SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as Permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|X| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
New Frontier Media, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------------
TUESDAY JUNE 18, 9:43 AM EASTERN TIME
Press Release
New Frontier Media Announces Fiscal Year 2002 Year End Results
BOULDER, Colo., June 18 /PRNewswire-FirstCall/ -- New Frontier Media, Inc.
(Nasdaq: NOOF - News), a leader in the electronic distribution of adult
entertainment, announced its results for the year ending March 31, 2002. The
Company reported fiscal 2002 net revenue of $52.4 million, or an 11% decrease
over fiscal 2001 net revenue of $58.6 million. Fiscal 2002 adjusted EBITDA
(earnings before interest, taxes, depreciation, and amortization) for the
Company and its subsidiaries, before restructuring charges of $3.2 million
related to the Company's Internet Group, was reported as $8.3 million, or a 24%
increase over fiscal 2001 EBITDA of $6.7 million.
The Company's Subscription/PPV TV Group reported net revenue of $29.1 million
for the fiscal year ended March 31, 2002, or a 19% increase over fiscal year
2001 net revenue of $24.5 million, and EBITDA of $8.5 million, or a 57% increase
over fiscal year 2001 EBITDA of $5.4 million. The Subscription/PPV TV Group's
EBITDA margin increased from 22% of revenue to 29% of revenue for the 2002
fiscal year as a result of broader distribution of its Pay TV networks.
The Company's Internet Group reported net revenue of $23.2 million for the
fiscal year ended March 31, 2002, or a 32% decrease over fiscal 2001 net revenue
of $34 million, and EBITDA of $5.5 million prior to restructuring costs, or a
21% decrease from $7.0 million for fiscal year 2001. The Internet Group's EBITDA
margin increased from 21% of revenue to 24% of revenue for the 2002 fiscal year
as a result of the elimination of unprofitable traffic acquisition expenditures
and a reduction in overhead related to the Sherman Oaks, California office.
The Company reported a net loss for the fiscal year ended March 31, 2002 of $0.6
million, which included the following non-recurring items: a) a $3.2 million
restructuring charge related to the consolidation of the majority of the
Internet Group's operations to the Company's Boulder, Colorado location; b) $1.7
million of income related to the reversal of the Company's litigation reserve;
and c) $0.3 million of income related to the release of the Company from a
previous service obligation. In comparison, for the fiscal year ended March 31,
2001, the Company reported net income of $3.3 million, which included a $4.1
million tax benefit from historical losses, a $2 million charge against income
for the establishment of a litigation reserve, and an investment write-down of
$0.5 million. Earnings/(loss) per share was reported as a loss of $0.03 per
basic and fully diluted share for the year ended March 31, 2002, as compared to
$0.16 per basic share and $0.14 per fully diluted share for the year ended March
31, 2001.
"New Frontier Media continues to show strong financial results from its core Pay
TV business. In particular, management is pleased with its year-over-year EBITDA
growth of 57%," stated Mark Kreloff, Chairman and Chief Executive Officer of New
Frontier Media.
"The softness in our Internet business is related to the following four areas:
1) the cost of webmaster-sourced traffic rising to a level that resulted in a
negative gross margin; 2) randomly typed adult vanity domain words no longer
defaulting to the "dot com" extension, resulting in significantly lower traffic
to our sites; 3) the proliferation of free content now available through file
sharing services; and 4) the aggressive efforts of competitors showing adult
content before an age-verifying credit card transaction and the proliferation of
hidden and multiple charges without consumers' knowledge or consent. Our new
Internet Group management, headed up by Ken Boenish, is focused on developing
revenue strategies that are: 1) profitable; 2) sustainable; 3) consumer focused
(content and pricing); 4) not solely dependent on third-party webmaster traffic
purchases; and 5) economically viable from the first day of implementation,"
continued Mr. Kreloff.
"The final step in our year long Internet Group restructuring plan is to
co-locate our data center function in a Colorado facility. We expect this move
to result in substantial cost savings in terms of bandwidth, engineering and
equipment. In addition, management believes that greater operating efficiencies
can be achieved by locating this facility closer to our now consolidated Pay TV
and Internet operations," concluded Mr. Kreloff.
