UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): November 11, 2002
NEWS COMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in Charter)
Nevada 0-18299 13-3346991
(State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.)
2 Park Avenue 10016
(Address of Principal Executive Offices) (ZIP Code)
Registrant's telephone number, including area code: (212) 689-2500
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets.
On November 11, 2002, News Communications, Inc. ("NCI") sold
substantially all of the assets and liabilities of its subsidiary, Tribco
Incorporated ("Tribco") to Tribco, LLC ("Tribco LLC") for a purchase price of
$1,115,000; which consisted of (a) $318,333 in cash, (b) the surrender of
500,000 shares of NCI's common stock having a value of $410,000, based upon a
price of $0.82 per share; and (c) a 5% promissory note in the principal amount
of $386,667. The note is payable in installments of $135,000 plus accrued
interest, $135,000 plus accrued interest, and $116,667 plus accrued interest on
the first, second and third anniversary dates. The purchase price was negotiated
in an arm's length transaction. Tribco's assets included Queens Tribune and
other related publications. Tribco LLC is headed by Tribco's publisher of 24
years, Mr. Michael Schenkler. Mr. Schenkler was also a member of the board of
directors of NCI until his resignation on November 11, 2002.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not Applicable
(b) Unaudited Pro Forma Statement of Operations for nine months
ended September 30, 2002, Unaudited Pro Forma Statement of
Operations for year ended December 31, 2001, Unaudited Pro
Forma Balance Sheet as of September 30, 2002.
(c) Exhibit. The following exhibit is filed with this report:
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10.1 Asset Purchase Agreement, dated November 11, 2002,
by and among Tribco Incorporated, Tribco, LLC and
News Communications, Inc.
Unaudited Pro Forma Consolidated Financial Information
The unaudited pro forma consolidated financial information gives effect to News
Communications, Inc.'s ("NCI" or the "Company") sale of substantially all of the
assets and liabilities of Tribco Incorporated ("Tribco") to Tribco, LLC ("Tribco
LLC") on November 11, 2002. The pro forma adjustments are described in the
accompanying notes.
The following historical and unaudited pro forma consolidated financial
information has been derived from the application of pro forma adjustments to
NCI's consolidated balance sheet as of September 30, 2002, as though the sale
had occurred on September 30, 2002; and NCI's consolidated statements of
operations for the year ended December 31, 2001 and for the nine months ended
September 30, 2002, as though the sale had occurred on January 1, 2001.
These pro forma statements are presented for illustrative purposes only. The pro
forma adjustments are based upon available information and certain assumptions
that management believes are reasonable. The pro forma consolidated financial
statements do not purport to represent what the results of operations or
financial position of NCI would actually have been if the sale had in fact
occurred on such dates, nor do they purport to project the results of operations
or financial position of NCI for any future period or as of any date
respectively. The unaudited pro forma statements should be read in conjunction
with NCI's consolidated historical financial statements, and the notes thereto.
Item 7(b)
News Communications, Inc.
Unaudited Pro Forma Statements of Operations
Nine months ended September 30, 2002
Historical Sale of Tribco Pro Forma
---------- -------------- ----------
Net revenues $ 9,648,231 $2,452,821 $ 7,195,410
------------------------------- -----------
Expenses:
Editorial 881,963 143,916 738,047
Production and distribution 2,726,308 876,644 1,849,664
Selling 2,131,546 581,997 1,549,549
General and administrative 3,714,654 778,733 2,935,921
Depreciation and amortization 184,842 15,943 168,899
------------------------------- -----------
Total expenses 9,639,313 2,397,233 7,242,080
Income (loss) before interest, minority interest in
income of subsidiary and taxes 8,918 55,588 (46,670)
Interest income, net 13,602 - 13,602
Minority interest in income of subsidiary (121,500) - (121,500)
------------------------------- -----------
Net loss before taxes (98,980) 55,588 (154,568)
Provision for income taxes 71,082 - 71,082
------------------------------- -----------
Net loss $ (170,062) $ 55,588 $ (225,650)
Net loss per share - basic and diluted $ (0.02) $ (0.02)(1)
=========== ===========
Weighted average number of common shares
outstanding - basic and diluted 10,686,114 500,000 10,186,114
=============================== ===========
(1) Proforma net loss per share reflects the increase in Net loss from the
disposal of Tribco and the return of 500,000 shares of NCI's common stock
News Communications, Inc.
