UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 30, 2010
DOLPHIN DIGITAL MEDIA, INC.
(Exact name of registrant as specified in its charter)
         
Nevada   0-50621   86-0787790
         
(State or other jurisdiction
of incorporation) 		  (Commission File Number)   (IRS Employer Identification No.)
     

804 Douglas Road, Executive Tower Bldg.,
Suite 365, Miami, Florida 		   
33134
     
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code: (305) 774-0407
Registrant’s facsimile number, including area code: (954) 774-0405
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

Item 1.01 Entry into a Material Definitive Agreement
On December 30, 2010, Dolphin Digital Media, Inc. (the “Company”) entered into an agreement (the “Agreement”) for a debt to equity conversion of a $500,000 outstanding convertible note and accrued interest thereon. Under the terms of the Agreement, the Company will convert the convertible note and accrued interest into shares of its preferred stock (the “Preferred Stock”). The holder of the convertible note, T Squared Investments LLC (the “Investor”) shall receive 542,753 shares of the Company’s Preferred Stock. The Preferred Stock will be initially convertible into four (4) shares of Company common stock (the “Conversion Ratio”).
The Preferred Stock Conversion Ratio is subject to adjustment in the event of a stock dividend, stock splits and certain reclassifications. All the outstanding shares of Preferred Stock shall be converted into Company common stock upon the close of business on the business day immediately preceding the date fixed for consummation of a Change of Control of the Company as such terms shall be defined in the appropriate certificate of designation. The shares of Preferred Stock shall have no voting rights. The shares of Preferred Stock will be issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933. This shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein.
On January 5, 2011, the Company issued a press release describing the transaction.
Item 9.01 Financial Statements and Exhibits
         
Exhibit #   Description
       
 
  10.1    
Amendment to Preferred Stock Purchase Agreement dated December 30, 2010, by and among Dolphin Digital Media, Inc. and T Squared Investments, LLC
       
 
  99.1    
Press Release Dated January 5, 2011
The Investor is the holder of existing shares of the Company’s Preferred Stock and combined with Preferred Stock to be issued shall hold 1,402,753 shares of Preferred Stock.

 

1

 

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
         
Date: January 5, 2011  DOLPHIN DIGITAL MEDIA, INC.
  		 
  By:   /s/ William O’Dowd IV    
    Name:   William O’Dowd IV   
    Title:   Chief Executive Officer   

 

2

Exhibit 10.1
AMENDMENT TO PREFERRED STOCK PURCHASE AGREEMENT
December 30, 2010
Reference is hereby made to that certain PREFERRED STOCK PURCHASE AGREEMENT (the “Agreement”) dated October 4, 2007, by and among Dolphin Digital Media, Inc (formerly Logica Holdings Inc., the “Company” ), and T Squared Investment LLC ( “T Squared” or the “Investor”). All capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Agreement.
WHEREAS, the parties to the Agreement (the “Parties” ) wish to amend the Agreement to account for the conversion by Investor of $500,000 of convertible debt of the Company, plus interest thereon, into preferred stock of the Company;
NOW THEREFORE, in consideration of the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
1). In consideration for the conversion of $500,000 of convertible debt in the Company, plus interest thereon, which total represents all of Investor’s debt holdings of the Company, Investor shall receive 542,753 shares of Company’s Series A Preferred Stock which, when combined with Investor’s current ownership of 500,000 shares of Company’s Series A Preferred Stock, brings Investor’s total ownership of Company’s Series A Preferred Stock to 1,042,753 shares.
2). Each share of Series A Preferred Stock shall initially be convertible into four (4) shares of Common Stock (the “ Conversion Ratio ”), subject to the limitations within the Certificate of Designation. Thus, when fully converted, Investor’s 1,042,753 shares of Series A Preferred Stock will represent 4,171,012 shares of Company’s Common Stock.
3). If the Company, at any time while the Series A Preferred Stock is outstanding: (A) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company pursuant to this Series A Preferred Stock), (B) subdivide outstanding shares of Common Stock into a larger number of shares, (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of shares of the Common Stock any shares of capital stock of the Company, then the Conversion Rate shall be appropriately adjusted.
4). All of the outstanding shares of Series A Preferred Stock shall be automatically converted into the Conversion Shares upon the close of business on the business day immediately preceding the date fixed for consummation of any transaction resulting in a Change of Control of the Company (an “Automatic Conversion Event”).