Future Outlook
The Company is providing guidance of $43 - 50 million in revenue and $5.5 - 10.0
million of EBITDA for the fiscal year ended March 31, 2003. This guidance does
not give effect to an expected restructuring charge of $4.0 - 4.5 million
anticipated during the first quarter ended June 30, 2002 for the closure of the
Company's data center in Sherman Oaks, California.
The large variance in revenue and EBITDA guidance is due to pending transactions
that may result in further consolidation of the cable and satellite distribution
industries, and additional revenue and EBITDA for the Company.
Consolidated Operating Results
(in 000's except per share amounts)
Twelve Months Ended
March 31
2002 2001
Net Revenue $ 52,435 $ 58,638
Cost of Sales 25,634 29.589
Gross Profit 26,801 29,049
Operating Expenses 27,429 26,506
Other Income/(Expense) 372 (3,474)
Income (Loss) from Continuing Operations (256) (931)
Minority Interest (171) 115
Income Tax (Expense)/Benefit (155) 4,140
Net Income (Loss) (582) 3,324
Basic Earnings per Share ($0.03) $0.16
Diluted Earnings per Share ($0.03) $0.14
Weighted Average Shares Outstanding 21,128 23,063
The Condensed Statement of Operations should be read in conjunction with the
Company's Form 10-K that will be filed with the Securities and Exchange
Commission. To obtain a copy, please contact New Frontier Media, Inc.
New Frontier Media will be conducting its conference call and webcast to discuss
earnings today at 2:15 p.m. Mountain Time. The participant phone number for the
conference call is (800)-240-4186. To participate in the webcast please log on
to www.noof.com and click on Shareholder Info and then Webcasts and Events. A
replay of the conference call will be available for seven days after 5:15 p.m.
Mountain Time on June 18th at (800)-405-2236, access code 477962. The replay
will also be archived on the Corporate web site at www.noof.com .
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward-looking statements are
based on current expectations, estimates and projections made by management. The
Company intends for the forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements. All statements related to
developing Internet revenue strategies that are: profitable, sustainable,
consumer focused, not dependent solely on webmaster traffic purchases and
economically viable from the first day of implementation; expected bandwidth,
engineering and equipment cost savings from moving our data center operations to
a co-location facility in Colorado; and achieving greater operating efficiencies
by locating the data center facility closer to our consolidated Pay TV and
Internet operations and the outcome of any contingencies are forward-looking
statements. Words such as "anticipates", "expects", "intends", "plans",
"believes", "seeks", "estimates", or variations of such words are intended to
identify such forward-looking statements. All forward-looking statements made in
this press release are made as of the date hereof, and the Company assumes no
obligation to update the forward-looking statements included in this news
release whether as a result of new information, future events, or otherwise.
These forward- looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those set forth or implied
by any forward-looking statements. Please refer to the Company's Form 10-K and
other filings with the SEC for additional information regarding risks and
uncertainties, including, but not limited to, the risk factors listed from time
to time in such SEC reports. Copies of these filings are available through the
SEC's electronic data gathering analysis and retrieval system (EDGAR) at
www.sec.gov .
ABOUT NEW FRONTIER MEDIA, INC.
New Frontier Media, Inc. is a leader in the distribution of adult entertainment
content via electronic platforms. The Company delivers the most extensive lineup
of quality programming over the broadest range of electronic means including
cable, satellite, Internet, Broadband and video-on-demand.
The Erotic Networks(TM), the umbrella brand for the Company's subscription and
pay television subsidiary, provides pay-per-view and subscription TV networks to
over 28.5 million cable, DBS (direct broadcast satellite) and C-band households
throughout North America. The Erotic Networks(TM) include Pleasure(TM), TeN(TM),
ETC (Erotic Television Clips)(TM), Extasy(TM), True Blue(TM) and X-Cubed(TM).
These networks represent the widest variety of editing standards available and
are programmed without duplication to offer the most extensive selection of
adult network programming under a single corporate umbrella.
For more information contact Karyn Miller at (303) 444-0900, extension 102, and
please visit our web site at www.noof.com .
FRIDAY JUNE 14, 8:41 AM EASTERN TIME
Press Release
Boulder Court Rejects Bonn Attempt to Order a Special Meeting of Shareholders
Over the July 4th Weekend; Company Cites Obvious Attempt by Bonn To
Disenfranchise the Majority of the Company's Shareholders
BOULDER, Colo., June 14 /PRNewswire-FirstCall/ -- NEW FRONTIER MEDIA, INC.,
(Nasdaq: NOOF - News) reported today that the District Court in Boulder,
Colorado had rejected Edward Bonn's motion for a preliminary injunction to order
the Company to hold a Special Meeting of its Shareholders on Friday, July 5th.
