As filed with the Securities
and Exchange Commission on July 5, 2000. Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BRILLIANT DIGITAL ENTERTAINMENT, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 95-4592204
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
6355 TOPANGA CANYON BOULEVARD, SUITE 120
WOODLAND HILLS, CALIFORNIA 91367
(818) 346-3653
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
MARK DYNE, CHIEF EXECUTIVE OFFICER
6355 TOPANGA CANYON BOULEVARD, SUITE 120
WOODLAND HILLS, CALIFORNIA 91367
(818) 346-3653
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent for Service)
Copies to:
MURRAY MARKILES, ESQ.
JOHN J. MCILVERY, ESQ.
TROOP STEUBER PASICH REDDICK & TOBEY, LLP
2029 CENTURY PARK EAST
LOS ANGELES, CALIFORNIA 90067
(310) 728-3000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities on this form are being offered pursuant to dividend
or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
=================================== ============== ================== =================== ==============
Proposed Maximum Proposed Maximum Amount Of
Title of Each Class of Securities Amount To Be Offering Price Aggregate Registration
To Be Registered Registered (1) Per Unit (2) Offering Price Fee
----------------------------------- -------------- ------------------ ------------------- --------------
<S> <C> <C> <C> <C>
Common Stock, par value $.001
per share........................ 4,500,000 $ 4.69 $ 21,105,000 $ 5,572
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<FN>
(1) In the event of a stock split, stock dividend, or similar transaction
involving the Registrant's common stock, in order to prevent dilution, the
number of shares registered shall automatically be increased to cover the
additional shares in accordance with Rule 416(a) under the Securities Act.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) on the basis of the average high and low prices of
the Registrant's common stock reported on the American Stock Exchange on
June 27, 2000.
</FN>
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE TIME UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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SUBJECT TO COMPLETION - JULY 5, 2000
PROSPECTUS
BRILLIANT DIGITAL ENTERTAINMENT, INC.
4,500,000 SHARES OF COMMON STOCK
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETED AND MAY BE CHANGED. WE
MAY NOT SELL THE COMPANY'S COMMON STOCK PURSUANT HERETO UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THE COMPANY'S COMMON STOCK AND IT IS NOT
SOLICITING AN OFFER TO BUY THE COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE
IS NOT PERMITTED.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR FACTORS THAT SHOULD BE
CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SHARES.
The date of this prospectus is _________, 2000
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<TABLE>
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TABLE OF CONTENTS
PAGE
<S> <C>
PROSPECTUS SUMMARY...........................................................3
RISK FACTORS.................................................................4
FORWARD-LOOKING STATEMENTS..................................................11
USE OF PROCEEDS.............................................................12
WHERE YOU CAN FIND MORE INFORMATION.........................................12
PLAN OF DISTRIBUTION........................................................13
LEGAL MATTERS...............................................................14
EXPERTS.....................................................................14
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PROSPECTUS SUMMARY
ABOUT BRILLIANT DIGITAL ENTERTAINMENT
Brilliant Digital Entertainment is a pioneering entertainment content
provider and 3D animation technology developer for the converging Internet and
television markets. We have expanded our business to include the broadcast and
webcast over the Internet and television, of live auctions through our
subsidiary, The Auctionchannel, Inc.
We use our proprietary software tools to develop and distribute
digitally-animated interactive content for the Internet, including our
Multipath(TM) Movies. We also develop technology and software tools for sale to
others to be used by them in the development of content for the Internet. Our
subsidiary, The Auction Channel, enables viewers to watch auction events on
television or the Internet and use the Internet or their telephone to bid in
real time against bidders present at an auction.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the SEC utilizing a "shelf" registration process. Under this shelf process, we
may from time to time offer up 4,500,000 shares of Common Stock, $.001 par value
per share, of Brilliant, at prices and on terms to be determined at the time of
sale. The Common Stock is sometimes referred to herein as "securities." The
securities offered pursuant to this prospectus may be issued in one or more
series of issuances.
Each time we offer these securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering.
CORPORATE INFORMATION
We are a Delaware corporation that was incorporated in July 1996. We
were formed through the combination of two businesses: Brilliant Interactive
Ideas, Pty. Ltd., an entertainment software developer and producer, and Sega
Australia New Developments, a research and development operation for leading
edge software tools. We acquired Trojan Television Limited in July 1999, and
transferred Trojan to our subsidiary, The Auctionchannel, Inc. Our executive
offices are located at 6355 Topanga Canyon Boulevard, Suite 120, Woodland Hills,
California 91367, and our telephone number is (818) 615-1500. Information on our
websites, www.multipathmovies.com and www.theauctionchannel.com, does not
constitute part of this prospectus.
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS BEFORE YOU DECIDE TO
BUY OUR COMMON STOCK. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE THE
MATERIAL ONES FACING OUR COMPANY. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR,
OUR BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS WOULD LIKELY SUFFER.
IF THIS OCCURS, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY
LOSE ALL OR PART OF THE MONEY YOU PAID TO BUY OUR COMMON STOCK.
WE WILL NOT BE ABLE TO GENERATE REVENUES IF OUR MULTIPATH MOVIES DO NOT ACHIEVE
MARKET ACCEPTANCE.
