Document/Exhibit Description Pages Size
1: 8-K Current Report 6 28K
2: EX-2.3 Plan of Acquisition, Reorganization, Arrangement, 15 50K
Liquidation or Succession
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): July 19, 2001
TOTAL FILM GROUP, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-30027 13-3851302
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
9107 WILSHIRE BOULEVARD, SUITE 475, BEVERLY HILLS, CA 90210
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (310) 275-8404
ITEM 2. DISPOSITION OF ASSETS
In June 2001 Total Creative, Inc. ("Total Creative") and Total Film Group,
Inc. ("Total Film") entered into an agreement to sell substantially all of the
assets of Total Creative, a wholly owned subsidiary of Total Film, to Viridian
Entertainment ("Viridian"), a California corporation controlled by Gerald Green,
a former officer and director of Total Film and Total Creative. These assets
consisted of the following: equipment, personal property, appurtenances,
accessories, furnishings, fixtures, contracts, contract rights, tangible,
intangible, and other property owned by Total Creative or installed at the
premises in the Beverly Hills, California, office. Viridian will also have the
use of the name "Total Creative, Inc." for a period of six months. The sale
excludes the leasehold interest and personal property of Total Creative located
at the San Francisco, California, office, and any cash or bank accounts of Total
Creative. The closing of the sale was completed on July 19, 2001, and was deemed
effective as of June 30, 2001.
The purchase price paid by Viridian for the assets was $26,000, plus 20%
of the net profits for three fiscal years beginning July 1, 2001. The cash
portion of the purchase price was placed into an escrow account pending
confirmation that all outstanding liabilities and liens
affecting the assets have been satisfied. Viridian assumed no liabilities of
Total Creative in connection with the assets, except for ongoing obligations
arising after June 30, 2001. Any liabilities incurred prior to July 1, 2001, and
paid by Viridian will be deducted from the escrowed purchase price. The escrowed
funds will be released to Total Creative at such time as it is able to provide
Viridian reasonable proof that all outstanding liabilities relating to the
assets have been satisfied or settled. These liabilities total approximately
$421,731, of which Total Film remains liable for approximately $200,000 because
of contractual guarantees or other arrangements. Management decided to sell the
assets of Total Creative for the cash consideration, plus a percentage of future
profits, if any, rather than to cease and liquidate the operations of Total
Creative because management believes the consideration would be greater than in
a liquidation transaction. Management believes that although the purchaser of
the assets is controlled by a former affiliate of Total Film, the transaction
was at arms' length because of the divestiture of Mr. Green of any significant
ownership or management interest in Total Film and Total Creative in June 2001.
Viridian also entered into a three-year sublease agreement with Total
Creative and Total Film for the office space previously used by Total Creative.
Viridian has the option to cancel the sublease at any time upon six months'
written notice.
ITEM 7. FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
Not applicable.
(b) The Pro Forma Financial Information required by this item is included
with this report.
(c) Exhibit.
[Download Table]
Exhibit No. Description Location
2.3 Agreement of Purchase and Sale
dated June 29, 2001, by and
between the Company and Viridian
Entertainment, with addendum. Attached
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
-2-
Total Film Group, Inc.
Date: January 9, 2002 By /s/ Jeffrey Hoffman
----------------------------------
Jeffrey Hoffman, President
-3-
ITEM 7B - PROFORMA FINANCIAL INFORMATION.
The following unaudited pro forma condensed consolidated financial
statements give effect to the sale by the Company of the assets of TCI
and are based on the estimates and assumptions set forth in the notes
to the consolidated financial statements.This pro forma information
has been prepared using the historical financial statements of each
entity and assumes that the sale was consummated on July 1, 2000.The
pro forma financial data is provided for comparative purposes only and
does not purport to be indicative of the results, which actually would
have been obtained if the disposal had been effected on the date
indicated.