Instead the District Court ordered that the Company hold its Annual Meeting on
August 20th, with a record date of July 9th, all as previously announced and
scheduled by the Company.
In its court papers, the Company argued that Mr. Bonn's attempt to set a meeting
date for the Friday after July 4th was an obvious and transparent attempt to
disenfranchise the voting rights of a majority of the Company's shareholders
because the meeting date would not give those shareholders holding their shares
in brokerage accounts (i.e., in street name) enough time to be able to vote at
and participate in the meeting. A July 5th meeting date would also force
out-of-town shareholders to choose between attending the meeting or giving up
their July 4th holiday.
Moreover, Mr. Bonn failed to give any compelling reason for holding a Special
Meeting to elect directors only a few weeks before the Annual Meeting of
Shareholders on August 20th at which all directors must stand for election.
"We filed our preliminary proxy statement with the Securities and Exchange
Commission today and look forward to letting the shareholders decide on August
20th whether they want to support the achievements of current management in the
Pay TV arena, most notably extending our reach to over 28 million addressable
households, or to support the legacy of a failed Internet strategy," said Mark
Kreloff, Chairman and Chief Executive Officer of New Frontier Media, Inc.
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward-looking statements are
based on current expectations, estimates and projections made by management. The
Company intends for the forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements. All forward-looking statements
made in this press release are made as of the date hereof, and the Company
assumes no obligation to update the forward-looking statements included in this
news release whether as a result of new information, future events, or
otherwise. The forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those set forth or
implied by any forward-looking statements. Please refer to the Company's Form
10-K and other filings with the SEC for additional information regarding risks
and uncertainties, including, but not limited to, the risk factors listed from
time to time in such SEC reports. Copies of these filings are available through
the SEC's electronic data gathering analysis and retrieval system (EDGAR) at
www.sec.gov .
ABOUT NEW FRONTIER MEDIA, INC.
New Frontier Media, Inc. is a leader in the distribution of adult entertainment
content via electronic platforms. The Company delivers the most extensive lineup
of quality programming over the broadest range of electronic means including
cable, satellite, Internet, Broadband and video-on-demand.
The Erotic Networks(TM), the umbrella brand for the Company's subscription and
pay television subsidiary, provides pay-per-view and subscription TV networks to
over 28.5 million cable, DBS (direct broadcast satellite) and C-band households
throughout North America. The Erotic Networks(TM) include Pleasure(TM), TeN(TM),
ETC (Erotic Television Clips)(TM), Extasy(TM), True Blue(TM) and X-Cubed(TM).
These networks represent the widest variety of editing standards available and
are programmed without duplication to offer the most extensive selection of
adult network programming under a single corporate umbrella.
Interactive Gallery, Inc. ("IGallery"), the Company's Internet subsidiary,
operates in the adult Internet market serving both the consumer and webmaster
markets. IGallery designs and manages membership-based web sites for the
consumer market. In addition, IGallery offers products and services to the
webmaster market.
For more information contact Mark Kreloff at (303) 444-0900, extension 105, and
please visit our web site at www.noof.com .
FRIDAY JUNE 14, 8:42 AM EASTERN TIME
Press Release
Bonn and Weber Go to Court To Stop New Frontier Media, Inc. From Donating Old
Computers to Charity; Court Permits Old Computers to be Reformatted As Long As
Back-ups Are Made
BOULDER, Colo., June 14 /PRNewswire-FirstCall/ -- New Frontier Media, Inc.,
(Nasdaq: NOOF - News) reported today that Messrs. Bonn and Weber had gone to
court to stop the Company from donating two-dozen Pentium 1 computers to
charity. The computers were unused and in storage for approximately two years
and were about to be given to needy families who could not afford to purchase a
computer. The decision to donate the computers to charity was made prior to the
filing of the Company's lawsuit against Bonn and Weber for fraud and
self-dealing.