Each Multipath Movie is an individual artistic work, and its ability to
generate revenues primarily will be determined by consumer reaction, which is
unpredictable. To generate revenues, we must develop stories and characters that
capture the attention and imagination of consumers and license recognized
characters and properties from third parties for use in our Multipath Movies. We
cannot be certain that we will be able to do so. Other factors that influence
our ability to generate revenues from our Multipath Movies include:
o consumer reluctance to initiate time consuming downloads of data
necessary to view our products;
o our marketing strategies;
o the quality of our products and competing products;
o our ability to enter into revenue share agreements with third party
web sites;
o critical reviews; and
o the availability of alternative forms of entertainment and leisure
time activities.
WE HAVE EXPERIENCED, AND MAY CONTINUE TO EXPERIENCE, REDUCED REVENUES DUE TO
DELAYS IN THE INTRODUCTION AND DISTRIBUTION OF OUR PRODUCTS.
We cannot be certain that we will be able to meet our planned release
dates for our new Multipath Movies. If we cannot release an important new
product or webisodes during the scheduled quarter, our revenues would likely be
reduced in that quarter. In the past, we have experienced significant delays in
our introduction of some new products. For instance, delays in duplication,
packaging and distribution caused our first Multipath Movies, CYBERSWINE, POPEYE
AND THE QUEST FOR THE WOOLLY MAMMOTH, NIGHT OF THE WEREWOLF and the HALLOWEEN
PARTY to begin arriving at retailers at the end of December 1997, after the 1997
holiday selling season. Similarly, we experienced distribution delays in the
fourth quarter of 1998 that caused our products to reach retail shelves only at
the end of December, after the 1998 holiday selling season. As a result, we
experienced fewer sales of these products than we would have if the products
were in stores during the holiday selling seasons, which had a materially
adverse effect on our operating results for the 1997 and 1998 fourth quarters.
It is likely in the future that delays will continue to occur and that some new
products will not be released in accordance with our internal development
schedule or the expectations of public market analysts and investors.
WE MAY NOT BE ABLE TO GENERATE SIGNIFICANT DEMAND FOR OUR PRODUCTS VIEWED ON THE
INTERNET UNLESS THERE IS A REDUCTION IN THE TIME IT TAKES TO DOWNLOAD THE
LARGE AMOUNTS OF DATA NECESSARY TO VIEW OUR PRODUCTS ON THE INTERNET.
Our revenue growth depends in part on our ability to distribute our
products for viewing on the Internet. We believe that without reductions in the
time to download Multipath Movies over the Internet, our Multipath Movies may be
unable to gain consumer acceptance. This reduction in download time depends in
part upon advances in compression technology. We have previously experienced
delays in the development of compression technologies, which, we believe,
materially and adversely affected our online sales and results of operations. We
believe that large, time-consuming downloads have previously deterred potential
users of our products and have reduced the effectiveness of our marketing
campaigns at that time. The development of these
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technologies continues to be a significant component of our business strategy
and a primary focus of our research and development efforts.
IF WE ARE UNABLE TO RAISE ADDITIONAL FUNDS, WE MAY BE REQUIRED TO DEFER
COMPLETION OF MULTIPATH MOVIE TITLES AND REDUCE OVERHEAD SIGNIFICANTLY.
We believe that our existing funds, cash generated from operations and
proceeds from our future sales of common stock to St. Annes Investments, Ltd.
under the securities purchase agreement we entered into with St. Annes in March
1999 will be sufficient to fund our working capital requirements for at least
the next twelve months. After that period, we may need to raise additional funds
through debt or equity financing or by other means. We cannot be certain that
additional financing will be available at the time we need additional funds or
that, if available, it can be obtained on terms that we deem favorable. If
necessary funds are not available, we may be required to defer completion of
Multipath Movie titles and reduce overhead significantly, which could have a
material adverse effect on our business. Additionally, our stockholders may be
diluted if we raise additional funds through the sale of our stock.
THIRD PARTY WEB SITES AND THE LICENSORS FROM WHOM WE OBTAIN RIGHTS TO OUR
STORIES AND CHARACTERS MAY CAUSE THE DELAY OF THE RELEASE OF OUR PRODUCTS,
WHICH MAY RESULT IN LOWER REVENUES THAN ANTICIPATED.
Our distribution relationships with third party web sites and our
licensing arrangements with companies that own the stories or characters used in
many of our Multipath Movies, contain potentially burdensome provisions. These
provisions may affect our ability to release our products, which would adversely
affect our revenues, for a number of reasons, such as:
o A software distributor or a licensor of a story or character may, in
the exercise of its product approval rights, arbitrarily require
expensive and time consuming changes to our products, which may cause
a delay in the release of the products; and
o A third party web site could delay the inclusion of our content on the
site, and thereby cause a delay in distribution.
WE MAY NOT BE ABLE TO LICENSE STORIES AND CHARACTERS THAT APPEAL TO CONSUMERS
FOR USE IN OUR MULTIPATH MOVIES, WHICH IS NECESSARY FOR OUR MULTIPATH MOVIES
TO HAVE APPEAL IN THE MARKET.
