Digital Domain Media Group, Inc.

CIK:0001490930|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenues:
Production revenues	$ 28,707	$ 21,496	$ 58,865	$ 59,400
Grant revenues from governmental agencies	879	808	1,757	1,461
Licensing revenue	3,290		3,380
Tuition revenue	89		104
Total revenues	32,965	22,304	64,106	60,861
Costs and expenses:
Cost of revenues, excluding depreciation and amortization	34,136	18,660	67,058	49,582
Depreciation expense	4,128	2,806	7,759	5,676
Selling, general and administrative expenses	16,767	20,768	27,746	31,617
Amortization of intangible assets	862	862	1,725	1,725
Total costs and expenses	55,893	43,096	104,288	88,600
Operating loss	(22,928)	(20,792)	(40,182)	(27,739)
Interest and finance (expense) credit:
Issuance of and changes in fair value of warrant and other debt-related liabilities	(3,584)	(46,295)	700	(75,260)
Amortization of discount and issuance costs on notes payable	(1,987)	(3,545)	(3,586)	(6,558)
Losses on debt extinguishments	(7,016)	(2,226)	(7,016)	(2,226)
Interest expense on notes payable	(925)	(708)	(1,595)	(1,210)
Interest expense on capital and governmental lease obligations	(658)	6	(1,328)	(312)
Other income (expense), net	375	437	728	1,504
Loss before income taxes	(36,723)	(73,123)	(52,279)	(111,801)
Income tax expense			9	250
Net loss before non-controlling interests	(36,723)	(73,123)	(52,288)	(112,051)
Net loss attributable to non-controlling interests	825	1,264	1,558	1,067
Net loss attributable to common stockholders	(35,898)	(71,859)	(50,730)	(110,984)
Statements of Comprehensive Loss:
Net loss attributable to common stockholders	(35,898)	(71,859)	(50,730)	(110,984)
Unrealized gain (loss) from foreign currency translation	(22)	7	15	70
Comprehensive loss	$ (35,920)	$ (71,852)	$ (50,715)	$ (110,914)
Weighted average number of common shares outstanding:
Basic (in shares)	41,907,598	15,885,271	40,942,009	15,052,696
Diluted (in shares)	45,129,012	15,885,271	44,163,423	15,052,696
Basic loss per share:
Loss before non-controlling interests (in dollars per share)	$ (0.88)	$ (4.60)	$ (1.28)	$ (7.44)
Net loss attributable to non-controlling interests (in dollars per share)	$ 0.02	$ 0.08	$ 0.04	$ 0.07
Basic loss per share attributable to common stockholders (in dollars per share)	$ (0.86)	$ (4.52)	$ (1.24)	$ (7.37)
Diluted loss per share:
Loss before non-controlling interests (in dollars per share)	$ (0.97)	$ (4.60)	$ (1.34)	$ (7.44)
Net loss attributable to non-controlling interests (in dollars per share)	$ 0.02	$ 0.08	$ 0.04	$ 0.07
Diluted loss per share attributable to common stockholders (in dollars per share)	$ (0.95)	$ (4.52)	$ (1.30)	$ (7.37)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities:
Net loss before non-controlling interests	$ (52,288)	$ (112,051)
Adjustments to reconcile net loss before non-controlling interests to net cash used in operating activities:
Depreciation and amortization of property and equipment and intangible assets	9,484	7,401
Amortization of discount on and issuance costs of notes payable	3,586	6,558
Interest added to principal on notes payable	271	124
Changes related to fair value of warrant and other debt - related liabilities	(700)	75,260
Loss on debt extinguishments	7,016	2,226
Stock-based compensation	6,428	14,604
Interest on government obligations	517	104
Decrease in earn out liability	(458)
Changes in operating assets and liabilities:
Contracts receivable	(6,116)	(759)
Prepaid expenses and other assets	208	(2,861)
Film inventory	(22,433)	(749)
Accounts payable and accrued liabilities	13,691	(105)
Advance payments and deferred revenue	7,272	(10,664)
Deferred revenue from governmental entities	(657)	4,575
Unearned revenue	(163)
Net cash used in operating activities	(34,342)	(16,337)
Cash flows from investing activities:
Purchases of property and equipment	(5,879)	(10,061)
Changes in restricted cash		907
Net cash used in investing activities	(5,879)	(9,154)
Cash flows from financing activities:
Proceeds from sale of common stock	10,500	22,001
Proceeds from issuance of notes payable	46,000	4,000
Exercise of Series B preferred stock put		(5,000)
Payments of stock issuance costs	(158)	(2,245)
Deferred offering costs paid		(2,641)
Repayments on notes payable	(27,770)	(554)
Payments on capital and governmental lease obligations	(2,440)	(717)
Payments of debt issuance costs	(3,209)	(63)