ASSETS
[Enlarge/Download Table]
Unaudited Pro Forma
June 30, 2000
-----------------------------------------------------------------
Consolidated TCI Eliminations Adjusted
-------------------- --------------------- ---------------------
CURRENT ASSETS
Cash and Cash Equivalents $ 448,102 $ (124,143) $ 323,959
Time Certificate of Deposit 20,692 - 20,692
Accounts Receivable, Net of Allowance 1,181,579 (674,315) 507,264
Employees Receivable, Net of Allowance 218,954 (701) 218,253
Deferred Production Costs 103,221 (103,221) -
Prepaid Expenses 281,347 (20,450) 260,897
-------------------- --------------------- ---------------------
TOTAL CURRENT ASSETS 2,253,895 (922,830) 1,331,065
-------------------- --------------------- ---------------------
OTHER ASSETS
Film Costs, Net of Amortization 9,495,808 - 9,495,808
Property and Equipment, Net of Depreciation 200,714 (164,738) 35,976
Investment in Meet World Trade 3,745,090 - 3,745,090
Recoverable Production Costs 1,000,000 - 1,000,000
Deposits 538,483 (35,400) 503,083
Goodwill, Net of Amortization 282,186 (282,186) -
Capitalized Financing Fee 196,053 - 196,053
-------------------- --------------------- ---------------------
15,458,334 (482,324) 14,976,010
-------------------- --------------------- ---------------------
TOTAL ASSETS $ 17,712,229 $ (1,405,154) $ 16,307,075
==================== ===================== =====================
LIABILITIES
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CURRENT LIABILITIES
Current Portion of Long -Term Debt $ 4,776,918 $ (12,274) $ 4,764,644
Current Portion of Capital Lease 45,464 (43,221) 2,243
Accounts Payable and Accrued Expenses 1,815,534 (268,903) 1,546,631
Deferred Revenue 227,163 (227,163) -
Producer's Fee Payable, Related Party 600,000 - 600,000
-------------------- --------------------- ---------------------
TOTAL CURRENT LIABILITIES 7,465,079 (551,561) 6,913,518
-------------------- --------------------- ---------------------
LONG-TERM LIABILITIES
Long-Term Debt, Net of Current Portion 1,040,931 (40,931) 1,000,000
Capital Lease, Net of Current Portion 57,905 (56,410) 1,495
-------------------- --------------------- ---------------------
TOTAL LONG-TERM LIABILITIES 1,098,836 (97,341) 1,001,495
-------------------- --------------------- ---------------------
TOTAL LIABILITIES 8,563,915 (648,902) 7,915,013
-------------------- --------------------- ---------------------
MINORITY INTEREST IN EQUITY
OF CONSOLIDATED SUBSIDIARY 829,550 - 829,550
-------------------- --------------------- ---------------------
STOCKHOLDERS' EQUITY
Preferred Stock - Par Value $3 per Share; Authorized
1,080,0000 Shares, Issued and Outstanding 738,600 Shares 2,215,800 - 2,215,800
Common Stock, $0.001 Par Value; Authorized 50,000,000
Shares; Issued and Outstanding 12,335,299 Shares 12,336 - 12,336
Additional Paid-in Capital 13,422,193 - 13,422,193
Accumulated Deficit (7,331,565) (756,252) (8,087,817)
-------------------- --------------------- ---------------------
TOTAL STOCKHOLDERS' EQUITY 8,318,764 (756,252) 7,562,512
-------------------- --------------------- ---------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 17,712,229 $ (1,405,154) $ 16,307,075
==================== ===================== =====================
[Enlarge/Download Table]
Unaudited Pro Forma
For the Year Ended June 30, 2001
-----------------------------------------------------------------------
Consolidated TCI Eliminations Adjusted
----------------------- ----------------------- -----------------------
REVENUE
Film Production Income $ 1,447,467 $ - $ 1,447,467
Advertising and Marketing Fees 1,873,666 (1,417,905) 455,761
----------------------- ----------------------- -----------------------
3,321,133 (1,417,905) 1,903,228
----------------------- ----------------------- -----------------------
COSTS AND OPERATING EXPENSES
Production and Design Costs 1,386,696 (1,042,541) 344,155
Selling, General & Administrative Expenses 11,188,556 (1,286,261) 9,902,295
Depreciation and Amortization 2,006,833 (58,830) 1,948,003
----------------------- ----------------------- -----------------------
TOTAL COSTS AND OPERATING EXPENSES 14,582,085 (2,387,632) 12,194,453
----------------------- ----------------------- -----------------------
LOSS BEFORE OTHER INCOME(EXPENSES) (11,260,952) 969,727 (10,291,225)
----------------------- ----------------------- -----------------------
OTHER INCOME(EXPENSE)
Interest Income 23,322 - 23,322
Interest Expense (954,602) 18,723 (935,879)
Amortization of Placement Fee (5,146,001) - (5,146,001)
Loss on Sale of Subsidiary (432,016) 432,016 -
Impairment of Investment in Meet World Trade (3,868,956) - (3,868,956)
Minority Interest 35,064 - 35,064
Miscellaneous Income 8,347 (5,419) 2,928
----------------------- ----------------------- -----------------------
TOTAL OTHER INCOME(EXPENSE) (10,334,842) 445,320 (9,889,522)
----------------------- ----------------------- -----------------------
LOSS BEFORE INCOME TAXES (21,595,794) 1,415,047 (20,180,747)
Income Taxes (15,928) 800 (15,128)
----------------------- ----------------------- -----------------------
NET LOSS $ (21,611,722) $ 1,415,847 $ (20,195,875)
======================= ======================= =======================
PER SHARE AMOUNTS - BASIC
Net Loss $ (1.49) $ 0.10 $ (1.39)
======================= ======================= =======================
WEIGHTED AVERAGE NUMBER OF BASIC
COMMON SHARES OUTSTANDING 14,470,487 14,470,487 14,470,487
======================= ======================= =======================
Dates Referenced Herein and Documents Incorporated by Reference
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