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REGISTRATION NO. 333-29635
FILED UNDER RULE 424(B)(3)
UNAPIX ENTERTAINMENT, INC.
SUPPLEMENT NO. 1
DATED JANUARY 7, 1998
TO
PROSPECTUS
DATED JULY 21, 1997
The Company has obtained a short term loan from Mezzanine Financial Corp.
("Mezzanine"; such loan being referred to as the "Mezzanine Loan") and has also
obtained short term loans (the "Pearlman and Lawi Loans") from Messrs. Pearlman
and Lawi. Messrs. Pearlman and Lawi are officers and directors of the Company
and Mezzanine. In addition, Walter M. Craig, Jr., a director of the Company, is
also an officer and director of Mezzanine. The loans were extended in order to
enable the Company to fund program acquisitions in accordance with its current
expansion plans pending the expected completion of a private offering of
convertible notes described below. The Company usually charges interest of
between 1.25% and 1.5% per month on the advances it extends to producers in
connection with program acquisitions.
The Mezzanine Loan is in the amount of $750,000 and matures on December 31,
1998. Interest accrues at an annual rate of 15%; 2% per month for each of the
first three months of the Loan and 1% a month thereafter. The loan may be
prepaid at any time without premium or penalty. If the Mezzanine Loan is not
repaid within 30 days of its funding, Mezzanine will be entitled to receive
6,250 common stock purchase warrants ("Mezzanine Warrants") for every 30 day
period that the Mezzanine Loan has been outstanding, up to a maximum of 75,000
such warrants. Each Mezzanine Warrant will have a term expiring on June 30,
2003 and will entitle the holder to purchase one share of Common Stock at an
exercise price of $6.00 per share. Mezzanine has been granted a security
interest in substantially all of the Company's assets to secure the facility.
The Pearlman and Lawi Loans are demand loans in the aggregate amount of
$250,000; $150,000 of which was extended by Mr. Pearlman and $100,000 of which
was extended by Mr. Lawi. Outstanding amounts under the Pearlman and Lawi Loans
accrue interest at the rate of 12% per annum. Similar to the Mezzanine Loan,
the Pearlman and Lawi Loans can be prepaid at any time without premium or
penalty.
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The Company is currently offering to a select group of accredited
investors up to $5,000,000 principal amount of 10% Convertible Subordinated
Notes due June 30, 2003, convertible into Common Stock at a price of $5.00
per share (a "Note"). Proceeds from the offering are intended to be used
principally to acquire entertainment programming. For every $250,000
principal amount of Notes converted, the investor will also be entitled to
receive warrants to purchase 25,000 shares of Common Stock at an exercise
price of $6.00 per share expiring June 30, 2003 ("Warrants"). The Notes and
Warrants, and the shares of Common Stock issuable upon conversion or exercise
of the Notes and Warrants, are being offered in a private placement, pursuant
to an exemption to the registration requirements of the Securities Act of
1933, as amended, and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements. The
purchasers of the Notes will have certain registration rights with respect to
the shares of Common Stock issuable upon conversion or exercise of the Notes
or Warrants. The Company may, in its discretion, sell in excess of
$5,000,000 of Notes. There is no assurance that the offering will be
successfully completed or that the terms of the Notes will be identical to
the terms described herein.
Terms used herein and not otherwise defined shall have the meaning ascribed
thereto in the Prospectus.
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