Digital Domain Media Group Senior Lenders Agree to Limited Forbearance
05 September 2012 - 9:23PM
Business Wire
Digital Domain Media Group, Inc. (NYSE: DDMG) (the “Company”)
today announced that each of the holders of its six senior secured
convertible notes in the aggregate original principal amount of $35
million issued by the Company on May 7, 2012, (collectively, the
“Senior Notes”) has agreed to forbear (each, a “Forbearance”) from
enforcing its remedies under its Senior Note (and the security and
other agreements relating thereto) until such time as it elects to
withdraw such Forbearance on not less than 48 hours’ advance notice
to the Company.
As previously announced, the Company is continuing to evaluate
its alternatives, including (i), in conjunction with the holders of
the Senior Notes, a term sheet received from an institutional
investor proposing a senior secured debt financing transaction that
would potentially refinance the Company’s obligations under the
Senior Notes as well as provide operating funds to the Company, and
(ii) a term sheet received from a business partner of the
Company relating to a significant equity investment in an operating
subsidiary of the Company. There can be no assurance, however, that
any transaction, will be consummated, or, if consummated, that any
transaction will be on terms satisfactory to the Company. As
previously disclosed, an inability to quickly access additional
sources of liquidity to fund the Company’s current operating cash
needs would materially adversely affect its financial condition and
would require it to seek relief or protection from its
creditors.
As previously disclosed by the Company in a Current Report on
Form 8-K filed by the Company with the Securities and Exchange
Commission on September 4, 2012, each of the holders of the Senior
Notes advised the Company on August 21, 2012, that its Senior Note
is in default. In the event that any holder of the Senior Notes
withdraws its Forbearance, such holder may elect to pursue all of
its available remedies under its Senior Note (and the security and
other agreements relating thereto) arising as the result of an
Event of Default (as defined in such Senior Note), including,
without limitation, foreclosing on the first-priority security
interest in all of the personal property of the Company and its
subsidiaries held by the Collateral Agent (as defined in such
Senior Note) for the benefit of the holders of the Senior
Notes.
About Digital Domain Media Group
Digital Domain Media Group (DDMG: NYSE) leverages its expertise
in digital visual effects (VFX) and computer-generated (CG)
animation across a group of interrelated businesses. At its
foundation is Digital Domain Productions (DDPI), an award-winning
digital production company founded in 1993. This leading provider
of visuals has contributed to more than 90 major motion pictures,
including Titanic, the Transformers series, Pirates of the
Caribbean: At World’s End and TRON: Legacy, hundreds of
commercials, and recently created the virtual likeness of rapper
Tupac Shakur for Dr. Dre’s show at the Coachella Valley Music
Festival. Mothership, a DDPI subsidiary, focuses on creating
advertising, entertainment and branded content from concept to
completion, across multiple media platforms. DDMG, its work and its
employees have been recognized with numerous awards, including
seven from the Academy of Motion Picture Arts and Sciences. The
Company is building on its success in VFX to participate as a
co-producer in major productions and is currently co-producing the
upcoming live-action sci-fi feature film Ender’s Game, as well as
virtual likenesses for Elvis Presley to be jointly owned by CORE
Media Group and DDMG. DDMG also converts two-dimensional (2D)
imagery to three-dimensional (3D) imagery and holds key patents in
this area. The Company is also applying its CG expertise to produce
original, family-friendly animated feature films at its subsidiary
Tradition Studios. The first movie, The Legend of Tembo, is in
pre-production and two more features are in development. The
Company’s education subsidiary, the Digital Domain Institute, sets
a new standard in digital media education through a pioneering
public-private partnership with The Florida State University
College of Motion Picture Arts. DDMG is expanding its worldwide
footprint of the highest quality visual effects and animation at
the lowest possible cost through global partnerships in India and
China. The Company has studios in Los Angeles, San Francisco,
Florida and Vancouver and is currently establishing studios in
Beijing and Abu Dhabi. http://www.ddmg.co
Safe Harbor Statement
Certain statements in this press release constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements include
comments about the Company's plans, prospects, strategies and
future performance. They are made on the basis of our management’s
current expectations and beliefs, as well as a number of
assumptions regarding future events and business performance as of
the time the statements are made. Such forward-looking statements
are subject to known and unknown risks, uncertainties, assumptions
and other important factors, many of which are outside the
Company’s control. These could cause actual results to differ
materially from the results expressed or implied in the
forward-looking statements.
Such differences may result from actions taken by the Company,
as well as from developments beyond the Company’s control,
including, but not limited to:
- price volatility of the Company’s
common stock;
- changes in domestic and global economic
conditions, competitive conditions and consumer preferences;
- our dependence on a limited number of
large projects each year, and the timing of revenue flows from
those projects;
- developments in the status of strategic
initiatives taken by the Company;
- audience acceptance of feature films we
may co-produce; and
- rapid technological developments,
including new forms of entertainment.
Further information on these and other factors and risks that
could affect our business is included in filings we make with the
Securities and Exchange Commission from time to time, including
under the heading “Risk Factors” in our Annual Report on Form 10-K
for the year ended December 31, 2012 and our Quarterly Report on
Form 10-Q for the quarter ended June 30, 2012. These documents are
available on the SEC Filings subsection of the Investors section of
the Company’s website at: http://www.ddmg.co.
Information on our website is not part of this press release.
All information provided in this press release is as of September
5, 2012, and the Company undertakes no obligation to update
publicly the information contained in this press release, or any
forward-looking statements, to reflect new information, events or
circumstances, or to reflect the occurrence of unanticipated
events.
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