Bonn and Weber alleged, without foundation, that the computers may contain
"important evidence" relating to the Company's lawsuit against them for fraud
and self-dealing, even though they knew that Mr. Weber himself had implemented
the Company's current back-up procedures for these computers. The Court declined
to issue an order preventing the computers from being reformatted so that the
computers could be donated to charity. The Court, instead, permitted the
reformatting as long as a mirror image back up of the information on the
computers was made.
"To stop the Company from donating computers to charity that have not been used
in years on the unsupported pre-text that they may contain important evidence
regarding Bonn and Weber's fraud and self-dealing is not only a cheap shot
against the Company, but a revealing example of the depths Bonn and Weber will
go to advance their agenda to take control of the Internet division, which they
grossly mismanaged in the first place," stated Mark Kreloff, Chairman and Chief
Executive Officer of New Frontier Media, Inc.
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward-looking statements are
based on current expectations, estimates and projections made by management. The
Company intends for the forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements. All forward-looking statements
made in this press release are made as of the date hereof, and the Company
assumes no obligation to update the forward-looking statements included in this
news release whether as a result of new information, future events, or
otherwise. The forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those set forth or
implied by any forward-looking statements. Please refer to the Company's Form
10-K and other filings with the SEC for additional information regarding risks
and uncertainties, including, but not limited to, the risk factors listed from
time to time in such SEC reports. Copies of these filings are available through
the SEC's electronic data gathering analysis and retrieval system (EDGAR) at
www.sec.gov .
ABOUT NEW FRONTIER MEDIA, INC.
New Frontier Media, Inc. is a leader in the distribution of adult entertainment
content via electronic platforms. The Company delivers the most extensive lineup
of quality programming over the broadest range of electronic means including
cable, satellite, Internet, Broadband and video-on-demand.
The Erotic Networks(TM), the umbrella brand for the Company's subscription and
pay television subsidiary, provides pay-per-view and subscription TV networks to
over 28.5 million cable, DBS (direct broadcast satellite) and C-band households
throughout North America. The Erotic Networks(TM) include Pleasure(TM), TeN(TM),
ETC (Erotic Television Clips)(TM), Extasy(TM), True Blue(TM) and X-Cubed(TM).
These networks represent the widest variety of editing standards available and
are programmed without duplication to offer the most extensive selection of
adult network programming under a single corporate umbrella.
Interactive Gallery, Inc. ("IGallery"), the Company's Internet subsidiary,
operates in the adult Internet market serving both the consumer and webmaster
markets. IGallery designs and manages membership-based web sites for the
consumer market. In addition, IGallery offers products and services to the
webmaster market.
For more information contact Karyn Miller at (303) 444-0900, extension 102, and
please visit our web site at www.noof.com .
FRIDAY JUNE 14, 12:05 PM EASTERN TIME
Press Release
New Frontier Media, Inc. Announces the Nomination of Two New Board Members
BOULDER, Colo., June 14 /PRNewswire-FirstCall/ -- New Frontier Media, Inc.
(Nasdaq: NOOF - News), a leader in the electronic distribution of adult
entertainment, announced the nomination of two new board members to its slate of
directors to be presented for a vote by the shareholders at its annual
shareholder meeting to be held on August 20, 2002. Upon the recommendation of
its Nominating Committee, New Frontier Media has chosen Dr. Skender Fani and Ms.
Melissa Hubbard to join its slate of directors.
Dr. Fani is a leading European-based sports and entertainment attorney,
representing many of Europe's top athletes and entertainers for over 20 years.
In addition, he is a consultant to several major media and television companies
in Europe. Dr. Fani is also the personal advisor to several international soccer
teams and their owners, including teams such as FC Barcelona, Juventus Torino,
Dynamo Kiev, and MAGNA Austria.
Dr. Fani is currently the Chairman of the Board of Otis Elevator -- Austria as
well as a member of the Board of Directors of M.I. Drilling Fluids -- Europe,
formerly Dresser Industries, and Consulier Engineering, Inc., a Florida based
Nasdaq company. He is also on the Board of several diversified entertainment
companies based in Europe.
Ms. Hubbard was previously senior vice president and general counsel, as well as
an advisor to the Executive Committee, of Daniels & Associates, L.P. ("Daniels")
in Denver, Colorado. Daniels is a leader in financial services to the media,
Internet and telecommunications industries worldwide, and is a major force in
the U.S. mergers and acquisitions market with more than $95 billion in total
transactions.
