UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Synthonics Technologies, Inc.
------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
------------------------------------------------------------------------------
(Title of Class of Securities)
8716Y107
------------------------------------------------------------------------------
(CUSIP Number)
Alex Sandel
Future Media Productions, Inc.
25136 Anza Drive
Valencia, CA 91355
With a copy to:
Murray Markiles, Esq.
Troop Steuber Pasich Reddick & Tobey, LLP
2029 Century Park East, 24th Floor
Century City, CA 90067
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
December 22, 1999
------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13D to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13(e), 13d-1(f) or 13d-1(g), check the following box
[].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see Notes).
(Continued on following pages)
<PAGE>
SCHEDULE 13D
- ------------------------------------------------------------------------------
PAGE 2 OF 10 PAGES
- ------------------------------------------------------------------------------
CUSIP NO. 8716Y107
- ------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Future Media Productions, Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS* WC (See Response to Item 3).
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e)
[]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0 (See Response to Item 5).
-----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 15,266,541 (See Response to Item 5).
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 0 (See Response to Item 5).
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 15,266,541 (See Response to Item 5).
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,266,541 (See Response to Item 5.)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
30.1% (See Response to Item 5.)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
Page 2 of 10
<PAGE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 3 of 10
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D (this "Statement") relates to the common
stock, par value $0.01 per share (the "Common Stock"), of Synthonics
Technologies, Inc., a Utah corporation (the "Company" or the "Issuer"), and is
being filed pursuant to Rule 13d-1 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
The address of the principal executive offices of the Company is 31324 Via
Colinas, Suite 106, Westlake Village, California 91362.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) This Statement is hereby filed by Future Media Productions, Inc., a
corporation organized in California (the "Reporting Person"). The Reporting
Person and Argoquest 7, LLC, a limited liability company organized in Delaware,
have common owners. The Reporting Person is a vertically integrated manufacturer
and supplier of compact discs and digital versatile discs for the computer
hardware, software, on-line, publishing and entertainment industries, providing
mastering, replication and other services. Set forth below is the name, present
principal occupation and address in which such employment is conducted for each
of the executive officers of the Reporting Person:
Alex Sandel - Chairman of the Board of Directors, Chief
Executive Officer and President
David Moss - Vice President of Operations
Louis Weiss - Chief Financial Officer and Principal
Accounting Officer.
The business address of the Reporting Person and each of the above executive
officers of the Reporting Person is Future Media Productions, Inc., 25136 Anza
Drive, Valencia, CA 91355.
Set forth below is the name, present principal occupation and address in
which such employment is conducted for each of the directors of the Reporting
Person:
Alex Sandel - Chairman of the Board of Directors, Chief Executive
Officer and President of the Reporting Person
located at the address specified above
Diana Maranon - President and Managing Director of Averil Associates,
Inc., 2029 Century Park East, 19th Floor, Los Angeles,
CA 90067
Mark Dyne - Chairman of the Board of Directors and Chief
Executive Officer of Brilliant Digital
Entertainment, Inc., 6355 Topanga Canyon,
Suite 120, Woodland Hills, CA. Mr. Dyne is
also the Joint Managing Director of Sega Ozisoft Pty.
Sanford R. Climan - Managing Director of Entertainment Media Ventures,
LLC, 828 Moraga Drive, 2nd Floor, Los Angeles, CA
90049
Page 4 of 10
<PAGE>
Timothy Chaney - President of Virgin Interactive Entertainment,
74A Charlotte Street, London, W1P 1LR,
United Kingdom.
(d) During the last five years, neither the Reporting Person nor any of its
executive officers or directors has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) During the last five years, neither the Reporting Person nor any of its
executive officers and directors was a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, Federal
or State securities laws or finding any violation with respect to such laws.