 

 

 

5). Company’s Series A Preferred Stock shall have no voting rights.
6). The Effective Date of this Amendment shall be December 30, 2010.
The parties shall amend its Certificate of Designation to incorporate the terms of the Preferred Stock, which such amendment shall be filed with the Secretary of State.
This Amendment and the transactions contemplated hereby, and all disputes between the parties under or related to this side letter or the facts and circumstances leading to its execution, whether in contract, tort or otherwise, shall be governed by and construed in accordance with the internal laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date set forth above.
             
THE COMPANY:    
 
           
DOLPHIN DIGITAL MEDIA, INC.    
 
           
By:   /s/ William O’Dowd    
         
 
  Name:   William O’Dowd    
 
  Title:   CEO    
 
           
INVESTOR:    
 
           
T Squared Investments LLC    
 
           
By: T Squared Capital LLC, Managing Member    
 
           
By:   /s/ Thomas Sauve    
         
    Thomas Sauve, Managing Member    

 

 

Exhibit 99.1
Dolphin Digital Media Announces Debt to Equity Conversion
Agreement
MIAMI, January 5, 2011 (GLOBE NEWSWIRE) — Dolphin Digital Media, Inc. (OTCBB: DPDM) (“Dolphin Digital Media” or the “Company”) ( http://www.dolphindigitalmedia.com ), a creator of secure social networking websites for children utilizing groundbreaking fingerprint identification technology, is pleased to announce that it has entered into an agreement for a debt to equity conversion of a promissory note and its accrued coupon owed to T Squared Capital LLC (“T Squared Partners”), a private investment firm. Under the terms of the agreement, effective December 30, 2010, the Company will convert $500,000 of convertible notes and accrued interest into Series A Preferred Stock at a conversion price of $0.25 per share. The conversion price represents a 178% premium over Dolphin’s closing stock price of $0.09 on December 29, 2010.
“We are very pleased that T Squared Partners have chosen to further support Dolphin Digital Media through their conversion of debt to equity ownership, which substantially strengthens our balance sheet,” said Bill O’Dowd, Chief Executive Officer of Dolphin Digital Media. “Given the recent progress and expansion of our business model, coupled with the support from our investors and shareholders, we are excited about 2011.”
“We are very impressed with the progress made by Dolphin Digital Media over the past several months,” stated Mark Jensen, Co-Founder and Portfolio Manager of T Squared Partners. “The need for Internet security for children worldwide is greater than ever as parents are continually faced with the challenges of protecting their children against cyber-bullying and online predators. We believe that Dolphin’s products not only provide online safety and security for the children of the world, but also enable them to experience high-quality entertainment and educational content via Dolphin Digital Studios and the Company’s Dolphin Surf social network. We look forward to following the continued success of the Dolphin Digital Media team as they continue to roll out their exciting suite of products.”
ABOUT T SQUARED CAPITAL LLC
T Squared Partners is a fundamentally oriented private investment firm focusing on high-growth micro-cap public and private companies. The fund’s philosophy is to work with companies to enhance their shareholder value through friendly investment structures in addition to providing industry-leading strategic advice. T Squared Partners provides its companies with capital for the following objectives: expansion capital, working capital, acquisition capital and restructuring capital.

 

 

 

ABOUT DOLPHIN DIGITAL MEDIA, INC.
Dolphin Digital Media, Inc. is dedicated to the twin causes of online safety for children and the production of high-quality digital content. By creating and managing child-friendly social networking websites utilizing state-of the-art fingerprint identification technology, Dolphin Digital Media has taken an industry-leading position with respect to Internet safety. Also, with the launch of Dolphin Digital Studios, the Company is at the forefront of the growing digital entertainment sector. Please visit http://www.dolphindigitalmedia.com for more information.
SAFE HARBOR STATEMENT
This press release may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to anticipated revenues, expenses, earnings, operating cash flows, the outlook for markets and the demand for products. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially from the forward-looking statements. Such statements are based upon, among other things, assumptions made by, and information currently available to, management, including management’s own knowledge and assessment of the Company’s industry and competition. The Company refers interested persons to its most recent Annual Report on Form 10-KSB and its other SEC filings for a description of additional uncertainties and factors, which may affect forward-looking statements. The Company assumes no duty to update its forward-looking statements.
Contact:
Dolphin Digital Media, Inc.
Amanda Magid
(305) 774-0407
amanda@dolphindigitalmedia.com
Investor Relations:
RedChip Companies, Inc.
Jon Cunningham
(407) 644-0758, Ext. 107
jon@redchip.com
http://www.RedChip.com
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Sources: Dolphin Digital Media, Inc.