As senior vice president and general counsel to Daniels, Ms. Hubbard was
responsible for managing the company's legal affairs, providing legal counsel,
and maintaining policies and practices to ensure compliance with federal and
state laws. Ms. Hubbard's expertise includes telecommunications, securities,
mergers and acquisitions, franchise licensing, venture capital financing and
arbitration, as well as corporate, partnership and non-profit law.
Prior to joining Daniels in 1992, Ms. Hubbard was a partner at Holland & Hart,
Denver's largest full-service law firm. Before joining Holland & Hart in 1982,
she worked in the Office of General Counsel in Washington, D.C. for the American
Petroleum Institute.
"Dr. Fani brings a wealth of international experience to New Frontier Media that
will play an important role in our efforts to secure cross-border distribution
from European media companies," said Mark Kreloff, Chairman and Chief Executive
Officer of New Frontier Media, Inc.
"Ms. Hubbard's extensive M&A and securities law expertise, as well as her strong
cable, Internet, and entertainment industry experience, will be a tremendous
asset to our Board of Directors," continued Mr. Kreloff.
"Dr. Fani's broad-based experience in the media and entertainment industries in
Europe should provide valuable assistance to the Company as it evaluates
strategic partnership arrangements and other growth opportunities in the
European market. Additionally, Ms. Hubbard's knowledge of the broadcast,
Internet, and cable industries, as well as her experience with mergers and
acquisitions, should serve the Company well as it pursues its business plan in
its core growth areas. I look forward to working with both Dr. Fani and Ms.
Hubbard," stated Mr. Alan Isaacman, a current member of the Company's board of
directors.
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward-looking statements are
based on current expectations, estimates and projections made by management. The
Company intends for the forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements. All statements related to Ms.
Hubbard being a tremendous asset to our Board and Dr. Fani's experience playing
an important role in our efforts to secure distribution from European media
companies and the outcome of any contingencies are forward looking statements.
Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks,"
"estimates," or variations of such words are intended to identify such
forward-looking statements. All forward-looking statements made in this press
release are made as of the date hereof, and the Company assumes no obligation to
update the forward-looking statements included in this news release whether as a
result of new information, future events, or otherwise. The forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those set forth or implied by any
forward-looking statements. Please refer to the Company's Form 10-K and other
filings with the SEC for additional information regarding risks and
uncertainties, including, but not limited to, the risk factors listed from time
to time in such SEC reports. Copies of these filings are available through the
SEC's electronic data gathering analysis and retrieval system (EDGAR) at
www.sec.gov .
ABOUT NEW FRONTIER MEDIA, INC.
New Frontier Media, Inc. is a leader in the distribution of adult entertainment
content via electronic platforms. The Company delivers the most extensive lineup
of quality programming over the broadest range of electronic means including
cable, satellite, Internet, Broadband and video-on-demand.
The Erotic Networks(TM), the umbrella brand for the Company's subscription and
pay television subsidiary, provides pay-per-view and subscription TV networks to
over 28.5 million cable, DBS (direct broadcast satellite) and C-band households
throughout North America. The Erotic Networks(TM) include Pleasure(TM), TeN(TM),
ETC (Erotic Television Clips)(TM), Extasy(TM), True Blue(TM) and X-Cubed(TM).
These networks represent the widest variety of editing standards available and
are programmed without duplication to offer the most extensive selection of
adult network programming under a single corporate umbrella.
For more information contact Mark Kreloff at (303) 444-0900, extension 105, and
please visit our web site at www.noof.com .
TUESDAY MAY 28, 1:49 PM EASTERN TIME
Press Release
New Frontier Media, Inc. Files Lawsuit Against Directors Bonn and Weber Alleging
Fraud and Breaches of Fiduciary Duty; Uncovers Similar Lawsuit From Bonn's
Previous Public Company Experience
BOULDER, Colo., May 28 /PRNewswire-FirstCall/ -- New Frontier Media, Inc.,
(Nasdaq: NOOF - News) reported today that upon the recommendation of its Special
Committee, it has filed a Civil Complaint consisting of 13 separate causes of
action in the California Superior Court for Los Angeles County against: (i)
directors and former officers Edward J. Bonn and Bradley A. Weber; (ii) Jerry D.
