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): January 18, 2002
MEDIABAY, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 1-13469 65-0429858
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2 Ridgedale Avenue, Suite 300, Cedar Knolls, New Jersey 07927
(Address of principal executive offices)
Registrant's telephone number, including area code: (973) 539-9528
Item 5. Other Events.
MediaBay, Inc. is filing this report to report the following events:
1. On January 18, 2002, Evan Herrick, a principal shareholder of the
Registrant, exchanged $2,500,000 principal amount of a $3,000,000 principal
amount convertible note of MediaBay, Inc. (the "Note") in exchange for
25,000 shares of Series A Preferred Stock of MediaBay (the "Preferred
Shares"), having a liquidation preference of $2,500,000. The Preferred
Share dividend rate of 9% ($9.00 per share) is the same as the interest
rate of the Note, and is payable in additional Preferred Shares, shares of
common stock of MediaBay or cash, at the holder's option, provided that if
the holder elects to receive payment in cash, the payment will accrue until
MediaBay is permitted to make the payment under its existing credit
facility. The conversion rate of the Preferred Shares is the same as the
conversion rate of the Note. The Preferred Shares vote together with the
Common Stock as a single class on all matters submitted to stockholders for
a vote, and certain matters require the majority vote of the Preferred
Shares. The holder of each Preferred Shares shall have a number of votes
for each Preferred Share held multiplied by a fraction, the numerator of
which is the liquidation preference and the denominator of which is $1.75
2. The Registrant has determined that, as of the fiscal year ended December
31, 2001, MediaBay's deferred income tax asset will increase by $4,200,000.
3. The unaudited pro forma consolidated balance sheet as of November 30, 2001
presented below in this item 5 illustrates the effects of the foregoing
matters on MediaBay's balance sheet as of November 30, 2001, as if they had
occurred prior to such date. In the opinion of management, the interim
unaudited balance sheet includes all material adjustments, all of which are
of a normal recurring nature, necessary to present fairly the Company's
financial position for the period presented. However, because the balance
sheet is unaudited, it is subject to adjustment.
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MEDIABAY, INC.
Pro Forma Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)
Historical Pro Forma Pro-Forma
November 30, Adjustments November 30,
2001 Notes 2001
------------ ----------- ------------
Assets
Current assets:
Cash and cash equivalents $ -- $ --
Accounts receivable, net of allowances for sales returns and
doubtful accounts of $4,394 5,042 5,042
Inventory 3,964 3,964
Prepaid expenses and other current assets 1,042 1,042
Royalty advances 1,530 1,530
Deferred member acquisition costs - current 3,608 3,608
Deferred income taxes - current 550 550
-------- -------- --------
Total current assets 15,736 15,736
Fixed assets, net of accumulated depreciation of $429 484 484
Deferred member acquisition costs - non-current 1,615 1,615
Non-current prepaid expenses and other assets 16 16
Deferred income taxes - non-current 12,450 4,200 16,650
Other intangibles, net 2,456 2,456
Goodwill, net 8,692 8,692
-------- -------- --------
$ 41,449 4,200 $ 45,649
======== ======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 13,551 $ 13,551
Current portion - long-term debt 8,980 8,980
-------- -------- --------
Total current liabilities 22,531 22,531
--------
Long-term debt 9,984 (2,500) (1) 7,484
-------- -------- --------
Common stock subject to contingent put rights 4,550 4,550
Preferred stock, no par value, authorized 5,000,000 shares; no
shares issued and outstanding 2,500 (1) 2,500
Common stock; no par value, authorized 150,000,000 shares;
issued and outstanding 13,861,866 at September 30, 2001 and
December 31, 2000 93,462 93,462
Contributed capital 4,081 4,081
Accumulated deficit (93,159) 4,200 (2) (88,959)
-------- -------- --------
Total common stockholders' equity 4,384 6,700 11,084
-------- -------- --------
$ 41,449 $ 4,200 $ 45,649
======== ======== ========
Notes to Pro Forma Consolidated Balance Sheet as of November 30, 2001:
(1) Reflects exchange of $2,500 principal amount of a $3,000 principal
amount convertible note for 25,000 shares of Series A Preferred Stock.
(See Item5. Other Events. 1. in this Filing.)
(2) Reflects adjustment for increase in deferred tax asset. (See Item5.
Other Events. 2. in this Filing.)
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Item 7. Financial Statements and Exhibits
(c) Exhibits.
3.1 Articles of Amendment to Articles of Incorporation of the Registration
filed with the Department of State of the State of Florida on January
18, 2002.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MEDIABAY, INC.
By: /s/ John F. Levy
----------------------------
Executive Vice President and
Chief Financial Officer
Date: January 18, 2002
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Exhibit Index
No. Description
--- -----------
3.1 Articles of Amendment to Articles of Incorporation of Registrant filed with
the Department of State of the State of Florida on January 18, 2002.
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