Unaudited Pro Forma Statements of Operations
Year ended December 31, 2001
Sale of
Historical Tribco Pro Forma
---------- ------ ---------
Net revenues $13,581,542 $3,352,435 $10,229,107
--------------------------- -----------
Expenses:
Editorial 1,428,027 212,860 1,215,167
Production and distribution 4,710,878 1,383,133 3,327,745
Selling 3,158,122 747,153 2,410,969
General and administrative 5,544,957 1,031,328 4,513,629
Depreciation and amortization 374,277 128,748 245,529
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Total expenses 15,216,261 3,503,222 11,713,039
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Loss from operations (1,634,719) (150,787) (1,483,932)
Loss on sale of subsidiary (917,696) - (917,696)
--------------------------- -----------
Loss before interest, interest in income of subsidiary
and taxes (2,552,415) (150,787) (2,401,628)
Interest Expense, net (40,648) (230) (40,418)
Minority interest in income of subsidiary (41,000) - (41,000)
--------------------------- -----------
Net loss before taxes (2,634,063) (151,017) (2,483,046)
Provision for income taxes 162,999 - 162,999
--------------------------- -----------
Net loss $(2,797,062) $ (151,017) $(2,646,045)
=========================== ===========
Net loss per share - basic and diluted $ (0.29) $ (0.29)(1)
=========== ===========
Weighted average number of common shares outstanding -
basic and diluted 9,743,819 500,000 9,243,819
=========================== ===========
(1) Proforma net loss per share reflects the reduction in Net loss from the
disposal of Tribco and the return of 500,000 shares of NCI's common stock
News Communications, Inc.
Unaudited Pro Forma Balance Sheet
Year ended September 30, 2002
Consideration
Historical Tribco received(1) Pro Forma
---------- ------ ----------- ---------
Current assets:
Cash $ 862,765 $ (6,097) $318,333 $1,187,195
Accounts receivable 1,514,326 448,803 - 1,065,523
Other 185,033 (5,490) - 190,523
---------- -------------------------- ----------
Total current assets 2,562,124 437,216 318,333 2,443,241
Restricted Cash 104,103 - - 104,103
Property and equipment at cost - net 498,301 46,269 - 452,032
Intangible assets - net 1,570,775 734,713 - 836,062
Notes Receivable 625,000 - 386,667 1,011,667
Other - net 62,744 8,082 - 54,662
---------- -------------------------- ----------
Total assets $5,423,047 $1,226,280 $705,000 $4,901,767
========== ========================== ==========
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable $ 876,607 $ 215,067 $ - $ 661,540
Accrued expenses -
Payroll 545,719 41,457 - 504,262
Other 576,785 13,611 - 563,174
Note payable, current portion 4,445 - - 4,445
Income Taxes Payable 11,043 - - 11,043
Unearned revenue 137,968 58,724 - 79,244
Due to related parties 625,139 - - 625,139
Capital lease, current portion 16,102 - - 16,102
---------- -------------------------- ----------
Total current liabilities 2,793,808 328,859 - 2,464,949
Note payable, net of current portion 17,781 - - 17,781
Due to related parites, net of current portion 1,200,000 - - 1,200,000
Capital lease, net of current portion 21,469 - - 21,469
---------- -------------------------- ----------
Total liabilities 4,033,058 328,859 - 3,704,199
Total stockholders' equity 1,389,989 897,421 705,000(2) 1,197,568
---------- -------------------------- ----------
Total liabilities and stockholders' equity $5,423,047 $1,226,280 $705,000 $4,901,767
========= ========================== ==========
(1) The consideration received column represents the proceeds received by NCI
upon the sale of the net assets of Tribco. NCI received total consideration of
$1,115,000. As part of the proceeds, the buyer paid cash of $318,333,
surrendered 500,000 shares of common stock having a value of $410,000 based upon
the quoted market price of $0.82 per share, and issued to NCI a note in the
principal amount of $386,667.
(2) Stockholders equity
Gain on sale $ 217,579
Treasury stock received (410,000)
Net assets sold 897,421
---------
$ 705,000
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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.
NEWS COMMUNICATIONS, INC.
By: /s/ James A. Finkelstein
-------------------------------------
James A. Finkelstein
President and Chief Executive Officer
Date: November 26, 2002
EXHIBIT INDEX
Exhibit Description
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10.1 Asset Purchase Agreement, dated November 11, 2002, by and among Tribco
Incorporated, Tribco, LLC and News Communications, Inc.