Howard, the former Chief Financial Officer of its subsidiaries Interactive
Gallery, Inc. ("IGI"), Interactive Telecom Network, Inc. ("ITN") and Card
Transactions, Inc. ("CTI"); and (iii) Response Telemedia, Inc., a California
corporation owned by Mr. Bonn.
The Complaint's allegations arise, in part, out of the Company's purchase of 100
percent of the issued and outstanding shares of IGI and ITN and 90 percent of
the issued and outstanding shares of CTI from the individual defendants on
October 27, 1999. The Complaint alleges that, from early 1999 to the date of the
closing, the defendants knowingly made material misrepresentations or omissions
regarding IGI's business and financial results and prospects for the purpose of
inducing the Company to purchase the defendants' stock holdings of IGI, ITN and
CTI.
The Complaint also alleges that, subsequent to the Company's purchase of IGI,
ITN and CTI, Messrs. Bonn, Weber and Howard (as directors and/or officers) each
breached their fiduciary duties owed to the Company and its subsidiaries. Such
allegations arise out of the individual defendants' gross mismanagement of IGI,
ITN and CTI and their concealment of marketing, operational and financial
information that would have allowed the Company to discover their actions. Such
allegations also arise out of self-dealing transactions that benefited, among
others, Mr. Bonn's company RTI.
The Complaint seeks rescission of the purchase of the IGallery Companies as well
as monetary damages in an amount to be proven at trial.
The Complaint also reveals that Mr. Bonn had a similar lawsuit filed against him
relating to his sale of a small private company to a public company, Independent
Telecom Group Inc. ("ITG"), and his subsequent alleged breach of his fiduciary
duty as an officer and director of that company. In the prior lawsuit against
Mr. Bonn, it was alleged that he benefited himself through fraud and
self-dealing. According to the ITG Complaint, Mr. Bonn: (i) misrepresented the
value of the business he sold to ITG; (ii) misrepresented the operating results
of the business after he sold it to ITG so as to cause unlawful payments to
himself and his affiliates under a promissory note; and (iii) caused the
business sold to ITG to pay expenses after the sale that were personal
obligations of Mr. Bonn's affiliates.
According to a Form 10-QSB Report filed by ITG, after Mr. Bonn sold his phone
sex business to ITG, ITG experienced such dramatic declines that it was required
under generally accepted accounting principles to effect a 100% write-off of the
goodwill and a 50% write-off of the asset values.
Mark Kreloff, Chairman and Chief Executive Officer of the Company, stated that
"Mr. Bonn's sudden rush to replace the Company's Board of Directors with his own
nominees is a transparent and obvious attempt by him to cover up his
questionable past dealings. With today's filing of 13 separate causes of action,
Mr. Bonn will now have to answer to shareholders about his prior activities."
The Company also reported that it had amended its Rights Agreement to delay the
effectiveness of its Distribution Date until 30 days from May 26, 2002 to
preserve the Company's options under its Rights Agreement in the event it is
determined that the Company's poison pill has been triggered by the actions of
Messrs. Bonn and Bradley Weber.
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward-looking statements are
based on current expectations, estimates and projections made by management. The
Company intends for the forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements. All forward-looking statements
made in this press release are made as of the date hereof, and the Company
assumes no obligation to update the forward-looking statements included in this
news release whether as a result of new information, future events, or
otherwise. The forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those set forth or
implied by any forward-looking statements. Please refer to the Company's Form
10-K and other filings with the SEC for additional information regarding risks
and uncertainties, including, but not limited to, the risk factors listed from
time to time in such SEC reports. Copies of these filings are available through
the SEC's electronic data gathering analysis and retrieval system (EDGAR) at
www.sec.gov .
ABOUT NEW FRONTIER MEDIA, INC.
New Frontier Media, Inc. is a leader in the distribution of adult entertainment
content via electronic platforms. The Company delivers the most extensive lineup
of quality programming over the broadest range of electronic means including
cable, satellite, Internet, Broadband and video-on-demand. The Erotic
Networks(TM), the umbrella brand for the Company's subscription and pay
television subsidiary, provides pay-per-view and subscription TV networks to
over 27 million cable, DBS (direct broadcast satellite) and C-band households
throughout North America. The Erotic Networks(TM) include Pleasure(TM), TeN(TM),
ETC (Erotic Television Clips)(TM), Extasy(TM), True Blue(TM) and X-Cubed(TM).