We use stories and characters developed by third parties in our
Multipath Movies. If we cannot license stories and characters that appeal to
consumers at prices or upon terms or conditions that we consider acceptable, we
may not be able to develop Multipath Movies that consumers will watch. To have
access to appealing stories and characters for use in our Multipath Movies, we
will need to continue to develop new relationships and maintain existing
relationships with the licensors of these stories and characters. Many licensors
are reluctant to grant broad licenses covering multiple formats, like the
Internet and television, to companies without a proven track record in the
particular industry. When rights are available, there is often significant
competition for licenses.
IF THE VENDOR WE USE TO DELIVER MULTIPATH MOVIES THROUGH OUR INTERNET SITE
EXPERIENCES AN INTERRUPTION IN SERVICE, WE WILL NOT BE ABLE TO DELIVER MOVIES
THROUGH OUR INTERNET SITE UNTIL SERVICE RESUMES.
We presently use a single vendor to deliver Multipath Movies through
our Internet site. Any significant interruption in service provided by this
vendor could interrupt sales and delivery of Multipath Movies and adversely
affect our ability to conduct this portion of our business and maintain customer
satisfaction.
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IF WE CANNOT OBTAIN CD-ROM AND DVD MANUFACTURING AND PACKAGING SERVICES ON A
TIMELY BASIS, WE MAY NOT BE ABLE TO TIMELY DELIVER OUR CD-ROM AND DVD
PRODUCTS TO DISTRIBUTORS AND RETAILERS AND OUR SALES WILL BE ADVERSELY
AFFECTED.
We use third party vendors to press CD-ROM and DVD disks, assemble
purchased product components, print product packaging and user manuals and
package finished products in connection with the retail distribution of our
Multipath Movies. We do not have contractual agreements with any of our third
party vendors, which may result in our inability to secure adequate services in
a timely manner. If we cannot obtain adequate manufacturing services, we will
not be able to timely produce and deliver our CD-ROM and DVD products to
distributors and retail stores for ultimate sale to consumers, which will
adversely affect our sales and operating results.
IF WE ARE UNABLE TO DEVELOP A RETAIL SALES CHANNEL, EFFECTIVELY COMPETE FOR
RETAIL SHELF SPACE AND NEGOTIATE FAVORABLE TERMS WITH RETAILERS, OUR RETAIL
SALES AND OPERATING RESULTS WILL BE ADVERSELY AFFECTED.
We anticipate that a certain amount of Multipath Movies will be made by
traditional retailers. We may not be able to achieve retail sales at prices
favorable to us. We have no prior experience in developing or managing a retail
sales channel or selling products in retail stores. We are currently expending
resources to develop a retail sales channel, which expenditures must be made
before we realize any significant retail sales. The competition for shelf space
in retail stores is intense. We expect that our products will constitute a small
percentage of a retailer's sales volume, and we cannot be certain that retailers
will provide our products with adequate levels of shelf space and promotional
support. Due to the increased competition for limited retail shelf space and
promotional resources, retailers and distributors increasingly are in a better
position to negotiate favorable terms of sale, including terms relating to price
discounts, product return rights and cooperative market development funds.
Increased competition could result in loss of shelf space for our products at
retail stores, as well as significant price competition, any of which could
adversely affect our sales volume and the price we receive for our products.
WE MAY ENCOUNTER PROBLEMS IN CONNECTION WITH OUR ACQUISITION OF THE AUCTION
CHANNEL, WHICH MAY INCREASE THE COSTS OF THE ACQUISITION AND DISTRACT
MANAGEMENT'S ATTENTION FROM OPERATING THE COMBINED BUSINESS.
In July 1999, we acquired Trojan Television Limited, a London-based
company doing business as The Auction Channel. The Auction Channel integrates
live satellite, cable TV and Web broadcasts of auction events conducted by
auction houses, allowing for participants to watch auction events on television
and use the Internet or their telephone to bid simultaneously with people
actually present at the auction house. We have very little experience in
acquiring businesses and will likely encounter difficulties in integrating The
Auction Channel's operations with our existing operations, which may result in
unexpected costs and adversely affect our operating results. In addition, the
integration will require the dedication of management resources, which may
temporarily distract management's attention from the day-to-day operations of
the two companies and adversely affect our operating results. Some of the
difficulties we expect to encounter include, among others, those related to:
o integrating Brilliant's and The Auction Channel's management staffs;
o retaining The Auction Channel's key management and technical
personnel; and
o coordinating the operation of geographically separated organizations
with distinct cultures.
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THE AUCTION CHANNEL MAY NEVER BE PROFITABLE, WHICH WILL ADVERSELY AFFECT OUR
CONSOLIDATED OPERATIONS.
The Auction Channel commenced operations in July 1996 and, accordingly,
has a limited operating history upon which to evaluate its future prospects.
There can be no assurance that The Auction Channel will achieve profitability or
implement its business strategy. The Auction Channel had net losses of
approximately $310,000 in fiscal 1997, $485,000 in fiscal 1998, $1,978,000 for
the fiscal year ended June 30, 1999 and $958,000 for the six months ended
December 31, 1999, and an accumulated deficit of $3,731,000 as of December 31,
1999 relating to net losses from the period from July 1, 1996 through December
31, 1999. We expect that The Auction Channel will continue to sustain losses at
least for the next twelve months.
