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): December 10 1998
BRILLIANT DIGITAL ENTERTAINMENT, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-21637 95-4592204
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
6355 Topanga Canyon Boulevard, Suite 120
Woodland Hills, California 91367
(Address of Principal Executive Offices)
(818) 615-1500
(Registrant's Telephone Number)
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ITEM 5. OTHER EVENTS
Reference is made to the press release of Registrant, issued on December
10, 1998, which contains information meeting the requirements of this Item 5,
and which is incorporated herein by this reference. A copy of this press release
is attached to this Form 8-K as Exhibit 99.1.
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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.
December 10, 1998 BRILLIANT DIGITAL ENTERTAINMENT, INC.
By: /s/ Michael Ozen
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Michael Ozen
Chief Financial Officer
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EXHIBIT INDEX
EXHIBITS PAGE NUMBER
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99.1 Press Release dated December 10, 1998. 5
Exhibit 99.1
NEWS ANNOUNCEMENT
FOR IMMEDIATE RELEASE
Company Contact: Investor Relations Contact:
Michael F. Ozen David Collins/Vicki Siegel
Brilliant Digital Entertainment Jaffoni & Collins
818/615-1500 or [email protected] 212/835-8500or [email protected]
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BRILLIANT(TM) DIGITAL ENTERTAINMENT
SECURES STANDBY FINANCING PACKAGE
- PROVIDES BRILLIANT WITH IMPROVED CONTROL OVER ACCESS TO FUTURE FUNDING -
LOS ANGELES, CA, December 10, 1998 - Brilliant(TM) Digital Entertainment, Inc.
(AMEX:BDE), a leading interactive entertainment content and tools developer,
today announced that it has secured a standby financing package. The financing
package is structured to provide Brilliant Digital control in determining when
and if funding is accessed. The financing structure was undertaken by Brilliant
Digital to provide backup working capital support. At September 30, 1998,
Brilliant Digital had $5.4 million in cash.
The financing package consists of the private placement of a $100,000
Convertible Debenture and a Warrant for the purchase of up to 1.8 million shares
of Brilliant Digital's Common Stock at a discount to the Market Price (as
defined below) at the time of exercise. Foreign-based AMRO International, S.A.
is the investor in the standby financing package.
Kevin Bermeister, President of Brilliant Digital, commented, "Management and the
Board of Directors felt it prudent to establish a financing conduit that could
support the continued funding of our sales and marketing, content and technology
development efforts during 1999. This financing package provides the needed
flexibility and, more importantly, the control to allow Brilliant Digital to
draw additional funding according to its needs and timing. Importantly, with the
exception of the initial issuance of the $100,000 Convertible Debenture, the
facility does not require Brilliant Digital to draw funds, is competitively
priced and does not establish an upper limit on the Warrant exercise price."
CONVERTIBLE DEBENTURE TERMS:
The Convertible Debenture matures on December 1, 2000 and bears interest at an
annual rate of 4%, payable quarterly in arrears. The investor may convert the
debenture into shares of
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Common Stock at a 14% discount to the Market Price (as defined below) on the
conversion notice date. Brilliant Digital may prepay the debenture at any time
without penalty.
WARRANT TERMS:
Brilliant Digital may call a portion of the Warrant at any time, subject to
minimum and maximum limits and provided that the Market Price of Brilliant
Digital's Common Stock is at least $1.00 per share and that a registration
statement covering the Common Stock underlying the Warrants is effective. The
portion of the Warrant called by the Company may be exercised by the Investor at
a 12% discount to the "Market Price," defined as the lowest trade price of the
Common Stock over the last ten trading days prior to the redemption notice date.
In the event the Market Price is $4.00 or less, the exercise price is reduced to
14% below the Market Price.
If any called portion of the Warrant is not exercised, Brilliant Digital may
require the investor to make a loan to Brilliant Digital in the amount of the
aggregate exercise price of such portion of the Warrant. The loan would be in
the form of a Convertible Debenture with the same terms as the Convertible
Debenture described above.
The Warrant expires on November 30, 2001 and may be cancelled in full by
Brilliant Digital at any time upon 30 days' notice. The investor may exercise
the Warrant at an exercise price of $25 per share from October 1, 2001 until its
expiration, or if Brilliant elects to cancel the Warrant in full.
ABOUT BRILLIANT DIGITAL ENTERTAINMENT:
Brilliant Digital Entertainment is the production studio responsible for
creating Multipath(TM) Movies, a new generation of digital entertainment to be
distributed over the Internet, on CD-ROM, as television programming and for home
video. Multipath Movies utilize Brilliant Digital's proprietary, technologically
advanced software tools to produce three-dimensional, digitally animated
stories, each with multiple user-influenced plot alternatives or paths that lead
to a variety of distinct conclusions.
Brilliant Digital Entertainment (http://www.bde3d.com) has formed strategic
alliances with Packard Bell NEC, CompuServe, and British Telecom to distribute
its Multipath Movies over the Internet's World Wide Web and has acquired the
exclusive worldwide interactive rights to Bantam Doubleday Dell Books for Young
Readers for the Choose Your Own Nightmare series of interactive books. The
Company has also signed content agreements with DC Comics, Morgan Creek
Productions, King Features and Universal Studios. The company is headquartered
in Los Angeles, CA with offices in Bondi Junction and Double Bay, Australia and
Middlesex, England.
Statements in this news release that relate to future plans, financial results
or projections, events or performance are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Act of 1934, as amended. Actual results may differ
materially due to a variety of factors. Satisfaction of the minimum price and
SEC registration conditions of the financing package are subject to certain
risks, including potential decreases in the trading price of the Common Stock
and difficulties in obtaining clearance of the registration statement by the
Securities and Exchange Commission. The investor may
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be unwilling or unable to exercise the Warrant or fund a Convertible Debenture
loan upon a partial Warrant call by Brilliant Digital, due to a deterioration in
the investor's financial condition, its inability to obtain funding or other
reasons. Brilliant Digital's ability to take effective legal action against the
investor for failure to perform under the financing package may be limited due
to the investor's status as a foreign based entity. If Brilliant Digital is
unable to obtain necessary funds under the financing package or if such funds
are insufficient to adequately provide for its financing needs, Brilliant
Digital would be required to obtain alternative financing sources, which may be
unavailable or available only on terms materially less attractive than the
financing package. The investor may seek rapid liquidity by divesting itself of
its investment after each warrant exercise. Information about certain of these
factors and other important risks and uncertainties is contained in Brilliant
Digital's most recently filed Form 10-KSB report and 10-QSB report and are
available from Brilliant Digital Entertainment's Investor Relations department
and may be obtained by calling or writing our investor relations company,
Jaffoni & Collins at 212-835-8500 or [email protected].
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