Unassociated Document
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): September 2, 2009
LEGEND
MEDIA, INC.
(Exact
name of Registrant as specified in its charter)
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Nevada
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333-138479
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87-0602435
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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9663
Santa Monica Blvd. #952
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Beverly
Hills, CA
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90210
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(310)
933-6050
(Registrant's
telephone number, including area code)
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9663
Santa Monica Blvd. #952
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Beverly
Hills, CA, 90210
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(Former
Name or Former Address, if Changed Since Last
Report)
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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):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Considering
the potential business opportunities available and the likelihood that certain
radio business would continue to cause negative cash flow in the near future due
to the global economic depression, the management believe that it’s for the best
interest of the Company to restructure its current business assets and formulate
a tailored business plan in response to the global and domestic economic
changes, including (i) the disposal of FM90.5 and FM107.1 radio business and
(ii) the assignment of FM92.5 and FM95.5 radio business to BJ YSLD (as defined
below).
1.
Termination Agreement with respect to the Radio Frequency FM90.5 and
FM107.1
On July
20, 2009, Beijing Maihesi International Advertising Co., Ltd. ("Maihesi"),
a company organized in the People’s Republic of China and an affiliate of Legend
Media, Inc. (the "Company"), entered into an agreement (the “Termination
Agreement”) with Beijing Guoguang Guangrong Advertising Co., Ltd. (“Guoguang”),
pursuant to which Maihesi and Guoguang agreed to terminate (i) the Exclusive
Advertising Rights Agreement dated May 5, 2008 by and between Maihesi and
Guoguang, under which Maihesi was originally granted the exclusive right to
market and sell all broadcast advertising in connection with the frequency
FM90.5 of China Radio International in Beijing (the “Beijing Agency Agreement”),
and (ii) the Exclusive Advertising Rights Agreement dated August 4, 2008 by and
between Maihesi and Guoguang, under which Maihesi was originally granted the
exclusive right to market and sell all broadcast advertising in connection with
the frequency FM107.1 of China Radio International in Shenzhen (the
“Shenzhen Agency Agreement”, collectively with the Beijing Agency Agreement, the
“Agency Agreements”).
According
to the Termination Agreement, (i) Maihesi or its affiliate shall pay Guoguang
RMB1,150,000 (which, as of the date hereof, equal to approximately USD168,335)
on or prior to July 21, 2009 as compensation for the early termination of the
Beijing Agency Agreement, (ii) Maihesi agrees to forsake the deposits in the
amount of RMB2,760,000 and RMB1,050,000 under the Beijing Agency Agreement and
Shenzhen Agency Agreement, respectively (which, as of the date hereof, equal to
approximately USD404,005 and 153,698 respectively), (iii) Guoguang
agrees to forsake the accrued cost for the advertising minutes payable to
Guoguang (approximately RMB3,415,399.98, which, as of the date hereof, equal to
approximately USD499,941), and (iv) both Maihesi and Guoguang agree to waive any
claims and refrain from initiating any legal proceedings against the other party
arising from or in connection with the terminated Agency Agreements. In
addition, the Termination Agreement contains other covenants, agreements and
default and confidentiality provisions that the reader is encouraged to
review.
2. Business
Assignment with respect to the Radio Frequency FM95.5 and FM92.5.
Atis (as
defined below) used to have existing agreements with Tianjin Yinse Lingdong
Advertising Co., Ltd. ("TJ YSLD"), a company organized in the People’s Republic
of China and an affiliate of the Company, with respect to the exclusive right to
market and sell all broadcast advertising in connection with the frequency
FM92.5 and FM95.5 of China National Radio Station Music Radio in Tianjin and Xi’
an, respectively. To optimize the operations of the Company and save
administrative expenses, the management determines to cause such agreements be
assigned to BJ YSLD.