IF THE AUCTION CHANNEL LOSES ITS LICENSE TO THE COMPUTER SOFTWARE AND HARDWARE
TECHNOLOGIES IT USES IN ITS BUSINESS, THE AUCTION CHANNEL MAY NOT BE ABLE TO
CONTINUE TO SELL ITS PRODUCTS AND SERVICES.
Many of the underlying computer software and hardware technologies used
by The Auction Channel are licensed from Articulate UK Limited. The Auction
Channel has, with respect to these technologies, a worldwide license, with
rights to exploit and improve the software, patents, technology, documentation
and know how developed or owned or licensable by Articulate UK. If The Auction
Channel loses its rights to the computer software and hardware technologies it
licenses from Articulate UK as a result of a dispute with Articulate UK or
otherwise, The Auction Channel will not be able to continue to sell its products
and services. If this occurs, The Auction Channel's revenues will be
substantially reduced.
PRODUCT RETURNS THAT EXCEED OUR ANTICIPATED RESERVES COULD RESULT IN WORSE THAN
EXPECTED OPERATING RESULTS.
At the time we ship our products to retailers we will establish
reserves, including reserves that estimate the potential for future product
returns. Product returns or price protection concessions that exceed our
reserves could increase the magnitude of quarterly fluctuations in our operating
and financial results. Furthermore, if we incorrectly assess the
creditworthiness of customers who receive our products on credit, we could be
required to significantly increase the reserves previously established. We
cannot be certain that any future write-offs will not occur or that amounts
written off will not have a material adverse effect on our business and depress
the market price of our common stock. Actual returns to date have been within
management's estimates.
FLUCTUATIONS IN OPERATING RESULTS MAY RESULT IN UNEXPECTED REDUCTIONS IN REVENUE
AND STOCK PRICE VOLATILITY.
We operate in an industry that is subject to significant fluctuations
in operating results from quarter to quarter, which may lead to unexpected
reductions in revenues and stock price volatility. Factors that may influence
our quarterly operating results include:
o the introduction or enhancement of software products and technology by
us and our competitors;
o our ability to produce and distribute retail packaged versions of
Multipath Movies in advance of peak retail selling seasons;
o our ability to create appealing content which will generate
advertising revenue; and
o our ability to enter into revenue share agreements with third party
web sites.
Additionally, a majority of the unit sales for a product typically
occurs in the quarter in which the product is introduced. As a result, our
revenues may increase significantly in a quarter in which a major product
introduction occurs and may decline in following quarters.
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IF WE DO NOT IMPROVE OUR SOFTWARE TOOLS TO PRODUCE NEW, MORE ENHANCED MULTIPATH
MOVIES, OUR REVENUES WILL BE ADVERSELY AFFECTED.
The software tools that enable us to create Multipath Movies have been
developed over the past four years. Additional refinement of these tools are
necessary to continue to enhance the Multipath Movie format. If we cannot
develop improvements to these software tools, our Multipath Movies may not
obtain or maintain market acceptance and our revenues will be adversely
affected.
ERRORS OR DEFECTS IN OUR SOFTWARE TOOLS AND PRODUCTS MAY CAUSE A LOSS OF MARKET
ACCEPTANCE AND RESULT IN FEWER SALES OF OUR PRODUCTS.
Our products are complex and may contain undetected errors or defects
when first introduced or as new versions are released. In the past, we have
discovered software errors in some of our new products and enhancements after
their introduction into the market. Because our products are complex, we
anticipate that software errors and defects will be present in new products or
releases in the future. While to date these errors have not been material,
future errors and defects could result in adverse product reviews and a loss of,
or delay in, market acceptance of our products.
TO DEVELOP PRODUCTS THAT CONSUMERS DESIRE, WE MUST MAKE SUBSTANTIAL INVESTMENTS
IN RESEARCH AND DEVELOPMENT TO KEEP UP WITH THE RAPID TECHNOLOGICAL
DEVELOPMENTS THAT ARE TYPICAL IN OUR INDUSTRY.
The entertainment software market and the PC industry are subject to
rapid technological developments. To develop products that consumers desire, we
must continually improve and enhance our existing products and technologies and
develop new products and technologies that incorporate these technological
developments. We cannot be certain that we will have the financial and technical
resources available to make these improvements. We must make these improvements
while remaining competitive in terms of performance and price. This will require
us to make substantial investments in research and development, often times well
in advance of the widespread release of the products in the market and any
revenues these products may generate.
OURPROPRIETARY TECHNOLOGY MAY NOT BE ADEQUATELY PROTECTED FROM UNAUTHORIZED USE
BY OTHERS, WHICH COULD INCREASE OUR LITIGATION COSTS AND ADVERSELY AFFECT OUR
SALES.
Our ability to compete with other entertainment software companies
depends in part upon our proprietary technology. Unauthorized use by others of
our proprietary technology could result in an increase in competing products and
a reduction in our sales. We rely on trademark, trade secret and copyright laws
to protect our technology, and require all employees and third-party developers
to sign nondisclosure agreements. We cannot be certain, however, that these
precautions will provide meaningful protection from unauthorized use by others.
