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

Date of Report (Date of earliest event reported) September 20, 1996

CD RADIO INC.

(Exact Name of Registrant as Specified in Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

                   0-24710                             52-1700207
         ------------------------         --------------------------------
         (Commission File Number)         (IRS Employer Identification No.)


Sixth Floor, 1001 22nd Street, N.W.
Washington, D.C.                                                      20037
- ---------------------------------------                             ----------
(Address of Principal Executive Offices)                            (Zip Code)

Registrant's telephone number, including area code (202) 296-6192


(Former Name or Former Address, if Changed Since Last Report)

Page 1 of 7 Pages
Exhibit Index on Page 4

ITEM 5. OTHER EVENTS

During September 1996, warrants were exercised for the purchase of 752,631 shares of the Company's common stock. In connection with these exercises, the Company received cash in the amount of $4,353,288.

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS

(c) Exhibits

Unaudited Consolidated Financial Statements for CD Radio Inc. and Subsidiary (A Development Stage Enterprise) including:

Unaudited Consolidated Balance Sheet as of August 31, 1996

Unaudited Consolidated Statement of Operations for the eight months ended August 31, 1996

Notes to Unaudited Financial Statements

Page 2 of 7 Pages

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.

CD RADIO INC.


Date      October 1, 1996                 By /s/ David Margolese
                                            ------------------------------------
                                                David Margolese
                                                Chairman of the Board and Chief
                                                Executive Officer


Page 3 of 7 Pages

Exhibit Index
Exhibit
Number           Exhibit                                                                  Page
- ------           -------                                                                  ----
99               Unaudited Consolidated Financial Statements for CD Radio                    5
                 Inc. and Subsidiary (A Development Stage Enterprise)

Page 4 of 7 Pages  


Exhibit Index

Exhibit
Number           Exhibit                                                                  Page
- ------           -------                                                                  ----
99               Unaudited Consolidated Financial Statements for CD Radio                    5
                 Inc. and Subsidiary (A Development Stage Enterprise)

Page 4 of 7 Pages

CD RADIO INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)

CONSOLIDATED BALANCE SHEET
AS OF AUGUST 31, 1996
(UNAUDITED)

                                    ASSETS


Current Assets:
        Cash and cash equivalents                                               $   1,137,390
        Prepaid expenses and other                                                     68,628
                                                                                -------------
          Total current assets                                                      1,206,018
                                                                                -------------

Property and equipment, at cost:
        Technical equipment                                                           254,200
        Office equipment and other equipment                                           89,220
        Demonstration equipment                                                        38,664
                                                                                -------------
                                                                                      382,084
        Less accumulated depreciation                                                (196,069)
                                                                                -------------
                                                                                      186,015
Deposits                                                                              303,793
                                                                                -------------
        Total Assets                                                            $   1,695,826
                                                                                =============


                     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
        Accounts payable and accrued expenses                                   $       6,062
        Other                                                                          22,799
                                                                                -------------
              Total current liabilities                                                28,861


Loan from officer                                                                     240,000
Deferred rent and other                                                                65,503
                                                                                -------------
        Total liabilities                                                             334,364
                                                                                -------------


Stockholders' equity:
        Preferred stock, $0.001 par value, 10,000,000 shares
          authorized: none issued or outstanding
        Common stock, $0.001 par value: 50,000,000 shares                               9,473
          authorized: 9,472,760 issued and outstanding
        Additional paid-in capital                                                 18,715,706
        Accumulated deficit                                                       (17,257,050)
        Deferred compensation on stock options granted                               (106,667)
                                                                                -------------
              Total stockholders' equity                                            1,361,462

        Total liabilities and stockholders' equity                              $   1,695,826
                                                                                =============

The accompanying notes are an integral part of these consolidated financial statements

Page 5 of 7 Pages

CD RADIO INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)

CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE EIGHT MONTHS ENDED AUGUST 31, 1996
(UNAUDITED)

Revenue                                                                         $      ---


Expenses
        Legal, consulting and regulatory fees                                         729,528
        Other general and administrative                                              795,864
        Research and development                                                       71,007
                                                                             ----------------

          Total expenses                                                            1,596,399
                                                                             ----------------
Other income (expense)
        Interest income                                                                57,765
        Interest expense                                                              (13,151)
                                                                             ----------------
                                                                                       44,614
                                                                             ----------------

Net loss                                                                        $  (1,551,785)
                                                                             ================

The accompanying notes are an integral part of these consolidated financial statements

Page 6 of 7 Pages

CD RADIO INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1996
(UNAUDITED)

General

The accompanying financial statements do not include all of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles. In the opinion of management, all adjustments (consisting only of normal, recurring adjustments) considered necessary to fairly reflect the Company's consolidated financial position and consolidated results of operations have been included.

Subsequent event

During September 1996, warrants were exercised for the purchase of 752,631 shares of the Company's common stock. In connection with these exercises, the Company received cash in the amount of $4,353,288. If the exercise had taken place at August 31, 1996, the Company's cash and cash equivalents and total assets at that date would have been $5,490,678 and $6,049,114, respectively.

Page 7 of 7 Pages