Beijing
Yinse Lingdong Advertising Co., Ltd. ("BJ YSLD"), a company organized in the
People’s Republic of China and an affiliate of the Company, entered into a
cooperation agreement (the “FM95.5 Agency Agreement”) with Beijing Atis
Advertising Co., Ltd. (“Atis”), a company organized in the People’s
Republic of China, pursuant to which (i) BJ YSLD is granted exclusive right
to market and sell all broadcast advertising in connection with the frequency
FM95.5 of China National Radio Station Music Radio in Xi’an for a term
commencing from June 16, 2009 and ending on December 31, 2010; (ii) the annual
cost for the advertising minutes in the year of 2009 and 2010 is
RMB595,835 and RMB1.1 million respectively (which, as of the date
hereof, equal to approximately USD87,217 and USD161,016, respectively); (iii) BJ
YSLD has the right of first refusal to renew the FM 95.5 Agency
Agreement upon expiration; and (iv) BJ YSLD is required to deposit
RMB356,667 (which, as of the date hereof, equal to approximately USD52,208). In
addition, the FM95.5 Agency Agreement contains other covenants,
agreements and default and confidentiality provisions that the reader is
encouraged to review.
BJ YSLD
entered into a cooperation agreement (the “FM92.5 Agency Agreement”) with
Atis, pursuant to which (i) BJ YSLD is granted exclusive right to market and
sell all broadcast advertising in connection with the frequency FM92.5 of China
National Radio Station Music Radio in Tianjin for a term commencing from June
15, 2009 and ending on December 31, 2010; (ii) the 12-month period cost for
advertising minutes is RMB2.5 million (which, as of the date hereof,
equal to approximately USD365,946); (iii) BJ YSLD has the right of first refusal
to renew the FM 92.5 Agency Agreement upon expiration; and (iv) BJ YSLD is
required to deposit RMB500,000 (which, as of the date hereof, equal to
approximately USD73,189). In addition, the FM92.5 Agency Agreement contains
other covenants, agreements and default and confidentiality provisions that the
reader is encouraged to review.
The
foregoing descriptions of the Termination Agreement, the FM92.5 Agency Agreement
and the FM 95.5 Agency Agreement are qualified in their entirety by reference to
the complete documents, copies of which are filed as Exhibit 10.1, 10.2 and
10.3 and are incorporated herein by reference.
The
disclosure set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated here in by reference.
Item 8.01 Other
Events
Upon the
termination of Agency Agreements and the said assignments, neither Maihesi nor
TJ YSLD has any substantial business left. To optimize the business operations
and save administrative expenses, the Company has terminated the related VIE
agreements on August 15, 2009 and intends to dissolve Legend Media (Beijing)
Consulting Co., Ltd. in due course, which is a party to the said VIE
agreements with TJ YSLD. The management is in the process of completing the said
dissolution.
The
information contained in this Item 8.01 shall not be deemed “filed” for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), nor shall it be deemed incorporated by reference in any filing under the
Exchange Act, except as shall be expressly set forth by specific reference in
such filing.
Item 9.01 Financial Statement and
Exhibits
Pursuant
to the disposal of FM90.5 and FM107.1 radio advertising assets, the Company has
(i) incurred an additional payment obligation in the amount of RMB1,150,000;
(ii) forsaken the deposits in the amount of RMB2,760,000 and RMB1,050,000
respectively; (iii) been forgiven for the accrued cost for advertising minutes
approximately RMB3,415,399.98 and (iv) written off the goodwill (approximately
USD1.1 million reflected on the current financial statements) to comply
with generally accepted accounting principles. As of the date hereof, the
Company has approximately USD1.05 million outstanding purchase price in
connection with certain acquisitions payable to Mr. Baochun
Ju.
Although
inherently speculative and not to be relied upon at the time of their original
issuance, all previously announced financial guidance and projections are hereby
withdrawn as the Company believes they may not be accurate or achievable based
upon recent developments. The Company intends to issue revised guidance and
projections in the near future.
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Exhibit
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Description
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10.1
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Termination
Agreement
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10.2
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FM
92.5 Agency Agreement
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10.3
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FM
95.5 Agency Agreement
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*
Incorporated herein by reference to the Company's Current Report on Form 8-K
filed with the SEC on September 2, 2009.
SIGNATURE
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.
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LEGEND
MEDIA, INC.
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Date:September
2, 2009
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By:
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/s/
Baochun Ju
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Baochun
Ju
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Chief
Executive Officer
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