SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25
Commission File Number 0-22250
NOTIFICATION OF LATE FILING
(Check One): [ X ] Form 10-KSB [ ] Form 11-K [ ] Form 20-F
[ ] Form 10-Q [ ] Form N-SAR
For Period Ended: DECEMBER 31, 1998
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[ ] Transition Report on Form 10-K [ ] Transition Report on Form 10-Q
[ ] Transition Report on Form 20-F [ ] Transition Report on Form N-SAR
[ ] Transition Report on Form 11-K
For the Transition Period Ended:
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READ ATTACHED INSTRUCTION SHEET BEFORE PREPARING FORM. PLEASE PRINT OR TYPE.
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
If the notification relates to a portion of the filing checked above,
identify Item(s) to which the notification relates:
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PART I
REGISTRANT INFORMATION
Full name of registrant BRILLIANT DIGITAL ENTERTAINMENT, INC.
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Former name if applicable
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Address of principal executive office (STREET AND NUMBER)
6355 TOPANGA CANYON BOULEVARD, SUITE 120
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City, State and Zip Code WOODLAND HILLS, CALIFORNIA 91367
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PART II
RULE 12B-25 (b) AND (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check box if appropriate.)
(a)The reasons described in reasonable detail in Part III of this form
could not be eliminated without unreasonable effort or expense;
[XX] (b) The subject annual report, semi-annual report, transition report
on Form 10-KSB, 20-F, 11-K or Form N-SAR, or portion thereof will be
filed on or before the 15th calendar day following the prescribed
due date; or the subject quarterly report or transition report on
Form 10-Q, or portion thereof will be filed on or before the fifth
calendar day following the prescribed due date; and
(c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
PART III
NARRATIVE
State below in reasonable detail the reasons why Form 10-KSB, 11-K, 20-F,
10-Q, N-SAR or the transition report portion thereof could not be filed within
the prescribed time period. (Attach extra sheets if needed.)
Brilliant Digital Entertainment, Inc. currently is negotiating a strategic
business acquisition, which acquisition will be material to Brilliant and
require disclosure in Brilliant's Annual Report on Form 10-KSB. Brilliant is
unable, without unreasonable effort and expense, to file timely its Annual
Report on Form 10-KSB for the year ended December 31, 1998 as it has been unable
to gather the information necessary to complete disclosure of the acquisition in
the Annual Report.
PART IV
OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
MICHAEL OZEN 818 615-1500
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(Name) (Area Code) (Telephone number)
(2) Have all other periodic reports required under Sections 13 or 15(d) of
the Securities Exchange Act of 1934 or Section 30 of the Investment Company Act
of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is no,
identify report(s).
[XX] Yes [ ] No
(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion thereof?
[XX] Yes [ ] No
If so: attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
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BRILLIANT DIGITAL ENTERTAINMENT, INC.
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(Name of registrant as specified in charter)
Has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date April 1, 1999 By /S/ Michael Ozen
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Name: Michael Ozen
Title: Chief Financial Officer
PART IV
ITEM 3
The results for the year ended December 31, 1998 are significantly impacted by
the factors described in Brilliant's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1998 and the attached press release issued on April
1, 1999.
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NEWS ANNOUNCEMENT
FOR IMMEDIATE RELEASE
CONTACT:
Kevin Bermeister, President David Collins
Michael Ozen, Chief Financial Officer Jaffoni & Collins Incorporated
Brilliant Digital Entertainment 212/835-8500 or [email protected]
818/615-1500 or [email protected]
BRILLIANT(TM) DIGITAL ENTERTAINMENT REPORTS 1998 RESULTS;
REVIEWS PROGRESS AND OPPORTUNITIES FOR 1999 AND BEYOND
LOS ANGELES, CA - April 1, 1999 - Brilliant Digital Entertainment, Inc.
(AMEX:BDE; http://www.multipathmovies.com), today announced operating results
for the fourth quarter and full year ended December 31, 1998. The Company also
reviewed its increased focus on Internet opportunities, progress in technology
development, Multipath(TM) Movie and Webisode(TM) production, expanding base of
distribution relationships and increasing awareness of, and traffic on, its
Internet web site.
Brilliant's achievements over the past year include:
0 Internet launch of 16 Multipath Movie Episodes and Webisodes - shorter
duration, serialized and easily downloaded versions of Multipath Movie
episodes.