We do not copy-protect our software, so it may be possible for unauthorized
third parties to copy our products or to reverse engineer or otherwise obtain
and use information that we regard as proprietary. Our customers may take
inadequate precautions to protect our proprietary information. If we must pursue
litigation in the future to enforce our intellectual property rights, to protect
our trade secrets or to determine the validity and scope of the proprietary
rights of others, we may not prevail and will likely make substantial
expenditures and divert valuable resources. In addition, many foreign countries'
laws may not protect us from improper use of our proprietary technologies
overseas. We may not have adequate remedies if our proprietary rights are
breached or our trade secrets are disclosed.
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IF OUR PRODUCTS INFRINGE ANY PROPRIETARY RIGHTS OF OTHERS, A LAWSUIT MAY BE
BROUGHT AGAINST US THAT COULD REQUIRE US TO PAY LARGE LEGAL EXPENSES AND
JUDGMENTS AND REDESIGN OR DISCONTINUE SELLING OUR PRODUCT.
We believe that our products, including our software tools, do not
infringe any valid existing proprietary rights of third parties. Any
infringement claims, however, whether or not meritorious, could result in costly
litigation or require us to enter into royalty or licensing agreements. If we
are found to have infringed the proprietary rights of others, we could be
required to pay damages, redesign the products or discontinue their sale. Any of
these outcomes, individually or collectively, could have a material adverse
effect on our business and financial condition.
OURSTOCK PRICE AND TRADING VOLUME FLUCTUATE WIDELY AND MAY CONTINUE TO DO SO IN
THE FUTURE. AS A RESULT, WE MAY EXPERIENCE SIGNIFICANT DECLINES IN OUR STOCK
PRICE.
The market price and trading volume of our common stock, which trades
on the American Stock Exchange, has been subject to substantial volatility,
which is likely to continue. This volatility may result in significant declines
in the price of our common stock. Factors that may cause these fluctuations
include:
o variations in quarterly operating results;
o the gain or loss of significant contracts;
o changes in management;
o announcements of technological innovations or new products by us or
our competitors;
o recommendations by securities industry analysts;
o dilution to existing stockholders resulting from the issuance of
additional shares of common stock; and
o short sales and hedging of our common stock.
Additionally, the stock market has experienced extreme price and
trading volume fluctuations that have affected the market price of securities of
many technology companies. These fluctuations have, at times, been unrelated to
the operating performances of the specific companies whose stock is affected.
The market price and trading volume of our stock may be subject to these
fluctuations.
IF OUR STOCK DOES NOT SUSTAIN A SIGNIFICANT TRADING VOLUME, STOCKHOLDERS MAY BE
UNABLE TO SELL LARGE POSITIONS IN OUR COMMON STOCK.
In the past, our common stock has not experienced significant trading
volume on a consistent basis and has not been actively followed by stock market
analysts. The average trading volume in our common stock may not increase or
sustain its current levels. As a result, we cannot be certain that an adequate
trading market will exist to permit stockholders to sell large positions in our
common stock.
BECAUSE OUR OFFICERS AND DIRECTORS OWN A SIGNIFICANT PORTION OF OUR COMMON
STOCK, THEY MAY BE ABLE TO INFLUENCE STOCKHOLDER VOTES AND DISCOURAGE OTHERS
FROM ATTEMPTING TO ACQUIRE US.
As of June 23, 2000, our officers and directors owned, in total,
approximately 14.3% of the outstanding shares of our common stock. As a result,
our officers and directors may be able to exert influence over the outcome of
all matters submitted to a vote of the holders of our common stock, including
the election of our Board of Directors. The voting power of these officers and
directors could also discourage others from seeking to acquire control of us
through the purchase of our common stock, which might depress the price of our
common stock.
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WE HAVE ADOPTED A NUMBER OF ANTI-TAKEOVER MEASURES THAT MAY DEPRESS THE PRICE OF
OUR COMMON STOCK.
Our adoption of a stockholders' rights plan, our ability to issue up to
700,000 shares of preferred stock and some provisions of our certificate of
incorporation and bylaws and of Delaware law could make it more difficult for a
third party to make an unsolicited takeover attempt of us. These anti-takeover
measures may depress the price of our common stock by making third parties less
able to acquire us by offering to purchase shares of our stock at a premium to
its market price. Our board of directors can issue up to 700,000 shares of
preferred stock and determine the price, rights, preferences, privileges and
restrictions, including voting rights, of those shares without any further vote
or action by our stockholders. Our board of directors could issue the preferred
stock with voting, liquidation, dividend and other rights superior to the rights
of our common stock. The rights of holders of our common stock will be subject
to, and may be adversely affected by, the rights of holders of the share
purchase rights and of any preferred stock that may be issued in the future. The
issuance of preferred stock, while providing desirable flexibility in connection
with possible acquisitions and other corporate purposes, could make it more
difficult for a third party to acquire a majority of our outstanding voting
stock.
OURSALE OF SHARES TO ST. ANNES AT A PRICE BELOW THE MARKET PRICE OF OUR COMMON
STOCK WILL HAVE A DILUTIVE IMPACT ON OUR STOCKHOLDERS.
We have entered into a securities purchase agreement with St. Annes
Investments, Ltd. that allows us to sell to St. Annes up to $6,000,000 worth of
shares of our common stock at a discount to the then-prevailing market price of
our common stock. If the market price is $4.00 or less, St. Annes will receive a
discount equal to 14% of the market price, and if the market price is greater
than $4.00, St. Annes will receive a discount equal to 12% of the market price.