These networks represent the widest variety of editing standards available and
are programmed without duplication to offer the most extensive selection of
adult network programming under a single corporate umbrella. IGallery, the
Company's Internet subsidiary, operates in the adult Internet market serving
both the consumer and webmaster markets. IGallery designs and manages
membership-based web sites for the consumer market. In addition, IGallery offers
products and services to the webmaster market.
For more information contact Peter Shankman at (303)444-0900 ext. 330 and please
visit our web site at www.noof.com .
MONDAY APRIL 29, 9:46 AM EASTERN TIME
Press Release
New Frontier Media, Inc. Announces Annual Meeting of Its Shareholders And
Amendment to Rights Agreement to Delay Distribution Date
BOULDER, Colo., April 29 /PRNewswire-FirstCall/ -- NEW FRONTIER MEDIA, INC.
(Nasdaq: NOOF - news) reported today that its Annual Meeting of Shareholders
will be held on August 20, 2002 this year and that the record date for the
Annual Meeting will be July 9, 2002. Although the Company has traditionally held
its Annual Meeting of Shareholders in September of each year, in order to
accommodate Mr. Edward Bonn's recent request to have the Company's shareholders
vote at a Special Meeting, the motions that Mr. Bonn requested be considered at
the Special Meeting will be considered at the Annual Meeting to the extent
appropriate.
The Company also reported that it had amended its Rights Agreement to delay the
effectiveness of its Distribution Date until 30 days from April 26, 2002 to
preserve the Company's options under its Rights Agreement in the event it is
determined that the Company's poison pill has been triggered by the actions of
Messrs. Bonn and Bradley Weber.
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward-looking statements are
based on current expectations, estimates and projections made by management. The
Company intends for the forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates", or variations
of such words are intended to identify such forward-looking statements. All
forward-looking statements made in this press release are made as of the date
hereof, and the Company assumes no obligation to update the forward-looking
statements included in this news release whether as a result of new information,
future events, or otherwise. The forward- looking statements are subject to
risks and uncertainties that could cause actual results to differ materially
from those set forth or implied by any forward-looking statements. Please refer
to the Company's Form 10-K and other filings with the SEC for additional
information regarding risks and uncertainties, including, but not limited to,
the risk factors listed from time to time in such SEC reports. Copies of these
filings are available through the SEC's electronic data gathering analysis and
retrieval system (EDGAR) at www.sec.gov.
ABOUT NEW FRONTIER MEDIA, INC.
New Frontier Media, Inc. is the fastest growing distributor of Adult
Entertainment today. The Company delivers the most extensive lineup of quality
programming over the broadest range of electronic means including cable,
satellite, Internet, Broadband and video-on-demand.
The Erotic Networks(TM), the umbrella brand for the Company's subscription and
pay television subsidiary, provides pay-per-view and subscription TV networks to
over 26 million cable, DBS (direct broadcast satellite) and C-band households
throughout North America. The Erotic Networks(TM) include Pleasure(TM), TeN(TM),
ETC (Erotic Television Clips)(TM), Extasy(TM), True Blue(TM) and X-Cubed(TM).
These networks represent the widest variety of editing standards available and
are programmed without duplication to offer the most extensive selection of
adult network programming under a single corporate umbrella.
IGallery, the Company's Internet subsidiary, is a leader in the adult Internet
market serving both the consumer and webmaster markets. IGallery designs and
manages its own membership-based web sites for the consumer market. In addition,
IGallery offers a wide range of products and services to the webmaster market.
IGallery's own Internet network infrastructure enables the delivery of live and
on-demand video events to millions of Internet users.
For more information contact Karyn Miller, Chief Financial Officer, at (303)
444-0900, extension 102, and please visit our web site at www.noof.com.
Wednesday April 3, 8:35 am Eastern Time
Press Release
New Frontier Media, Inc. Responds to the Request for a Special Meeting of its
Shareholders
BOULDER, Colo., April 3 /PRNewswire-FirstCall/ -- New Frontier Media, Inc.,
(Nasdaq: NOOF - news) reported today that Edward Bonn, a director of the
Company, has made a public announcement that he intends to call a special
meeting of the Company's shareholders. The stated purpose of the meeting is to
replace the Board of Directors and to rescind the Company's Rights Plan, also
known as a poison pill, that was adopted this past November. Mr. Bonn and
Director Bradley A. Weber previously attempted on March 20, 2002 to remove Chief
Executive Officer Mark Kreloff as CEO and to appoint a special committee headed
by Mr. Bonn to operate the Company while a search was conducted for a new CEO.