0 Launch of the Digital Projector(TM) technology, an easily downloaded
viewing technology that operates within versions of Microsoft Explorer and
Netscape Navigator web browsers. Over 200,000 copies have been downloaded
to date.
0 New distribution relationships established with @Home, DVD EXPRESS,
Mediadome and GameStorm further expanding consumer access, on the
Internet, to Brilliant content and technology.
0 January 1999 distribution of CD ROM products into retail. Performance in
Wal-Mart stores was positive, resulting in re-orders and roll out to
additional stores.
0 Output of first high resolution animation, featuring Gravity Angels.
Interest in the project was very high at the annual NATPE television
industry convention. A complete two-hour episode is soon to be released.
0 Launch of B3D-Minimize for Max, real time animation tool to the BETA test
market. Industry previews have been positive, and the tool is now complete
and ready for release during April 1999. B3D enables animators to make
real time animations that can be played back on the Internet using
Brilliant's proprietary Digital Projector.
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0 Multipath Movie title distribution is expanded via SlingShot to the DVD
market using pre-rendered hi-fidelity audio and video technology. Roll-out
will broaden the availability of titles in retail which are targeted to a
platform designed for a more traditional living room viewing experience
than the PC.
0 Data compression enhancements enable certain existing and future Multipath
Movie titles or animation created using the b3d file format to be reduced
in size by more than 40% with further reductions possible. The first
titles to take advantage of these developments will be released in Q2 1999
and will include Superman. The enhancements take Multipath a step closer
to being accessible by the majority of Internet users with narrow-band
access.
1998 RESULTS:
Brilliant's operating results reflect ongoing investment in the development of
its Internet capabilities, the production of Multipath Movie episodes/Webisodes,
the continued development of proprietary software tools and Internet Digital
Projector technology and the formation of new distribution and product
development relationships. Results for 1998 reflect the increased production of
Multipath Movie episodes/Webisodes and the expensing of such costs beginning in
the second quarter.
Accordingly, Brilliant Digital reported a fourth quarter net loss of
$(3,088,000), or $(0.33) per share, compared with a net loss of $(1,375,000), or
$(0.17) per share, for the same period a year ago. Brilliant Digital's 1998
fourth quarter revenues were $224,000, principally reflecting retail sales of
$191,000 for Multipath Movie CD ROM products and revenue of $33,000 under a
Multipath Movie technology and content development agreement.
For the year ended December 31, 1998, Brilliant Digital reported a net loss of
$(9,425,000), or $(1.00) per share, compared to a net loss in the prior year of
$(2,305,000), or $(0.31) per share. Revenues for 1998 were $431,000, compared to
revenues of $2,481,000 in 1997, including $1,973,000 related to a distribution
agreement with Packard Bell NEC.
Kevin Bermeister, President of Brilliant Digital, commented, "We are actively
working to build upon our achievements in 1998 and remain keenly focused on the
Internet. Our opportunities include licensing our development tools and
applications to foster the creation of Internet-ready content and to develop a
new Internet animation standard for use in entertainment, education and
e-commerce."
"An important aspect of Brilliant's strategy is to position our production
process and technology as an essential solution in the converging markets for
television broadcast and Internet animation. Revenue will be generated from
tools and technology licensing, content co-production and joint venture content
distribution with the more established distribution partners in the television
broadcast and on-line markets. Having entered the market early, we are well
positioned to leverage our solutions in the rapidly evolving market for Internet
and new media content."
Brilliant continues to carefully consider new business opportunities that could
be strategic to the development of the Company and currently is in discussions
and performing due diligence
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relating to such a possible acquisition by Brilliant. The Company has not
determined to proceed with the possible acquisition and cautions that there can
be no assurance that its discussions will lead to any acquisition or that any
acquisition, if consummated, will be beneficial to Brilliant. Brilliant has also
determined to file a Form 12b-25, deferring for up to 15 days the filing of its
annual report on Form 10-KSB, noting that is unable at this time, without
unreasonable effort and expense, to file its Annual Report on Form 10-KSB for
the year ended December 31, 1998.
ABOUT BRILLIANT DIGITAL ENTERTAINMENT:
Brilliant Digital Entertainment (http://www.multipathmovies.com) is the
production studio responsible for creating Multipath 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 are developed using
proprietary, technologically advanced software tools that 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 has formed strategic alliances with Packard Bell NEC,
CompuServe, British Telecom, DVD EXPRESS, Kesmai's GameStorm and @Home 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 Adventure series of interactive
books. Brilliant has also signed content license agreements for the following
properties: Ace Ventura (Morgan Creek Productions), KISS, Popeye (King
Features), Superman (DC Comics) and Xena (Universal Studios). The company is
headquartered in Los Angeles, CA with offices in Bondi Junction and Double Bay,
Australia and Middlesex, England.
