SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 13, 1996
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TRIATHLON BROADCASTING COMPANY
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(Exact name of registrant as specified in charter)
Delaware 0-26530 33-0668235
(State or Other Jurisdiction (Commission File No.) (IRS Employer Identification No.)
of Incorporation)
Symphony Towers, 750 B Street, Suite 1920, San Diego, CA 92101
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Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 239-4242
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N/A
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(Former name or former address, if changed since last report)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired
The audited financial information of Rock Steady, Inc. for
the years ended September 30, 1994 and 1995 is set forth in
the Prospectus dated March 4, 1996, contained in the
Registration Statement filed by the Registrant with the
Securities and Exchange Commission (File No. 333-1186) (the
"Prospectus"), which is incorporated herein by reference.
The financial information required by Item 7(a) for the six
months ended March 31, 1996 follows:
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ROCK STEADY, INC.
BALANCE SHEET
MARCH 31, 1996
(UNAUDITED)
ASSETS
Cash $ 28,357
Accounts receivable, net 40,735
Due from officers 47,057
Prepaid expenses and other assets 1,250
-----------
Total current assets 117,399
Property and equipment, net 122,765
Intangible assets, net 813,509
-----------
$ 1.053.673
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 105,910
Accrued interest 453,076
Notes payable-related parties 1,439,847
Notes payable-other 5,258
-----------
Total current liabilities 2,004,091
Stockholders' equity (950,418)
-----------
$ 1,053,673
===========
See Notes to Condensed Financial Statements.
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ROCK STEADY, INC.
CONDENSED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
(UNAUDITED)
Six Months Ended March 31,
--------------------------
1996 1995
---- ----
Net advertising revenues........................ $ 241,003 $ 450,953
JSA revenue..................................... 126,471
------------ ------------
Total revenues.................................. 367,474 450,953
Operating expenses:.............................
Programming............................ 197,102 200,110
Technical.............................. 20,359 26,717
Sales.................................. 86,176 135,817
General and administrative............. 189,287 98,691
Depreciation and amortization.......... 50,272 66,164
------------ ------------
543,196 527,499
------------ ------------
Loss from operations............................ (175,722) (76,546)
Other expense:
Interest expense-related party......... (68,379) (75,238)
Other.................................. (4,069) (315)
------------ ------------
(72,448) (75,553)
Net loss ....................................... (248,170) (152,099)
Accumulated deficit, beginning of period........ (692,248) (401,377)
------------ ------------
Accumulated deficit, end of period.............. $ (940,418) $ (553,476)
============ ============
See Notes to Condensed Financial Statements.
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ROCK STEADY, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended March 31,
--------------------------
1996 1995
---- ----
Net cash used in operating activities............. $ (18,856) $ (33,982)
INVESTING ACTIVITIES
Capital expenditures.............................. (4,876) (11,416)
FINANCING ACTIVITIES
Increase in note payable-related parties.......... 38,853 24,201
---------- ---------
Net increase (decrease) in cash................... 15,121 (21,197)
Cash at beginning of period....................... 13,236 23,005
---------- ---------
Cash at end of period............................. $ 28,357 $ 1,808
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See Notes to Condensed Financial Statements.
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ROCK STEADY, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1996
1. NATURE OF BUSINESS AND ORGANIZATION
Rock Steady, Inc. (the "Company") was incorporated under the laws of
the State of Nebraska on July 20, 1992 for the primary purpose of owning and
operating radio stations KHAT-AM, KIBZ-FM and KKNB-FM (collectively, the
"Stations") in Lincoln, Nebraska.
In January 1996, the Company contracted for the sale of substantially
all of the assets relating to the operation of the Stations to Triathlon
Broadcasting Company ("TBC") for cash of $3.3 million. During the period from
January 29, 1996 to the closing date, TBC sold advertising on the Stations for
a fee pursuant to a Joint Sales Agreement ("JSA").
2. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included. Operating results for an interim
period are not necessarily indicative of the results that may be expected for a
full year.
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(b) Pro Forma Financial Information
The unaudited pro forma financial information of Triathlon
Broadcasting Company which includes Rock Steady, Inc. for the
year ended September 30, 1995 is set forth in the Prospectus,
which is incorporated herein by reference.