(f) Except for Mark Dyne and Timothy Chaney, each of the executive officers
and directors of the Reporting Person set forth in (a) - (c) above are citizens
of the United States. Mark Dyne is a citizen of South Africa. Timothy Chaney is
a citizen of the United Kingdom.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On December 22, 1999, the Issuer issued to the Reporting Person a
convertible note exercisable into 11,518,096 shares of the Common Stock (the
"Note"). Pursuant to the terms and conditions of the Note, the Reporting Person
will have up to twelve months from the date of issuance to convert the Note. In
the event the Reporting Person does not elect to convert the Note in such time,
the principal amount due thereunder will be due on the second anniversary of the
date of issuance. The Note bears no interest for the first year from the date of
issuance and thereafter will accrue interest at the rate of interest of
outstanding borrowings made in the ordinary course of business of the Reporting
Person, unless the Note is converted. The Reporting Person purchased the Note
from the Issuer for (i) $500,000 in cash and (ii) services provided by the
Reporting Person for the benefit of the Issuer consisting of replication and
packaging services at the expense of the Reporting Person of up to two million
CD-ROMS (in the aggregate) for digital catalog programs entered into by the
Issuer with its customers and establishment by the Reporting Person of a
separate entity wholly owned by the Reporting Person to develop and produce 3D
digital catalogs on behalf of the Issuer for the Issuer's customers. Under the
terms and conditions of the Note, the Reporting Person has agreed that in the
event the Note is not converted, the services to be provided by the Reporting
Person for the benefit of the Issuer as described above will remain contractual
obligations of the Reporting Person.
The Reporting Person paid for the Note, in such part as described above, in
cash from working capital funds. No part of the purchase price for the Note has
been obtained or will be represented by funds or other consideration borrowed or
otherwise obtained for the purpose of acquiring, holding, trading or voting the
securities.
In addition, pursuant to that certain Equity Agreement - Summary of Terms,
dated as of June 2, 1999 by and between the Issuer and Alex Sandel, and that
certain Assignment, dated as of June 2, 1999, by Alex Sandel for the benefit of
Argoquest 7, LLC, an entity with common
Page 5 of 10
<PAGE>
owners as those of the Reporting Person ("Argoquest"), attached to the Schedule
13D filed by Argoquest on June 11, 1999 as "Exhibit A" and incorporated herein
by reference as though fully set forth herein (collectively, the "Agreement")
(all capitalized terms not otherwise herein defined shall have the meaning
ascribed to them in the Agreement) and that certain Subscription Agreement,
dated as of June 2, 1999, by and between Argoquest and the Issuer, attached to
the Amendment No. 1 to the Schedule 13D filed by Argoquest on December 3, 1999
as "Exhibit B" and incorporated herein by reference as though fully set forth
herein (the "Subscription Agreement"), the Issuer agreed to sell to Argoquest
and Argoquest agreed to purchase 2,300,000 shares of the Common Stock at a
purchase price of $.10 per share, for a total purchase price of $230,000.
Argoquest paid for such shares in cash from working capital funds.
Pursuant to the Agreement, the Issuer issued to Argoquest an option
exercisable for 1,448,445 shares of the Common Stock, at a purchase price of
$.10 per share, for an aggregate purchase price of $144,844 (the "Option"). The
Option became fully vested upon the signing of the Agreement and the purchase of
the 2,300,000 shares of the Common Stock, as described above. The Option is
outstanding until the later of (1) 90 days from the close of the Issuer's
current stage of financing or (2) 150 days from the date of the Agreement. In
addition, Argoquest has the right to purchase stock in the current stage of the
Issuer's financing being raised sufficient for Argoquest to maintain 10% of the
outstanding Common Stock (the "Purchase Option"). The Purchase Option is at the
same price or average price per share of the Common Stock that is obtained in
the Issuer's current stage of financing. Pursuant to the Subscription Agreement,
the Purchase Option shall expire if not exercised within 30 days of the date
Argoquest receives written notice from the Issuer of the terms, conditions and
anticipated closing date of the Current Round (as defined in the Subscription
Agreement).
On or about October 19, 1999, Argoquest exercised a portion of the Option
to acquire 800,000 shares of the Common Stock at a purchase price of $.10 per
share for an aggregate purchase price of $80,000. Argoquest still retains such
portion of the Option to acquire 648,445 shares of the Common Stock.
In addition, pursuant to the Agreement, the Issuer, among other things,
agreed to (1) give the Reporting Person, the exclusive right to service the
Issuer's CD-ROM replication needs, based on prevailing market prices for such
services, and (2) collaborate on a joint marketing program and presentation with
respect to the development and positioning of certain programs. Any proceeds
from the joint marketing program and presentation are for the full benefit of
the Issuer and will not be shared with Argoquest or any affiliates of Argoquest,
other than through participation of Argoquest's share of the Common Stock.
