subscription Agreement among First Marathon Securities Limited and Non-U.S. and
Non-Canadian Purchasers.(1)
10.35 Form of Underwriting Agreement (see Exhibit 1.1)
10.36 Letter Agreement, dated January 13, 1995, between the Company and Brenner Securities.(15)
10.37 1995 Stock Compensation Plan.(15)
11.1 Computation of net loss per share
27.1 Financial Data Schedule
- -----------
** Portions of these exhibits have been omitted pursuant to an Application
for Confidential Treatment filed with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
(1) Incorporated by reference to the same-numbered exhibit to Amendment No. 5,
filed September 8, 1994, to the Registrant's Registration Statement No.
33-74782 M Form S-1 filed with the Commission on February 2, 1994.
(2) Incorporated by reference to the same-numbered exhibit to the Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the Commission
on February 2, 1994.
(3) Incorporated by reference to the same-numbered exhibit to Amendment No. 2,
filed with the Commission on April 14, 1994, to Registrant's Registration
Statement No. 33-74782 on Form S-1 filed with the Commission on February
2, 1994.
(4) Incorporated by reference to the same-numbered exhibit to Amendment No. 5,
filed with the Commission on September 8, 1994, to Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the Commission
on February 2, 1994.
14
17
(5) Incorporated by reference to exhibit 10.5 to the Registrant's Registration
Statement No. 33-74782 on Form S-1 filed with the Commission on February
2, 1994.
(6) Incorporated by reference to the same-numbered exhibit to Amendment No. 5,
filed with the Commission on August 2, 1994, to Registrant's Registration
Statement No. 33-74782 on Form S-1 filed with the Commission on February
2, 1994.
(7) Incorporated by reference to Exhibit No. 10.15 to the Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the
Commission on February 2, 1994.
(8) Incorporated by reference to the same-numbered exhibit to Amendment No. 4,
filed with the Commission on August 14, 1994, to Registrant's Registration
Statement No. 33-74782 on Form S-1 filed with the Commission on February
2, 1994
(9) Incorporated by reference to Exhibit No. 10.18 to the Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the Commission
on February 2, 1994.
(10) Incorporated by reference to Exhibit No. 10.19 to Registrant's
Registration Statement No. 33-74782 on Form S-1 filed with the Commission
on February 2, 1994.
(11) Incorporated by reference to Exhibit No. 1, filed with the Commission on
March 14, 1994, to Registrant's Registration Statement No. 33-74782 on
Form S-1 as filed with the Commission on February 2, 1994.
(12) Incorporated by reference to Exhibit No. 10.26 to Amendment No. 2, filed
with the Commission on April 13, 1994, to Registrant's Registration
Statement No. 33-74782 on Form S-1 as filed with the Commission on
February 2, 1994.
(13) Incorporated by reference to Exhibit No. 10.28 to Amendment No. 3 filed
with the Commission on August 2, 1994, to Registrant's Registration
Statement No. 33-74782 on Form S-1 as filed with the Commission on
February 2, 1994.
(14) Incorporated by reference to the same-numbered exhibit to Registrant's
Annual Report in Form 10-K for the fiscal year ended December 31, 1994,
Commission File No. 0-24710.
(15) Incorporated by reference to the same-numbered exhibit to Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995,
Commission File No. 0.24710.
15