The pro forma financial information required by Item 7(b) for
the year ended March 31, 1996, follows:
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PRO FORMA CONDENSED COMBINED FINANCIAL
INFORMATION - (UNAUDITED)
The Pro Forma Condensed Combined Statement of Operations for the year
ended March 31, 1996 presents the statement of operations of Triathlon
Broadcasting Company (the "Company") as if (i) the initial public offering
("IPO") of the Company's Common Stock (ii) the issuance of the 9% Mandatory
Convertible Preferred Stock ("Preferred Stock Offering"), (iii) the acquisition
of KRBB-FM, KFH-AM, KXLK-FM and KQAM-AM (the "Initial Wichita Stations"), (iv)
the acquisition of KTGL-FM and KZKX-FM (the "Initial Lincoln Stations"), and (v)
the acquisition of KIBZ-FM, KKNB-FM and KHAT-AM (the "Rock Steady Stations")
had occurred on April 1, 1995. The Pro Forma Condensed Combined Balance Sheet
at March 31, 1996 presents the financial position of the Company as if the Rock
Steady Stations acquisition had occurred on March 31, 1996.
The acquisition of the Initial Wichita Stations, Initial Lincoln
Stations and the Rock Steady Stations (collectively, the "Acquisitions") have
been accounted for using the purchase method of accounting. The total cost of
the Acquisitions has been allocated to the tangible and intangible assets
acquired and liabilities assumed based on their respective fair values. The
allocation of the respective purchase prices assumed in the pro forma financial
statements is preliminary. The Company does not expect that the final
allocation of the purchase price will materially differ from the preliminary
allocation.
The pro forma adjustments are based on available information and on
certain assumptions that the Company believes are reasonable under the
circumstances. The pro forma condensed combined financial statements should be
read in conjunction with the Company's Consolidated Financial Statements and
Notes thereto (included in the Form 10KSB, filed June 24, 1996), as well as the
Financial Statements and Notes thereto of the Initial Wichita Stations
(consisting of Marathon Broadcasting Corporation, KFH/KXLK, a division of
Pourtales Radio Partnership, and Midcontinent Broadcasting, Co. of Kansas), the
Initial Lincoln Stations (consisting of KZKX-FM, Inc., KTGL Corporation, KZKX
and KTGL, divisions of Pourtales Radio Partnership) and the Rock Steady
Stations (consisting of Rock Steady, Inc.) (all included in the Prospectus,
which is incorporated herein by reference). The pro forma statement of
operations data are not necessarily indicative of the results that would have
occurred if the IPO, Preferred Stock Offering and the Acquisitions had occurred
on the date indicated, nor are they indicative of the Company's future results
of operations.
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TRIATHLON BROADCASTING COMPANY
PRO FORMA CONDENSED COMBINED BALANCE SHEET
(UNAUDITED)
MARCH 31, 1996
Triathlon
Broadcasting Rock Steady Pro Forma Pro Forma
Company (A) Stations Adjustments(B) Combined
----------- -------- -------------- --------
ASSETS
Current assets................................... $ 38,377,034 $ 117,399 $ (117,399) $35,029,981
(3,347,053)
Property and equipment, net...................... 2,809,119 122,765 -- 2,931,884
Intangible assets, net........................... 19,338,832 813,509 2,439,216 22,591,557
Other assets..................................... 8,856,393 -- -- 8,856,393
------------ ---------- --------------- -----------
$ 69,381,378 $1,053,673 $ (1,025,236) $69,409,815
============ ========== =============== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities.............................. $ 5,817,822 $2,004,091 $ (1,975,654) $ 5,846,259
Deferred taxes................................... 2,501,550 -- -- 2,501,550
Stockholders' Equity............................. 61,062,006 (950,418) 950,418 61,062,006
------------ ---------- --------------- -----------
$ 69,381,378 $1,053,673 $ (1,025,236) $69,409,815
============ ========== =============== ===========
See Notes to Pro Forma Condensed Combined Financial Statements
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NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED BALANCE SHEET
(A) The acquisitions of the Initial Wichita Stations and the Initial Lincoln
Stations and the Preferred Stock Offering closed on September 13, 1995,
January 25, 1996 and March 8, 1996, respectively, and are, therefore,
reflected in the Company's financial position as of March 31, 1996.
(B) To reflect the acquisition of Rock Steady Stations and the preliminary
allocation of the purchase price of $3,347,053 including fees and expenses
of $122,053.
Allocation of
Purchase Price Carrying Value Adjustments
ASSETS
Current assets $ -- $ 117,399(a) $ (117,399)
Property and equipment, net 122,765 122,765 --
Intangible assets, net 3,252,725 813,509 2,439,216
Other assets -- -- --
----------- --------- ----------
Total assets 3,375,490 1,053,673 2,321,817
LIABILITIES
Current liabilities 28,437 2,004,091(b) (1,975,654)
----------- --------- ----------
Net assets acquired $ 3,347,053 $ (950,418) $ 950,418
=========== ========== ==========
(a) Current assets of $117,399 not acquired.