The Company's Board of Directors rejected Messrs. Bonn's and Weber's proposal
and instead established an Independent Special Committee of the Board to
investigate, among other things, the activities of Messrs. Bonn and Weber
relating to their prior management of Interactive Gallery, Inc., the Company's
Internet subsidiary, and whether, by their actions, they have triggered the
Company's poison pill.
The Independent Special Committee consists of Executive Vice President and Board
member Michael Weiner, and Board members Koung Wong and Hiram J. Woo. The
Independent Special Committee has retained one of the world's leading experts on
matters of directors' responsibilities and corporate governance -- Mr. Dennis
Block of the law firm Cadwalader, Wickersham & Taft.
Mark Kreloff, Chairman and Chief Executive Officer of the Company, stated "Since
the Board of Directors has refused to turn the Company over to Mr. Bonn, Mr.
Bonn has decided to call a special meeting to deflect the Independent Special
Committee's investigation into his activities in running the Company's Internet
division."
Mr. Bonn is also seeking to remove the Company's poison pill even though the
poison pill was adopted in November 2001 by a unanimous vote of the Board of
Directors, including both Mr. Bonn and Mr. Weber. Mr. Kreloff stated "It's hard
to imagine how Mr. Bonn could vote for the poison pill to protect the
shareholders just a few months ago and now that Mr. Bonn and Mr. Weber may have
triggered it, they want to take that protection away from the shareholders they
are supposed to protect."
Mr. Kreloff also stated, "It is unfortunate that Mr. Bonn and Mr. Weber have
chosen to publicly debate the leadership of the Company. While the management
and Board may run the Company, the shareholders are the true owners of the
Company. I will therefore continue to operate the business, unimpeded by Mr.
Bonn's and Mr. Weber's reckless behavior, in a manner that maximizes shareholder
value. This will include a thorough investigation of their conduct while
managing Interactive Gallery, Inc."
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward-looking statements are
based on current expectations, estimates and projections made by management. The
Company intends for the forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements. Words such as "anticipates",
"expects", "intends", "plans", "believes", "seeks", "estimates", or variations
of such words are intended to identify such forward-looking statements. All
forward-looking statements made in this press release are made as of the date
hereof, and the Company assumes no obligation to update the forward-looking
statements included in this news release whether as a result of new information,
future events, or otherwise. The forward-looking statements are subject to risks
and uncertainties that could cause actual results to differ materially from
those set forth or implied by any forward-looking statements. Please refer to
the Company's Form 10-K and other filings with the SEC for additional
information regarding risks and uncertainties, including, but not limited to,
the risk factors listed from time to time in such SEC reports. Copies of these
filings are available through the SEC's electronic data gathering analysis and
retrieval system (EDGAR) at www.sec.gov .
ABOUT NEW FRONTIER MEDIA, INC.
New Frontier Media, Inc. is the fastest growing distributor of Adult
Entertainment today. The Company delivers the most extensive lineup of quality
programming over the broadest range of electronic means including cable,
satellite, Internet, Broadband and video-on-demand.
The Erotic Networks(TM), the umbrella brand for the Company's subscription and
pay television subsidiary, provides pay-per-view and subscription TV networks to
over 26 million cable, DBS (direct broadcast satellite) and C-band households
throughout North America. The Erotic Networks(TM) include Pleasure(TM), TeN(TM),
ETC (Erotic Television Clips)(TM), Extasy(TM), True Blue(TM) and X-Cubed(TM).
These networks represent the widest variety of editing standards available and
are programmed without duplication to offer the most extensive selection of
adult network programming under a single corporate umbrella.
IGallery, the Company's Internet subsidiary, is a leader in the adult Internet
market serving both the consumer and webmaster markets. IGallery designs and
manages its own membership-based web sites for the consumer market. In addition,
IGallery offers a wide range of products and services to the webmaster market.
IGallery's own Internet network infrastructure enables the delivery of live and
on-demand video events to millions of Internet users.
For more information contact Peter Shankman, at (303) 444-0900, extension 330,
and please visit our web site at www.noof.com .