Additionally, we have agreed to issue to St. Annes as a fee shares of common
stock having an aggregate market price equal to 2% of the purchase price of the
shares of common stock that are issued and sold to St. Annes under the
securities purchase agreement. Accordingly, the issuance of shares under the
securities purchase agreement will have a dilutive impact on our stockholders.
As a result, our net income or loss per share could be materially impact future
periods, and the market price of our common stock could be materially and
adversely affected. As of June 23, 2000, we have sold 230,075 shares of our
common stock for gross proceeds of $1,000,000. We also have issued 4,049 shares
of our common stock to St. Annes as a fee.
The table below sets forth the number of shares and the percentages of
our common stock that St. Annes would own if we elected to sell the remaining
$5,000,000 worth of stock under the purchase agreement. The share amounts and
the percentages include 234,124 shares already issued to St. Annes under the
securities purchase agreement and shares St. Annes will receive as a fee under
the securities purchase agreement. The share amounts and the percentages are
based on our closing share price of $5.00 on June 23, 2000, and on assumed
closing share prices of $3.75, $2.50 and $1.25, which prices represent a 25%,
50% and 75% decline, respectively, in our June 23, 2000 closing share price. The
percentages are also based on 14,704,844 shares of our common stock outstanding
on June 23, 2000.
10
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE DECLINE IN PERCENTAGE OF
JUNE 23, 2000 ASSUMED SHARES OF COMMON OUTSTANDING
CLOSING PRICE CLOSING PRICE STOCK COMMON STOCK
--------------------- ------------- ---------------- --------------
<S> <C> <C> <C>
-- $5.00 1,390,488 8.64%
25% $3.75 1,811,179 11.0%
50% $2.50 2,599,706 15.0%
75% $1.25 4,965,287 25.2%
</TABLE>
WE MAY NOT BE ABLE TO SELL THE ENTIRE $6,000,000 WORTH OF SHARES OF OUR COMMON
STOCK TO ST. ANNES WITHOUT OBTAINING STOCKHOLDER APPROVAL, WHICH MAY REQUIRE
THAT WE SEEK ALTERNATIVE SOURCES OF FINANCING THAT MAY NOT BE AVAILABLE ON
TERMS FAVORABLE TO US.
Under the rules of the American Stock Exchange, we cannot sell to St.
Annes under our securities purchase agreement more than 1,881,800 shares of
common stock unless we obtain stockholder approval of the issuance of shares in
excess of this amount. Accordingly, if the average price at which we sell our
stock to St. Annes under the securities purchase agreement is less than $3.19
per share, we will not be able to sell the entire $6,000,000 worth of shares of
our common stock to St. Annes without first obtaining stockholder approval. If
we are unable to obtain stockholder approval, or if we choose not to pursue
stockholder approval, we may be required to seek alternative sources of
financing to fund our working capital requirements. We cannot guarantee that
additional financing will be available or that, if available, it can be obtained
on terms favorable to our stockholders and us.
DECREASES IN THE PRICE OF OUR COMMON STOCK COULD INCREASE SHORT SALES OF OUR
COMMON STOCK BY THIRD PARTIES, WHICH COULD RESULT IN FURTHER REDUCTIONS IN
THE PRICE OF OUR COMMON STOCK.
Our sales of common stock to St. Annes at a discount to the market
price of our common stock could result in reductions in the market price of our
common stock. Downward pressure on the price of our common stock could encourage
short sales of the stock by third parties. Material amounts of short selling
could place further downward pressure on the market price of the common stock. A
short sale is a sale of stock that is not owned by the seller. The seller
borrows the stock for delivery at the time of the short sale, and buys back the
stock when it is necessary to return the borrowed shares. If the price of the
common stock declines between the time the seller sells the stock and the time
the seller subsequently repurchases the common stock, then the seller sold the
shares for a higher price than he purchased the shares and may realize a profit.
FORWARD-LOOKING STATEMENTS
This prospectus contains statements that constitute forward-looking
statements within the meaning of Section 21E of the Exchange Act of 1934 and
Section 27A of the Securities Act of 1933. The words "expect," "estimate,"
"anticipate," "predict," "believe" and similar expressions and variations
thereof are intended to identify forward-looking statements. Such statements
appear in a number of places in this prospectus and include statements regarding
our intent, belief or current expectations regarding our strategies, plans and
objectives, our product release schedules, our ability to design, develop,
manufacture and market products, our intentions with respect to strategic
acquisitions, and the ability of our products to achieve or maintain commercial
acceptance. Any forward-looking statements are not guarantees of future
performance and involve risks and uncertainties. Actual results may differ
materially from those projected in this prospectus, for the reasons, among
others, described in the Risk Factors section beginning on page 4. You should
read the Risk Factors section carefully, and should not place undue reliance on
any forward-looking statements, which speak only as of the date of this
prospectus. We undertake no obligation to release publicly any updated
information about forward-looking statements to reflect events or circumstances
occurring after the date of this prospectus or to reflect the occurrence of
unanticipated events.