(b) Related party indebtedness of $1,975,654 not acquired.
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TRIATHLON BROADCASTING COMPANY
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
(UNAUDITED)
Triathlon Initial Initial
Broadcasting Wichita Lincoln Rock Steady Pro Forma Pro Forma
Company(A) Stations(B) Stations(C) Stations(D) Adjustments Combined
Net revenue $ 2,723,921 $ 1,690,444 $ 2,871,028 $ 782,066 $ -- $ 8,067,459
LMA/JSA revenue 445,350 -- -- 126,471 (E) (126,471) 445,350
----------- ----------- ----------- ----------- ----------- -----------
TOTAL NET REVENUE 3,169,271 1,690,444 2,871,028 908,537 (126,471) 8,512,809
Operating Expenses:
Station operating expenses 2,723,975 1,786,473 1,739,891 1,098,992 (E) (126,471) 6,811,860
(F) (411,000)
Depreciation and amortization 321,104 260,776 572,444 66,672 (G) (310,793) 910,203
Corporate, general and
administrative expenses 547,891 73,190 216,000 -- (H) 128,919 966,000
Non-cash compensation 273,369 -- -- -- -- 273,369
----------- ----------- ----------- ----------- ----------- -----------
TOTAL OPERATING EXPENSES 3,866,339 2,120,439 2,528,335 1,165,664 (719,345) 8,961,432
----------- ----------- ----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) (697,068) (429,995) 342,693 (257,127) 592,874 (448,623)
Other income (expense) 651 (67,479) (489,504) (4,460) (I) 561,443 651
Interest income 239,089 -- -- -- -- 239,089
Interest expense (590,062) (88,882) (8,322) (126,646) (J) 813,912 --
----------- ----------- ----------- ----------- ----------- -----------
NET LOSS BEFORE
EXTRAORDINARY ITEM ( 1,047,390) $ (586,356) $ (155,133) $ (388,233) $ 1,968,229 (208,883)
=========== =========== =========== ===========
Preferred stock dividend
requirement 314,000 (K) 5,507,296
----------- -----------
NET LOSS BEFORE EXTRAORDINARY
ITEM APPLICABLE TO
COMMON STOCK $(1,361,390) $ (5,716,179)
============ ============
NET LOSS BEFORE
EXTRAORDINARY ITEM
PER COMMON SHARE $ (.44) $ (1.18)
============ ============
Weighted average common
shares outstanding 3,069,144 (L) 4,842,000
See Notes to Pro Forma Condensed Combined Financial Statements
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NOTES TO PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(A) Reflects the historical statement of operations of the Company from
September 13, 1995 through March 31, 1996, including the Initial Wichita
Stations and the Initial Lincoln Stations from their respective dates of
acquisitions of September 13, 1995 and January 25, 1996.
(B) Reflects the historical statement of operations of the Initial Wichita
Stations from April 1, 1995 through September 12, 1995.
(C) Reflects the historical statement of operations of the Initial Lincoln
Stations from April 1, 1995 through January 24, 1996.
(D) Reflects the historical statement of operations of the Rock Steady
Stations for the year ended March 31, 1996.
(E) Prior to its acquisition, the Company had been operating the Rock Steady
Stations under a Joint Sales Agreement ("JSA") since January 29, 1996
which entitled the Company to sell advertising on the Rock Steady
Stations in exchange for a monthly JSA fee. Adjustment to eliminate JSA
fee paid by the Company to the Rock Steady Stations for the period from
January 29, 1996 through March 31, 1996.
(F) To reflect certain cost savings that are being implemented and/or have
been implemented as a result of the combination of stations in Wichita,
Kansas and Lincoln, Nebraska including the elimination of certain
positions and the radio the standardization of salesperson commissions.
There can be no assurance that unforseen developments will not prevent
full realization of the anticipated cost savings associated with the
implementation of such measures.
(G) To reflect increased depreciation and amortization related to the
consummation of the Acquisitions resulting from the purchase price
allocation and changes in accounting policy.
(H) To reflect incremental corporate general and administrative expenses to
be incurred by the Company due to the Initial Wichita Stations, Initial
Lincoln Stations and Rock Steady Stations.
(I) To eliminate non-operating expenses that are not expected to be incurred
by the Company.
(J) To eliminate interest expense that would not have been incurred on a
pro forma basis.
(K) To reflect adjustment for a full year of dividends for the Preferred
Stock Offering.
(L) To reflect adjustment for a full year for the weighted average number of
shares outstanding.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
TRIATHLON BROADCASTING COMPANY
By:/s/ Norman Feuer
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Name: Norman Feuer
Title: Chief Executive Officer
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