UNITED STATES
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): August 31, 2005
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Avenue Entertainment Group, Inc
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(Exact name of registrant as specified in its charter)
Delaware 001-12885 95-4622429
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
777 Westchester Avenue, White Plains, New York 10604
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (914) 249-9700
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Brokaw Purchase
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On September 2, 2005, Avenue Entertainment Group, Inc. (the "Company"), Avenue
Pictures, Inc., a wholly owned subsidiary of the Company ("Avenue Pictures"),
Cary Brokaw, and Cary Brokaw Productions, Inc. ("Brokaw Productions"), a
corporation wholly owned by Cary Brokaw, entered into an Asset Purchase
Agreement (the "Brokaw Agreement"), and completed the asset purchase and sale
described in the Brokaw Agreement (the "Brokaw Purchase"). The Brokaw Agreement
is attached as Exhibit 2.1 to this Report.
On September 2, 2005, Cary Brokaw resigned as a director of the Company, and as
the Company's President and Chief Executive and Financial Officer. Cary Brokaw
also resigned prior to completion of the Brokaw Purchase as a director and
officer of the following entities, each of which is a direct or indirect wholly
owned subsidiary of the Company: Avenue Pictures, Black Coffee Productions,
Inc., Grafasi, Inc., Shadow and Light Productions, Inc., TCB Productions, Inc.,
and LCA Acquisition Subsidiary.
Under the terms of the Brokaw Agreement, (1) Avenue Pictures transferred certain
of its assets to Brokaw Productions, (2) Avenue Pictures assigned certain of its
liabilities to Brokaw Productions, and (3) Brokaw Productions granted Avenue
Pictures a right to certain of the revenues that Brokaw Productions may be
entitled to receive in the future related to selected assets transferred by
Avenue Pictures to Brokaw Productions pursuant to the Brokaw Agreement. The
assets transferred to Brokaw Productions included Avenue Pictures rights in
certain theatrical and cable motion picture projects, including all of Avenue
Picture's rights under various producer agreements. In addition, the assets also
included Avenue Picture's rights to various scripts (including options to
purchase or develop various scripts), which may in the future become motion
picture or other entertainment projects, as well as certain of Avenue Picture's
"First Look" rights with respect to various entertainment projects. Brokaw
Productions also acquired various office equipment, furniture, and fixtures so
that it could continue Avenue Picture's business that related to the purchased
assets.
The terms of the Brokaw Agreement require Cary Brokaw to pay the Company a
percentage of any proceeds he receives as a result of any future sale of Brokaw
Productions or any registered initial public offering of Brokaw Production's
equity securities. Cary Brokaw also transferred 711,250 shares of the Company's
common stock to Avenue Pictures, and delivered to the Company for cancellation
all options held by him to purchase shares of the Company's common stock. The
Company also agreed to issue Cary Brokaw a new option to purchase 500,000 shares
of the Company's common stock, at a purchase price of $0.50 per share of Company
common stock. This stock option was issued as described below. Brokaw
Productions did not pay any cash or cash equivalents as consideration for the
Brokaw Purchase.
The Brokaw Agreement also requires the Company and Avenue Pictures to change
their corporate names and to cease all use of the names "Avenue Entertainment
Group," "Avenue Pictures," and all other similar names, trademark, brand, and
logos, as soon as practicable after September 2, 2005.
In connection with the Brokaw Agreement, the Company also entered into a Voting
Agreement, dated as of September 2, between the Company and Cary Brokaw, which
agreement provides that Cary Brokaw will vote all of the shares of the Company's
common stock that he owns in accordance with the recommendation of the Company's
board of directors. This Voting Agreement will terminate no later than September
2, 2007.
The foregoing summary of the Brokaw Agreement and the Voting Agreement is not
complete and is qualified in its entirety by reference to the complete text of
the Brokaw Agreement and the Voting Agreement, which are filed as Exhibits 2.1
and 10.1 to this current report on Form 8-K and which is incorporated by
reference.
As required by the Brokaw Agreement, effective on September 2, 2005, the Company
granted Cary Brokaw an option to purchase shares of its common stock pursuant to
a Stock Option Agreement between the Company and Cary Brokaw (the "Brokaw Stock
Option Agreement"). Under the terms of the Brokaw Stock Option Agreement, the
Company issued Cary Brokaw a fully vested option to purchase 500,000 shares of
the Company's common stock, at a purchase price of $0.50 per share of Company
common stock. The Company did not register this stock option with the Securities
and Exchange Commission, and is issuing this stock option to Cary Brokaw under
the exemption from registration provided by Section 4(2) of the Securities Act
of 1933, as amended (the "Act"), as a sale of securities not involving a public
offering. Cary Brokaw may require the Company to register the shares subject to
his option pursuant to the Act.
The foregoing summary of the Brokaw Stock Option Agreement is not complete and
is qualified in its entirety by reference to the complete text of the Brokaw
Stock Option Agreement, which is filed as Exhibit 10.2 to this current report on
Form 8-K and which is incorporated by reference.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
The response to Item 1.01 above is incorporated herein by reference.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
The response to Item 1.01 above is incorporated by reference.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS
(b)
On September 2, 2005, in connection with the Brokaw Purchase, the Company
accepted the resignation of Cary Brokaw as a director of the Company and as the
Company's President and Chief Executive and Financial Officer. Cary Brokaw has
not resigned as a director or officer of the Company because of a disagreement
with the Company on any matter relating to the Company's operations, policies,
or practices, nor was Cary Brokaw removed from the Company's board of directors
for cause.
On September 2, 2005, in connection with the Brokaw Purchase, the Company
accepted the resignation of Sheri L. Halfon as a director of the Company and as
a Senior Vice President of the Company. Sheri Halfon has not resigned as a
director or officer of the Company because of a disagreement with the Company on
any matter relating to the Company's operations, policies, or practices, nor was
Sheri Halfon removed from the Company's board of directors for cause.
On August 31, 2005, Michael Hammer resigned as a director of the Company. Mr.
Hammer has not resigned as a director of the Company because of any disagreement
with the Company on any matter relating to the Company's operations, policies,
or practices, nor was Mr. Hammer removed from the Company's board of directors
for cause.
(c)
Effective upon the resignation of Cary Brokaw as President, Chief Executive
Officer, and Chief Financial Officer on September 2, 2005, the Company's board
of directors appointed Gene Feldman as its new President, Chief Executive
Officer, and Chief Financial Officer. Prior to his appointment as the Company's
new President, Chief Executive Officer, and Chief Financial Officer, Mr. Feldman
was a Director of the Company and served as the Company's Chairman of the Board,
and Mr. Feldman continues to serve the Company in such capacities. Further
information regarding Mr. Feldman, his background, and his contractual
arrangements with the Company can be found in the Company's 10-KSB filed with
the Securities Exchange Commission on April 15, 2005, which is hereby
incorporated by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information:
The financial information required by this item will be filed by
amendment within 71 days after September 2, 2005.
(c) Exhibits:
Exhibit Description
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2.1 Asset Purchase Agreement between Cary Brokaw
Productions Inc., Cary Brokaw, Avenue Pictures, Inc.,
and Avenue Entertainment Group, Inc. dated as of
September 2, 2005
10.1 Voting Agreement dated as of September 2, 2005, by
and among Cary Brokaw ("Brokaw"), Avenue
Entertainment Group, Inc., and Gene Feldman
10.2 Stock Option Agreement between Avenue Entertainment
Group, Inc. and Cary Brokaw dated September 2, 2005
SIGNATURES
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.
Dated: September 7, 2005
By: /s/ Gene Feldman
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Gene Feldman, President & CEO