INFORMATION ABOUT FORWARD LOOKING STATEMENTS:
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. Forward looking statements include (i)
Brilliant's stated expectation that its B3D tool will be released during April
1999, (ii) Brilliant's expectation that licensing of its development tools and
applications can foster the creation of Internet-ready content and to develop a
new Internet animation standard for use in entertainment, education and
e-commerce, (iii) Brilliants expectation that revenue will be generated from
tools and technology licensing, content co-production and joint venture content
distribution with the more established distribution partners in the television
broadcast and on-line markets , and (iv) Brilliant's expectation that a complete
two-hour episode of Gravity Angels is soon to be released to the market.
Brilliant's ability to complete and timely release its titles and tools
projected for release is subject to a number of factors and risks including the
Company's ability to complete quality assurance testing of titles and tools and
the ability of Brilliant or its distribution partners to conclude distribution
and marketing arrangements in a highly competitive environment. Brilliant's
ability to successfully license its development tools and applications to foster
the creation of Internet-ready content and to develop a new Internet animation
standard and generate revenue from tools and technology licensing, content
co-production and joint venture content distribution is subject to (i) the
negotiation and/or implementation of distribution and marketing arrangements
which are not certain of success, (ii) with respect to Internet distribution,
overcoming consumer reluctance to initiate large downloads over low bandwidth
Internet connections, (iii) with respect to retail markets, the ability of the
Company to manufacture, package and ship its products on schedule and avoid
delays and manufacturing capacity shortages inherent in the software
distribution process, and (iv) many other risks described in the Company's most
recently filed Form 10-KSB report and 10-QSB. If Brilliant is unable to timely
release, market and distribute its new products, or if the products are not
commercially successful, Brilliant's results will be materially adversely
affected. Information about certain additional risk factors is contained in the
(financial statements follow)
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Company'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 to our investor relations company,
Jaffoni & Collins at 212-835-8500 or [email protected].
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BRILLIANT DIGITAL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(IN THOUSANDS)
<CAPTION>
DECEMBER 31,
1998
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<S> <C>
ASSETS
Cash and cash equivalents.......................... $ 3,187
Other current assets............................... 2,449
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Total current assets............................... 5,636
Other assets....................................... 1,817
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Total assets....................................... $ 7,453
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities................................ $ 1,552
Long-term liabilities.............................. 343
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Total liabilities.................................. 1,895
Total stockholders' equity......................... 5,558
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Total liabilities and stockholders' equity......... $ 7,453
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BRILLIANT DIGITAL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<CAPTION>
3 MONTHS 3 MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED
12/31/98 12/31/97 12/31/98 12/31/97
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(UNAUDITED) (UNAUDITED) (AUDITED) (AUDITED)
<S> <C> <C> <C> <C>
REVENUE:
Total revenues................. $ 224 $ 114 $ 431 $ 2,481
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COST OF REVENUES AND EXPENSES:
Cost of revenues.................... 958 26 1,383 44
Sales & marketing................... 511 704 1,785 1,090
General and administrative.......... 912 558 2,936 2,214
Research and development............ 835 304 3,798 1,709
Depreciation........................ 130 20 390 214
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Total cost of revenues and expenses 3,346 1,612 10,292 5,271
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(Loss) from operations............. (3,122) (1,498) (9,861) (2,790)
OTHER INCOME (EXPENSE):
Export market development grant... -- -- 73 148
Gain (loss) on foreign exchange... -- 26 (5) 27
Interest income (expense), net.... 34 98 368 313
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Total other income (expense). 34 124 436 488
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(Loss) before income taxes........ (3,088) (1,374) (9,425) (2,302)
Provision for income taxes........ (0) (1) (0) (3)
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Net income (loss)................. $ (3,088) $ (1,375) $ (9,425) $ (2,305)
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Comprehensive income (loss)...... $ (2,939) $ (1,522) $ (9,353) $ (2,473)
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Basic and diluted net income
(loss) per share............ $ (0.33) $ (0.17) $ (1.00) $ (0.31)
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Common shares used in computing
basic income (loss) per share 9,403 7,201 9,403 7,384
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