Purchase of treasury stock	(5,712)
Net cash provided by financing activities	17,211	14,781
Effect of exchange rates on cash and cash equivalents	181	33
Net decrease in cash and cash equivalents	(22,829)	(10,677)
Cash and cash equivalents at beginning of period	29,413	11,986
Cash and cash equivalents at end of period	6,584	1,309
Supplemental disclosure of cash flow information - cash paid during the period for:
Interest	543	1,072
Non-cash investing and financing activities:
Warrants issued as compensation in connection with financings and other transactions	30,014	2,000
Unamortized debt discounts eliminated upon debt extinguishments	6,004	3,429
Write-off of deferred debt issue costs upon debt extinguishments	1,940
Write-off of warrant and other debt related liabilities upon debt extinguishments	1,876
Debt discounts established after debt extinguishments	(2,804)	(1,204)
Increase in debt from debt restructuring	2,380
Deferred offering costs included in accounts payable and accrued liabilities at period end	450	348
Purchase of property and equipment in accounts payable at period end	717	1,417
Purchase of property and equipment with assets held in trust		20,997
Amortization of discount on bond obligation	195	41
Bond interest capitalized to construction-in-progress		864
Shares issued from exchange of subsidiary shares	3,297	50
Shares issued from deposits collected in the prior period		60
Stock issued not collected		23
Private placement costs in accounts payable at period end		$ 280

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 6,584	$ 29,413
Cash, held in trust - short-term	2,490	2,449
Contracts and other receivable	14,119	3,110
Tax credits receivable	2,365	2,365
Prepaid expenses and other assets	4,746	5,335
Total current assets	30,304	42,672
Cash, held in trust - long-term	4,153	4,233
Restricted cash	71	71
Property and equipment - net	78,483	80,141
Trade name	15,410	15,410
Unpatented technology - net	18,811	20,106
Other intangible assets - net	6,674	7,105
Goodwill	18,081	18,081
Deferred debt issuance costs - net	3,566	3,022
Film inventory	29,358	6,925
Other assets	114	75
Total assets	205,025	197,841
Current liabilities:
Accounts payable and accrued liabilities	33,773	21,474
Advance payments and deferred revenue	15,693	8,442
Deferred grant revenue from governmental agencies, short-term	2,988	2,988
Deferred land grant revenue, short-term	525	525
Government lease obligation, short-term	4,774	3,399
Short-term convertible and other notes payable - net	8,091	17,612
Warrant and other debt-related liabilities, short-term	5,599	6,462
Earn out liability, short-term	428	400
Unearned revenue, short-term	378	361
Current portion of capital lease obligations	904	763
Total current liabilities	73,153	62,426
Capital lease obligations, net of current portion	163	530
Warrant and other debt-related liabilities	57,018	20,930
Deferred grant revenue from governmental agencies	9,153	9,547
Long-term convertible and other notes payable - net	6,302	455
Deferred income tax liability	6,189	6,189
Deferred revenue land grant, net of current portion	19,513	19,775
Earn out liability, net of current portion	2,288	2,774
Government lease obligation - net	35,002	36,155
Unearned revenue, net of current portion	2,992	3,172
Other long-term liabilities	3,083
Total liabilities	214,856	161,953
Commitments and contingencies
Convertible preferred stock, $0.01 par value, 25,000,000 shares authorized at June 30, 2012 and December 31, 2011, respectively; including Preferred Stock A series 100,000 designated, respectively; no shares issued or outstanding at June 30, 2012 and December 31, 2011, respectively.
Stockholders' equity (deficit):
Common stock, $0.01 par value and 100,000,000 shares authorized at June 30, 2012 and December 31, 2011, 45,480,823 and 39,515,326 shares issued, and 43,563,481 and 39,384,003 outstanding as of June 30, 2012 and December 31, 2011, respectively.	456	396
Additional paid-in capital	237,424	213,651
Accumulated other comprehensive income	49	34
Accumulated deficit	(234,533)	(183,802)
Treasury stock, at cost	(14,812)	(829)
Total stockholders' equity (deficit) before non-controlling interests	(11,416)	29,450
Non-controlling interests	1,585	6,438
Total stockholders' equity (deficit)	(9,831)	35,888
Total liabilities, preferred stock and stockholders' equity (deficit)	$ 205,025	$ 197,841