SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
MARCH 14, 1997
CAPITAL MEDIA GROUP LIMITED
------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEVADA 0-21051 87-0453100
------ ------- ----------
(State or other (Commission File (I.R.S. Employer
jurisdiction Number) Identification
of incorporation) No.)
25 JAMES STREET
LONDON W1M 5HY, ENGLAND
-----------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: 011-44-171-224-4141
ITEM 5. OTHER EVENTS.
On March 14, 1997, the Company entered into an Agreement and Plan of
Reorganization (the "Agreement"), dated effective as of March 4, 1997, with
Unimedia, S.A., a French company ("Unimedia"), and its shareholders, to acquire
substantially all of the issued and outstanding securities of Unimedia in
exchange for 13,608,885 shares of the Company's authorized but unissued Common
Stock (the "Exchange"), which, if the Exchange is completed, will result in the
current securities holders of Unimedia owning 35.5% of the issued and
outstanding Common Stock of the Company. Additionally, the holders of the
Unimedia securities will also receive certain additional securities of the
Company at a later date relating to the Company's outstanding warrants (in order
to allow such holders to maintain their percentage ownership in the Company).
Consummation of the Exchange is subject to a number of conditions
precedent including but not limited to (i) Unimedia having at the closing of the
Exchange $7.0 million in cash or cash equivalents resulting from new
subscriptions to Unimedia shares by one or more persons in Unimedia made
subsequent to the date of the Agreement, (ii) the execution of the Agreement by
the holders of not less than 90% of Unimedia's outstanding securities, (iii) the
delivery to the Company of Unimedia's audited financial statements for 1995 and
1996, and (iv) the receipt by the Company and Unimedia of fairness opinions from
investment banking firms selected by their respective Boards of Directors.
The Agreement is cancelable by the Company if the holders of not less
than 90% of Unimedia's then outstanding securities have not entered into the
Agreement by March 21, 1997, or, by either party, if the closing of the Exchange
shall not have occurred by March 31, 1997 (or April 4, 1997, if the closing has
commenced by March 31, 1997). Additionally, the Agreement is cancelable by
either party within five days after delivery to the other party of a schedule to
the Agreement which provides information which is material and adverse to the
information previously provided by such party to the other party (in that
regard, the parties have agreed to provide the schedules required by the
Agreement as soon as practicable, but not later than March 21, 1997).
If the Exchange is completed, at a meeting of the Company's Board of
Directors (the "Board") held immediately after the closing of the Exchange, the
Board will take steps to add to the Board four persons who are not currently
directors of the Company and who shall be designated by Unimedia for election to
the Board. At the time of such meeting, the Board of the Company shall consist
of 8 persons, such that as of that Board meeting, the Board shall consist of 12
members. Additionally, the Agreement requires the Company to file a registration
statement covering the Company's securities issued in the Exchange not later
than April 30, 1997 and to use its reasonable efforts to thereafter cause such
registration statement to become effective.
MMP, S.A., acting for its principal, Groupe AB, which owns 3.2 million
shares of the Company's outstanding Common Stock (including 1.6 million shares
purchased in the Company's recently completed private placement), also owns 18%
of Unimedia's outstanding
securities and presently has the right to designate two directors to the Board
(Mark Sillam and Jean-Francois Klein are presently serving on the Board as
designees of Group AB).
In the Company's recently completed private placement, Unimedia
beneficially purchased 4.0 million of the shares of the Company's Common Stock
sold in the Offering, for an aggregate purchase price of $2.0 million. Unimedia
borrowed the funds to make this purchase (for which it pledged as security
certain of its assets unrelated to the Company) from Universal Independent
Holdings Limited, a BVI corporation ("Universal"). Universal has previously made
a guaranty on behalf of the Company to secure payment by the Company of its
obligations to PTT Telecom relating to the agreement to lease transponder
capacity required by the Company to broadcast its television programming in
Germany. For information regarding the Company's recently completed private
placement, see the Company's Current Report on Form 8-K, dated March 3, 1997.
For information regarding the transponder guaranty provided by Universal on
behalf of the Company and for information regarding the assets which the Company
has pledged to Universal to secure its guaranty, see the Company's Quarterly
Report on Form 10-QSB for the quarter ended September 30, 1997.
It is expected that Unimedia will raise the $7.0 million in new
proceeds which it is required to obtain as a condition precedent to the closing
of the Exchange by, in part, selling the shares of Common Stock which it
purchased in the Offering to the new subscribers agreeing to also purchase
interests in Unimedia. It is also anticipated that $2.0 million of the proceeds
raised by Unimedia will be used to repay the above-referenced obligation to
Universal.
Unimedia is engaged in the research and development of computer
software for providing, via multimedia vehicles such as the Internet, new online
services to business users and leisure consumers. In particular, Unimedia has
focused its efforts on seeking to develop interactive software that allows users
to work, shop, communicate, educate, gamble and amuse themselves. In addition,
Unimedia has acquired minority equity positions in other companies having
Internet technologies and applications and has entered into agreements to act as
distributor for certain computer software applications.
The descriptions contained herein of the agreement and the transactions
contemplated thereunder are qualified in their entirety by reference to the
Agreement, which is attached hereto as Exhibit 2.1 and which is incorporated
herein by reference.
2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
2.1 Agreement and Plan of Reorganization dated effective as
of March 4, 1997 by and among the Company, Unimedia
S.A., a French company, and the Unimedia shareholders
who are parties thereto.
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CAPITAL MEDIA GROUP LIMITED
By: /s/ CHARLES KOPPEL
----------------------
Charles Koppel, President
Date: March 24, 1997
4
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
2.1 Agreement and Plan of Reorganization dated effective as of March 4,
1997 by and among the Company, Unimedia S.A., a French company, and
the Unimedia shareholders who are parties thereto.