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Registration No. 33-80019
Filed under Rule 424 (b)(3)
UNAPIX ENTERTAINMENT, INC.
SUPPLEMENT NO. 2 DATED AUGUST 1, 1996
TO PROSPECTUS DATED FEBRUARY 16, 1996
AS PREVIOUSLY SUPPLEMENTED
BY SUPPLEMENT DATED
MAY 15, 1996
In June 1996, the Company's Board of Directors authorized the merger of A Pix
Entertainment, Inc. ("A Pix") into the Company. The Company owns 90.5% of the
capital stock of A Pix, the balance is held by Robert Baruc, the President of A
Pix and an Executive Vice President and Director of the Company. Pursuant to
the terms of the merger, Mr. Baruc will receive 200,000 shares of the Company's
common stock, $.01 par value per share ("Common Stock"), in exchange for his A
Pix interest. The valuation is based upon the recent growth and profitability
of A Pix. The Company plans to complete the merger as soon as practicable.
Also in June 1996, the Company entered into an agreement with an investor
relations firm pursuant to which the Company is obligated to issue to the firm
300,000 common stock purchase options. Each option entitles the holder to
purchase one share of Common Stock at a price of $3.875, which was the market
price as of the date of the agreement. The options will have a term of five
years. The Company is also obligated to issue an additional one hundred
thousand options to the firm which will expire within one year unless all of the
Company's Class B redeemable common stock purchase warrants ("Class B Warrants")
have been exercised prior to that time. If all the Class B Warrants are
exercised during the one year period, the 100,000 options will have the same
term as the other 300,000 options.
The Class B Warrants currently have an exercise price of $4.28 per share (after
adjusting for the Company's 5% stock dividend payable on May 6, 1996 to holders
of record of its common stock on April 22, 1996). In order for the Company to
redeem the Class B Warrants, the closing high bid price of the Common Stock on
each of 20 consecutive trading days (or such lesser number of days with the
consent of the underwriter from the Company's initial public offering, but not
less than 10 consecutive trading days) ending on the third business day prior to
the date on which notice of redemption is given must have been at least $5.71
per share. The shares issuable upon exercise of the options will have certain
registration rights.
In July 1996 the Company completed a private placement of approximately
$1,600,000 of Convertible Subordinated Notes, each of which bears interest at
10% per annum, is convertible into shares of the Company's Common Stock at a
price of $4.50 per share and is
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due on June 30, 2003. The Notes were issued with an aggregate of approximately
160,000 warrants, exercisable into shares of the Company's common stock at a
price of $6.00 per share and expiring on June 30, 2003. The notes and the
warrants, and the shares issuable upon conversion and exercise thereof, were
sold in a private placement and were not registered under the Securities Act of
1933 and can not be offered or sold in the United States absent registration or
an applicable exemption from registration requirements. However, the shares of
Common Stock issuable upon exercise and conversion of the Notes and Warrants
have certain registration rights