11
<PAGE>
USE OF PROCEEDS
Unless otherwise indicated in the applicable prospectus supplement, the
net proceeds from the sale of Common Stock offered hereby will be used for
general corporate purposes. We expect from time to time to evaluate the
acquisition of products, businesses and technologies for which a portion of the
net proceeds may be used. Currently, however, we do not have any understandings,
commitments or agreements with respect to any material acquisitions for which a
portion of the net proceeds may be used.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You can read and
copy these documents at the SEC's Public Reference Room, located at 450 Fifth
Street, NW, Room 1024, Washington D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. Our SEC
filings are also available on the SEC's website at "http://www.sec.gov." You can
also read our SEC filings at the American Stock Exchange, 86 Trinity Plaza, New
York, New York.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede the information in this prospectus.
We incorporate by reference the documents listed below and any future filings
made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934:
o Annual Report on Form 10-KSB for the year ended December 31, 1999.
o Quarterly Report on Form 10-QSB for the quarter ended March 31, 2000.
o Proxy Statement dated May 16, 2000, filed on April 28, 2000 in
connection with our June 23, 2000 Annual Meeting of Stockholders.
o Description of our capital stock contained in our Registration
Statement on Form 8-A, filed on October 29, 1996, as amended by our
Registration Statement on Form 8-A/A, filed on November 20, 1996.
You may request a copy of the above information incorporated by
reference, at no cost, by writing to or calling:
Michael Ozen
Chief Financial Officer
Brilliant Digital Entertainment, Inc.
6355 Topanga Canyon Boulevard, Suite 120
Woodland Hills, California 91367
(818) 615-1500
This prospectus is part of a registration statement we filed with the
SEC. You should rely only on the information incorporated by reference or
provided in this prospectus and the Registration Statement. We have not
authorized anyone else to provide you with different information. You should not
assume that the information in this prospectus or any supplement is accurate as
of any date other than the date on the front of those documents.
12
<PAGE>
PLAN OF DISTRIBUTION
We may sell the Common Stock through underwriters, agents or dealers or
directly to purchasers. A prospectus supplement will set forth the terms of each
specific offering, including the name or names of any underwriters or agents,
the purchase price of the Common Stock and the proceeds to us from such sales,
any delayed delivery arrangements, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale, the Common Stock will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The Common
Stock may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more
firms acting as underwriters. The underwriter or underwriters with respect to a
particular underwritten offering and, if an underwriting syndicate is used, the
managing underwriter or underwriters will be set forth on the cover of such
prospectus supplement. Unless otherwise set forth in the prospectus supplement,
the underwriters will be obligated to purchase all the Common Stock if any are
purchased.
During and after an offering through underwriters, the underwriters may
purchase and sell the Common Stock in the open market. These transactions may
include overallotment and stabilizing transactions and purchases to cover
syndicate short positions created in connection with the offering. The
underwriters also may impose a penalty bid, under which selling concessions
allowed to syndicate members or other broker-dealers for the Common Stock they
sell for their account may be reclaimed by the syndicate if the syndicate
repurchases the Common Stock in stabilizing or covering transactions. These
activities may stabilize, maintain or otherwise affect the market price of the
Common Stock then offered, which may be higher than the price that might
otherwise prevail in the open market, and, if commenced, may be discontinued at
any time.
We may sell the Common Stock directly or through agents we designate
from time to time. Any agent involved in the offer or sale of the Common Stock
covered by this prospectus will be named, and any commissions payable by us to
an agent will be set forth, in a prospectus supplement relating thereto. Unless
otherwise indicated in a prospectus supplement, any such agent will be acting on
a best efforts basis for the period of its appointment.
If dealers are used in any of the sales of Common Stock covered by this
prospectus, we will sell Common Stock to dealers as principals. The dealers may
then resell the Common Stock to the public at varying prices the dealers
determine at the time of resale. The names of the dealers and the terms of the
transactions will be set forth in a prospectus supplement.
We may sell the Common Stock directly to institutional investors or
others who may be deemed to be underwriters within the meaning of the Securities
Act with respect to any sale thereof. The terms of any such sales will be
described in a prospectus supplement.
If so indicated in a prospectus supplement, we will authorize agents,
underwriters or dealers to solicit offers from certain types of institutions to
purchase Common Stock from us at the public offering price set forth in the
prospectus supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. These contracts will be
subject only to those conditions set forth in the prospectus supplement, and the
prospectus supplement will set forth the commission payable for solicitation of
such contracts.
13
<PAGE>
Agents, dealers and underwriters may be entitled under agreements
entered into with us to indemnification by us against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which such agents, dealers or underwriters may be required to make
in respect thereof. Agents, dealers and underwriters may be customers of, engage
in transactions with, or perform services on our behalf.
LEGAL MATTERS
Troop Steuber Pasich Reddick & Tobey, LLP, Los Angeles, California, has
rendered to Brilliant Digital Entertainment, Inc. a legal opinion as to the
validity of the common stock covered by this prospectus.
EXPERTS
The financial statements of Brilliant Digital Entertainment, Inc. as of
December 31, 1999 and for each of the two years in the period ended December 31,
1999 incorporated in this prospectus by reference to the Annual Report on Form
10-KSB of Brilliant Digital Entertainment, Inc. for the fiscal year ended
December 31, 1999 have been incorporated in this prospectus in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on their
authority as experts in auditing and accounting.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table itemizes the expenses incurred by the Registrant in
connection with the offering. All the amounts shown are estimates except the
Securities and Exchange Commission registration fee.
