UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Digital Domain Media Group, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
25386U104
(CUSIP Number)
John C. Textor
10250 SW Village Parkway
Port St. Lucie, Florida 34987
(772) 345-8000
with a copy to:
David C. Scileppi, Esq.
Gunster, Yoakley & Stewart, P.A.
450 East Las Olas Blvd., Suite 1400
Fort Lauderdale, Florida 33301
Telephone: (954) 713-6433
(Name, Address and Telephone Number
of Person Authorized to
Receive Notices and Communications)
November 14, 2011
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e),
240.13d-1(f) or 240.13d-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 §240.13d-7 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 disclosures provided in a prior cover page.
The information required on 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 the Notes).
CUSIP No. 25386U104
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Page 2 of 7 Pages
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1.
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Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
John C. Textor, an individual
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2. Check the Appropriate Box
if a Member of a Group (See Instructions)
(a)
S
(b)
£
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4.
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Source of Funds (See Instructions)
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5.
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Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e)
Not applicable.
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6.
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Citizenship or Place of Organization
United States of America
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Number of
Shares Bene-
ficially Owned
by Each
Reporting Person With:
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7. Sole Voting Power
10,532,670 (1)
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8. Shared Voting Power
0
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9. Sole Dispositive Power
10,532,670 (1)
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10. Shared Dispositive Power
0
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11.
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Aggregate Amount Beneficially Owned by Each Reporting Person
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12.
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Check box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
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13.
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Percent of Class Represented by Amount in Row (11)
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14.
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Type of Reporting Person
IN
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(1)
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Consists of (i) 9,708,838 shares owned directly by the Reporting
Person; (ii) 373,832 shares owned directly by Wyndcrest DD Investment Holdings, LLC; and (iii) 450,000 shares covered
by options held by the Reporting Person to acquire shares of Common Stock that are exercisable within 60 days of August 28, 2012.
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(2)
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The percentage used herein and in the rest of this Schedule 13D is calculated
based on 43,563,481 shares of Common Stock outstanding as of August 14, 2012 as set forth in the Company’s Quarterly Report
on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2012.
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CUSIP No. 25386U104
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Page 3 of 7 Pages
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1.
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Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Wyndcrest DD Investment Holdings, LLC
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2. Check the Appropriate Box
if a Member of a Group (See Instructions)
(a)
S
(b)
£
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4.
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Source of Funds (See Instructions)
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5.
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Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e)
Not applicable.
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6.
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Citizenship or Place of Organization
Florida
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Number of
Shares Bene-
ficially Owned
by Each
Reporting Person With:
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7. Sole Voting Power
373,832
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8. Shared Voting Power
0
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9. Sole Dispositive Power
373,832
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10. Shared Dispositive Power
0
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11.
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Aggregate Amount Beneficially Owned by Each Reporting Person
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12.
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Check box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
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13.
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Percent of Class Represented by Amount in Row (11)
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14.
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Type of Reporting Person
OO
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CUSIP No. 25386U104
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Page 4 of 7 Pages
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Item 1. Security and Issuer
This filing pertains to the Common
Stock, $0.01 par value per share (“Common Stock”), of Digital Domain Media Group, Inc., a Florida corporation (the
“Company”). The principal executive offices of the Company are located at 10250 SW Village Parkway, Port St. Lucie,
Florida 34987. The percentage of shares of Common Stock reported owned by the persons named herein is based upon 43,563,481 shares
of Common Stock outstanding as of August 14, 2012 as set forth in the Company’s Quarterly Report on Form 10-Q filed with
the Securities and Exchange Commission on August 14, 2012. The holdings reported herein are as of the close of business on August
28, 2012.
Item 2. Identity and Background
This Schedule 13D is being filed
by John C. Textor and Wyndcrest DD Investment Holdings, LLC referred herein collectively as the “Reporting Persons.”
The principal business address for the Reporting Persons is 10250 SW Village Parkway, Port St. Lucie, Florida 34987.
The principal occupation of Mr. Textor is serving as the Chief Executive Officer and as Chairman
of the Board of Directors of the Company.
Wyndcrest DD Investment Holdings, LLC (“Wyndcrest”) is a Florida limited liability
company. The principal business of Wyndcrest is to hold an investment in the securities of the Company. The managing member of
Wyndcrest is Wyndcrest Holdings, LLC and the managing member of Wyndcrest Holdings, LLC is Textor Ventures, Inc. Mr. Textor, as
the president and sole shareholder of Textor Ventures, Inc., holds sole voting and dispositive power over the shares of Common
Stock beneficially owned by Wyndcrest DD Investment Holdings, LLC, and disclaims beneficial ownership of such securities except
to the extent of any pecuniary interest therein.
No Reporting Person has during the
last five years been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction resulting in
the Reporting Person being subject to any 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.
No Reporting Person has during the
last five years been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors).
Mr. Textor is a citizen of the United
States of America. Wyndcrest is a Florida limited liability company.
Item 3. Source and Amount of Funds or Other
Consideration
The shares of Common Stock that
are the subject of this Schedule 13D were acquired by Mr. Textor in the amount of $10,481,643, through a series of open market
transactions, using personal funds and funds borrowed by Mr. Textor under a personal line of credit discussed further in Item 6.
Item 4. Purpose of Transaction
The shares of Common Stock that
are the subject of this Schedule 13D consist of the following: (i) 1,176,471 shares of Common Stock acquired on November 18,
2011 in connection with the Company’s initial public offering; (ii) 7,750 shares of Common Stock acquired in open market
purchases on November 21, 2011; (iii) 40,000 shares of Common Stock acquired in open market purchases on May 17, 2012; and
(iv) 23,000 shares of Common Stock acquired in open market purchases on May 18, 2012. The subject shares were acquired by
Mr. Textor on each of these respective dates because of his belief that the acquisition of such shares on such dates
represented an attractive investment.
