8-K 1 c67219e8-k.txt CURRENT REPORT ================================================================================ 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 January 15, 2002 Date of Report (Date of earliest event reported) INTELEFILM CORPORATION (Exact name of registrant as specified in its charter) MINNESOTA 0-21534 41-1663712 (State or other jurisdiction (Commission File No.) (IRS Employer ID No.) of incorporation) 6385 Old Shady Oak Road, Suite 290, Eden Prairie, Minnesota 55344 (Address of principal executive offices) (952) 925-8840 (Registrant's telephone number, including area code) ================================================================================ ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS The Registrant announced on January 16, 2002 that it had completed the sale of the stock of its commercial production subsidiary, Chelsea Pictures, Inc. to the Chelsea Pictures management group comprised of Steve Wax, Lisa Mehling and Alison Amon (collectively the "Chelsea Management Group"). The Chelsea Management Group paid $785,000 in proceeds to the Registrant, consisting of cash at closing of $250,000 and a promissory note for $585,000. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of Business Acquired Not applicable. (b) Pro Forma Financial Information The following unaudited pro forma condensed financial statements are filed with this report: Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2001 Pro Forma Condensed Consolidated Statements of Income: Year Ended December 31, 2000 Nine Months Ended September 30, 2001 This unaudited pro forma financial information sets forth the impact of the sale of the stock of the Registrant's commercial production subsidiary, Chelsea Pictures, Inc., to the Chelsea Management Group. The Chelsea Management Group paid $785,000 in proceeds to the Registrant, consisting of cash at closing of $250,000 and a promissory note of $585,000. The note is payable in variable installments over a three year term and bears interest at a variable rate. The note is secured by the acquired Chelsea Pictures, Inc. stock, and 200,000 shares of iNTELEFILM common stock held by the Chelsea Management Group. The note limits personal recourse against the Chelsea Management Group to $150,000. The Company will use the sale proceeds for working capital. The sale transaction was consummated on January 15, 2002 and will be effective January 1, 2002. The pro forma adjustments are based upon information currently available and on certain assumptions, described within the footnotes to the pro forma financial statements, that management of the Company believes are necessary and reasonable for a fair presentation of the pro forma financial information. The pro forma financial information and accompanying notes should be read in conjunction with the historical consolidated financial statements of the Company for the fiscal year ended December 31, 2000 and for the interim period ended September 30, 2001. The objective of the unaudited pro forma financial information is to show what the significant effects on the historical financial statements might have been had the sale of Chelsea Pictures, Inc. occurred, for balance sheet purposes, on September 30, 2001, and, for statement of operations purposes, on January 1, 2000. However, the pro forma balance sheets are not necessarily indicative of the effects of the Company's financial position that would have been attained had the transaction occurred earlier. The unaudited pro forma statements of operations and balance sheets do not purport to present the Company's consolidated results of operations and financial position as they might have been, or as they may be in the future, had the transaction occurred on the assumed date. STATEMENTS OF OPERATIONS:

(1) To eliminate the revenue and operating expenses of Chelsea Pictures, Inc. (2) To eliminate interest expense totaling $105,210 associated with a line of credit utilized in the operations of Chelsea Pictures, Inc. and to add interest income of $22,636 associated with the acquisition note receivable.

(1) To eliminate the revenue and operating expenses of Chelsea Pictures, Inc. (2) To eliminate interest expense totaling $45,113 associated with a line of credit utilized in the operations of Chelsea Pictures, Inc. and to add interest income of $28,995 associated with the acquisition note receivable. BALANCE SHEET:

(1) To eliminate the assets of Chelsea Pictures, Inc. (2) To eliminate the liabilities of Chelsea Pictures, Inc. which were assumed by virtue of the purchase of the common stock and to eliminate the minority interest associated with stock options earned by the Chelsea Management Group which were cancelled pursuant to the sale transaction. (3) To reflect receipt of the sale proceeds of $250,000 in cash and a note receivable of $585,000 net of an accrual for estimated disposition costs of $127,500. (c) Exhibits 10.1 Stock Purchase Agreement by and between the Company, and Alison Amon, Lisa Mehling and Steve Wax dated January 15, 2002 10.2 Stock Pledge Agreement by and between the Company, and Alison Amon, Lisa Mehling and Steve Wax dated January 15, 2002 10.3 Promissory Note made by Alison Amon, Lisa Mehling and Steve Wax for the benefit of the Company dated January 1, 2002 99.1 Press Release dated January 16, 2002 SIGNATURE 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. Dated: January 30, 2002 iNTELEFILM Corporation /s/ Mark A Cohn ----------------------------------------- Mark A. Cohn ITS: Chief Executive Officer EXHIBIT INDEX 10.1 Stock Purchase Agreement by and between the Company, and Alison Amon, Lisa Mehling and Steve Wax dated January 15, 2002 10.2 Stock Pledge Agreement by and between the , and Alison Amon, Lisa Mehling and Steve Wax dated January 15, 2002 10.3 Promissory Note made by Alison Amon, Lisa Mehling and Steve Wax for the benefit of the Company dated January 1, 2002 99.1 Press Release dated January 16, 2002

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