<TABLE>
<CAPTION>
<S> <C>
Registration fee - Securities and Exchange Commission...... $ 5,572
Legal Fees and Expenses.................................... 10,000
Accounting Fees and Expenses............................... 1,000
Miscellaneous Expenses..................................... 500
--------
TOTAL.............................................. $ 17,072
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation and its Bylaws provide
for the indemnification by the Registrant of each director, officer and employee
of the Registrant to the fullest extent permitted by the Delaware General
Corporation Law, as the same exists or may hereafter be amended. Section 145 of
the Delaware General Corporation Law provides in relevant part that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful.
In addition, Section 145 provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper. Delaware law further provides that nothing
in the above described provisions shall be deemed exclusive of any other rights
to indemnification or advancement of expenses to which any person may be
entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise.
The Registrant's Certificate of Incorporation provides that a director
of the Registrant shall not be liable to the Registrant or its stockholders for
monetary damages for breach of fiduciary duty as a director.
II-1
<PAGE>
Section 102(o)(7) of the Delaware General Corporation Law provides that a
provision so limiting the personal liability of a director shall not eliminate
or limit the liability of a director for, among other things: breach of the duty
of loyalty; acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law; unlawful payment of dividends; and
transactions from which the director derived an improper personal benefit.
The Registrant has entered into separate but identical indemnity
agreements (the "Indemnity Agreements") with each director of the Registrant and
certain officers of the Registrant (the "Indemnitees"). Pursuant to the terms
and conditions of the Indemnity Agreements, the Registrant indemnified each
Indemnitee against any amounts which he or she becomes legally obligated to pay
in connection with any claim against him or her based upon any action or
inaction which he or she may commit, omit or suffer while acting in his or her
capacity as a director and/or officer of the Registrant or its subsidiaries,
provided, however, that Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Registrant and, with respect to any criminal action, had no reasonable cause
to believe Indemnitee's Conduct was unlawful.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
5.1 Opinion and Consent of Troop Steuber Pasich Reddick & Tobey, LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Troop Steuber Pasich Reddick & Tobey, LLP (included in
Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
Common Stock offered (if the total dollar value of Common Stock offered would
not exceed that which was registered) and any deviation from the low or high and
of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
II-2
<PAGE>
Commission by the registrants pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the Common Stock offered therein, and
the offering of such Common Stock at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the Common Stock being registered which remain unsold at the termination
of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
Common Stock offered therein, and the offering of such Common Stock at that time
shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of periodic
report pursuant to Section 13 or 15(d) of the Exchange Act containing
information required to be included in a post-effective amendment that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the Common Stock offered therein, and the
offering of such Common Stock at that time shall be deemed to be the initial
bona fide offering thereof.
The undersigned Registrant hereby undertakes to file, during any period
in which offers or sales are being made, a post-effective amendment to this
Registration Statement to include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
The undersigned Registrant hereby undertakes to remove from
registration by means of a post-effective amendment any of the Common Stock
being registered which remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14 or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the Common Stock being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant undertakes that: (1) for purposes of
determining any liability under the Securities Act, the information omitted from
the form of prospectus as filed as part of the registration statement in
reliance upon Rule 430A and contained in the form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of the registration statement as of the time it was
declared effective; and (2) for the purpose of determining any
II-3
<PAGE>
liability under the Securities Act, each post-effective amendment that contained
a form of prospectus shall be deemed to be a new registration statement relating
to the Common Stock offered therein, and the offering of such Common Stock at
that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and authorized this Registration
Statement to be signed on its behalf by the undersigned, in the City of Los
Angeles, State of California, on June 29, 2000.
BRILLIANT DIGITAL ENTERTAINMENT, INC.
By: /S/ MICHAEL OZEN
-------------------------------------
Michael Ozen, Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Mark
Dyne and Michael Ozen, and each of them, as his true and lawful
attorneys-in-fact and agents with full power of substitution and resubstitution,
for him and his name, place and stead, in any and all capacities, to sign any or
all amendments (including post effective amendments) to this Registration
Statement and a new Registration Statement filed pursuant to Rule 462(b) of the
Securities Act of 1933 and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the foregoing, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ------- ------
<S> <C> <C>
/S/ MARK DYNE
--------------------------- Chief Executive Officer and Chairman June 29, 2000
Mark Dyne of the Board of Directors
/S/ KEVIN BERMEISTER President and Director June 29, 2000
---------------------------
Kevin Bermeister
/S/ MICHAEL OZEN Chief Financial Officer (Principal Financial June 29, 2000
--------------------------- and Accounting Officer ) and Secretary
Michael Ozen
/S/ MARK MILLER Vice President, Operations and Production June 29, 2000
--------------------------- and Director
Mark Miller
/S/ DIANA MARANON Director June 29, 2000
---------------------------
Diana Maranon
/S/ RAY MUSCI Director June 29, 2000
---------------------------
Ray Musci
Director
---------------------------
Garth Saloner
/S/ JEFF SCHEINROCK Director June 29, 2000
---------------------------
Jeff Scheinrock
</TABLE>
II-5
<PAGE>
EXHIBITS INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
5.1 Opinion and Consent of Troop Steuber Pasich Reddick & Tobey, LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Troop Steuber Pasich Reddick & Tobey, LLP (included in
Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
Page II-6