CUSIP No. 25386U104
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Page 5 of 7 Pages
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Since the date of the last acquisition of shares of Common Stock referenced in the preceding paragraph, the
Company announced it was reviewing with its financial advisor a broad range of strategic and financial alternatives to maximize
shareholder value, including seeking strategic minority investors in the entire company or various business segments; entering
into joint ventures or business combinations; selling or spinning-off subsidiaries or assets; or selling the Company. The Reporting
Persons strongly support the Company’s strategic review process because they believe it is likely to create additional value
for the Company’s shareholders. However, because the Reporting Persons believe (i) that the process is likely to take a few months and
(ii) that the current market capitalization of the Company is significantly less than the value of its underlying assets,
both of which are currently detrimental to the Company, the Reporting Persons will likely engage legal and financial advisors to assist the Reporting Persons in determining whether a
plan to acquire the Company by a group led by the Reporting Persons can be formulated in an attempt to increase shareholder value. Notwithstanding the foregoing,
the Reporting Persons reserve the right to change their plans at any time, as they deem appropriate, in light of their ongoing
evaluation of (i) the Company’s financial condition, business, operations, competitive position, prospects and/or share price;
(ii) industry, economic and/or securities markets conditions; (iii) the outcome of the Company’s review of strategic alternatives
referenced above; (iv) other investment opportunities available to the Reporting Persons and (v) other relevant factors.
Other than as discussed in the preceding
paragraph, the Reporting Persons do not have any plans or proposals which relate to or would result in: (a) the acquisition by
any person of additional securities of the Company, or the disposition of securities of the Company; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer
of a material amount of assets of the Company or any of its subsidiaries; (d) any change in the present Board of Directors of the
Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the Board
of Directors of the Company or the management of the Company; (e) any material change in the present capitalization or dividend
policy of the Company; (f) any other material change in the Company’s business or corporate structure; (g) changes in the
Company’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control
of the Company by any person; (h) causing a class of securities of the Company to be delisted from a national securities exchange
or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934, as amended; or (j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer
(a) The Reporting Persons may be
deemed to beneficially own an aggregate of 10,532,670 shares of Common Stock, constituting approximately 23.9% of the shares of
Common Stock outstanding, 373,832 of which, constituting less than 1% of the shares outstanding, are owned directly by Wyndcrest, and 450,000 of which are covered by currently unexercised options exercisable by their terms within
60 days of August 28, 2012.
(b) The Reporting Persons have the
sole power to vote or to direct the vote of, and sole power to dispose of or direct the disposition of, all of the shares of Common
Stock referenced in paragraph (a) of this Item 5.
(c) The Reporting Person have not
effected any transaction in the shares of Common Stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements,
Understandings or Relationships with Respect to Securities of the Issuer
On November 22, 2011, Mr. Textor entered into a Loan Agreement (the “Loan
Agreement”) with PBC Digital Holdings II, LLC, a Delaware limited liability company (“PBC”), Thomas J. Morrison
Article IX, a trust dated 12/10/2002, Thomas J. Morrison Trust dated 1/11/76, Glenmore Enterprise, Inc., and Carlos Morrison (the
“Lenders”) and PBC JT, LLC, a Delaware limited liability company, as administrative agent for the Lenders. PBC is an
affiliate of Palm Beach Capital Fund III, L.P. and PBC III Principals Fund, L.P., which are private equity funds that have reported
in a Schedule 13D/A filed on August 21, 2012 that they are beneficial owners of 37.7% of the Company’s Common Stock. Mr.
Textor used the proceeds from the Loan Agreement to purchase shares of the Company’s Common Stock on November 18, 2011.
Pursuant to the Loan
Agreement, the Lenders advanced Mr. Textor $10,000,000 plus an additional amount equal to the closing costs. The Loan
Agreement was amended on May 3, 2012, pursuant to which the Lenders advanced an additional $2,500,000. The cash advanced is
secured by (i) a pledge of 8,461,617 shares of the Company’s Common Stock and (ii) security interests on certain real
estate assets owned by Mr. Textor. Interest on the loan accrues at 8% per annum for the first ninety days of the term of the
Loan Agreement, 10% per annum for the next sixty days of the term of the Loan Agreement, and 12% thereafter. One-half of the
interest is payable monthly in cash and one-half of the interest is added to the principal balance of the advance. In the
Event of Default (as defined in the Loan Agreement), the interest rate will increase to 19% per annum. Mr. Textor repaid
$1,590,000 of the advance on March 29, 2012. The advance is due and payable on August 31, 2012. Mr. Textor and the Lenders
have agreed in principle to extend the due date of the Loan Agreement and are currently negotiating an extension of the
Loan Agreement.
Other than the foregoing, the Reporting Persons are not a party to any contract,
arrangement, understanding or relationship with respect to any securities of the Company, including, but not limited to, transfer
or voting of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss, or the giving or withholding of proxies.
CUSIP No. 25386U104
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Page 6 of 7 Pages
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Item 7. Material to Be Filed as Exhibits
7.1
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Agreement to File Joint Schedule 13D
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7.2
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Loan Agreement, dated November 22, 2011
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7.3
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First Amendment to Loan Agreement, dated May 3, 2012
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CUSIP No. 25386U104
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Page 7 of 7 Pages
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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.
Dated: August 29, 2012
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/s/ John C. Textor
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JOHN C. TEXTOR
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Wyndcrest DD Investment Holdings, LLC
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By: Wyndcrest Holdings, LLC,
its managing member
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By: Textor Ventures, Inc., its
managing member
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By:
/s/ John C. Textor
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John C. Textor, President
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