No part of the purchase price for the Common Stock, Option and/or Purchase
Option issued to Argoquest pursuant to the Agreement has been obtained or will
be represented by funds or other consideration borrowed or otherwise obtained
for the purpose of acquiring, holding, trading or voting the securities.
Page 6 of 10
<PAGE>
ITEM 4. PURPOSE OF THE TRANSACTION.
The Reporting Person acquired the Note for investment purposes. Pursuant to
the terms and conditions of the Note purchase by the Reporting Person, Alex
Sandel, the Chairman of the Board of Directors, Chief Executive Officer and
President of the Reporting Person, will join the Board of Directors of the
Issuer. In addition, the Issuer and the Reporting Person have agreed that the
Reporting Person will have the right to transfer its interest in the shares of
the Common Stock to an entity similarly owned and controlled by shareholders of
the Reporting Person.
The Reporting Person from time to time intends to review its investment in
the Issuer on the basis of various factors, including the Issuer's business,
financial condition, results of operations and prospects, general economic and
industry conditions, the securities markets in general and those for the
Issuer's securities in particular, as well as other developments and other
investment opportunities. Based upon such review and subject to the provisions
of the Note as set forth in Item 3 above, the Reporting Person will take such
actions in the future as it may deem appropriate, consistent with the securities
laws, in light of the circumstances existing from time to time. If the Reporting
Person believes that further investment in the Issuer is attractive, whether
because of the market price of the Issuer's securities or otherwise, it may
acquire Common Stock, pursuant to the exercise of the Note subject to the
provisions of the Note.
The Reporting Person currently has no plans or proposals to dispose of the
Note and/or some or all of the Common Stock the Reporting Person may acquire by
the exercise of the Note, PROVIDED, HOWEVER, that depending on market and other
factors, in the future, the Reporting Person may determine to dispose of some or
all of the Common Stock acquired by exercise of the Note in privately negotiated
transactions subject to the provisions of the Note.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The Reporting Person shares beneficial ownership with Argoquest of (i) the
3,748,445 shares of the Common Stock and the shares of the Common Stock issuable
under the Purchase Option of which beneficial ownership was reported on the
Amendment No. 1 to the Schedule 13D filed on December 3, 1999 by Argoquest and
(ii) the Note and the 11,518,096 shares of the Common Stock issuable thereunder.
As of December 22, 1999, the Reporting Person shares beneficial ownership in the
aggregate of 15,266,541 shares of the Common Stock and such shares that may be
issuable under the Purchase Option. The 15,266,541 shares of which the Reporting
Person is reporting beneficial ownership in this statement represents 30.1% of
the Common Stock outstanding on a fully diluted basis as of December 22, 1999
based on a total of 50,679,624 shares of the Common Stock outstanding on
December 22, 1999. Argoquest also will file an Amendment No. 2 to the Schedule
13D filed on June 11, 1999 reporting shared beneficial ownership of the shares
of the Common Stock reported in this statement.
(b) The Reporting Person has with Argoquest the shared power to vote or direct
the vote and dispose or direct the disposition of (i) the 3,748,445 shares of
the Common Stock and such shares that may be issuable under the Purchase Option
of which beneficial ownership was reported in the Amendment No. 1 to the
Schedule 13D filed by Argoquest on December 3, 1999 and (ii) the 11,518,096
shares of the Common Stock issuable under the Note. In the aggregate,
Page 7 of 10
<PAGE>
the Reporting Person has the shared power to vote or direct the vote and dispose
or direct the disposition of 15,266,541 shares of the Common Stock.
(c) Except as set forth herein, the Reporting Person has not engaged in any
transactions in the Common Stock during the past sixty (60) days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
The Agreement, attached as "Exhibit A" to the Schedule 13D filed by
Argoquest on June 11, 1999, is hereby incorporated herein by reference as though
fully set forth herein.
The Subscription Agreement, attached as "Exhibit B" to the Amendment No. 1
to the Schedule 13D filed by Argoquest on December 3, 1999, is hereby
incorporated herein by reference as though fully set forth herein.
The Standstill Agreement, attached as "Exhibit C" to the Amendment No. 1 to
the Schedule 13D filed by Argoquest on December 3, 1999, is hereby incorporated
herein by reference as though fully set forth herein.
Page 8 of 10
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Not applicable.
Page 9 of 10
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 30, 1999
Future Media Productions, Inc.
/S/ ALEX SANDEL
-------------------------------
By: Alex Sandel
Its: Chief Executive Officer and President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
