-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AN9++Mnfpww6uMsyAmvJ/w2LvoNYc4dOqeOcBwSX/T/oPhR+bkpCbJa7sCTES6ZD qEgClY5cGkwxJEaTrH59Xw== 0000909518-99-000366.txt : 19990625 0000909518-99-000366.hdr.sgml : 19990625 ACCESSION NUMBER: 0000909518-99-000366 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990518 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIG ENTERTAINMENT INC CENTRAL INDEX KEY: 0000912544 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RETAIL STORES, NEC [5990] IRS NUMBER: 650385686 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14332 FILM NUMBER: 99638681 BUSINESS ADDRESS: STREET 1: 2255 GLADES RD STREET 2: STE 237 W CITY: BOCA RATON STATE: FL ZIP: 33431 BUSINESS PHONE: 4079988000 MAIL ADDRESS: STREET 1: 2255 GLADES RD STREET 2: STE 237 W CITY: BOCA RATON STATE: FL ZIP: 33431 8-K 1 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) MAY 18, 1999 ------------------------------- BIG ENTERTAINMENT, INC. - -------------------------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) FLORIDA 0-22908 65-0385686 - ---------------------------- ------------------------ ------------- (STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER OF INCORPORATION) IDENTIFICATION NO.) 2255 GLADES ROAD, SUITE 237 WEST, BOCA RATON, FLORIDA 33431 - -------------------------------------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (561) 998-8000 ---------------------------- #456040 v8.rtf INFORMATION TO BE INCLUDED IN THE REPORT ITEM 2. ACQUISITION OR DISPOSITION OF CINEMASOURCE ASSETS. 1. ACQUISITION OF SUBSTANTIALLY ALL OF THE ASSETS OF CINEMASOURCE, INC. On May 18, 1999, Big Entertainment, Inc., a Florida corporation (the "Company"), acquired substantially all of the assets (the "CinemaSource Assets") of CinemaSource, Inc., a Connecticut corporation ("CinemaSource"), pursuant to the terms of the Asset Purchase Agreement dated as of March 29, 1999 (the "Asset Purchase Agreement") by and among the Company, CinemaSource, Brett West (the sole shareholder of CinemaSource) and Pamela West. At the closing of the acquisition, the Company directed CinemaSource to transfer the CinemaSource Assets, on the Company's behalf, to its indirect wholly owned subsidiary, Showtimes.com, Inc. CinemaSource was engaged in the business of compiling, reproducing and distributing movie showtimes and related movie information through electronic means and over the Internet. The CinemaSource Assets constitute substantially all of the assets used by CinemaSource in conducting such business and include tangible and intangible property such as contracts, certain fixed assets, customer lists and certain intellectual property. The Company presently intends to integrate the CinemaSource Assets and the business of Hollywood.com, Inc. acquired by merger on May 20, 1999 (which is described hereinbelow) into its existing operations, thereby creating a comprehensive movie Internet web site which (i) contains movie information, movie reviews, trailers and celebrity interviews, (ii) sells movie-related merchandise and (iii) delivers movie showtimes listings. The purchase price for the CinemaSource Assets consisted of (i) $6,500,000 in cash, plus (ii) 436,191 shares of common stock, $0.01 par value, of the Company (the "Common Stock"). Funding for the cash portion of the purchase price came from the proceeds of a private placement of approximately 570,000 shares of the Common Stock at a price per share of $21.25 and warrants exercisable for approximately 190,000 shares of the Common Stock at an exercise price per share of $21.25. The total proceeds of the private placement was approximately $12,000,000, before closing costs. The securities sold in the private placement were sold without registration under the Securities Act of 1933, as amended (the "1933 Act"), in reliance on an exemption from registration under Section 4(2) of the 1933 Act and Rule 506 of Regulation D thereunder. The purchase price for the CinemaSource Assets was determined by arms-length negotiations between CinemaSource and the Company. Prior to entering into the Asset Purchase Agreement, there were no material relationships between the Company or any of its affiliates, directors or officers, or any associates of such directors and officers on one hand, and CinemaSource, on the other hand. 2 2. ACQUISITION OF THE CAPITAL STOCK OF HOLLYWOOD.COM, INC. On May 20, 1999, the Company acquired all of the capital stock of Hollywood.com, Inc., a California corporation ("Hollywood.com"), from The Times Mirror Company ("Times Mirror") pursuant to the merger (the "Merger") of Hollywood.com into Big Acquisition Corp., a wholly owned subsidiary of the Company prior to the Merger ("Merger Sub"). The Merger occurred in accordance with the Agreement and Plan of Merger dated as of January 10, 1999 (the "Merger Agreement") by and among the Company, Times Mirror, Hollywood.com (formerly Hollywood Online, Inc.) and Merger Sub. Hollywood.com owns and operates the HOLLYWOOD.COM web site, offering viewers movie information, movie trailers, movie soundtracks, photos and exclusive interactive games, current movie, laserdisc and movie soundtrack information, local movie theaters' showtimes, daily Hollywood news, celebrity interviews, listings of movies on TV, a searchable database with over 130,000 movies and 850,000 cast and crew credits, movie reviews, box office charts, interactive forums, a weekly e-mail dispatch and coverage of premieres, film festivals and movie-related events. The Company presently intends to integrate this business and the CinemaSource Assets into its existing operations, thereby creating a comprehensive movie Internet website which (i) contains movie information, movie reviews, trailers and celebrity interviews, (ii) sells movie-related merchandise and (iii) delivers movie showtimes listings. The aggregate consideration paid to Times Mirror by the Company in the Merger consisted of (i) 2,300,075 shares of the Common Stock, plus (ii) $1,928,137.64 by delivery of a promissory note of the Company payable to Times Mirror. The promissory note has a maturity date of May 20, 2000 (at which time the aggregate principal balance thereof must be repaid in full) and bears interest at the prime rate in effect from time to time of Citibank, N.A. plus 1%. Accrued but unpaid interest on the then unpaid principal balance of the note is payable on June 30, 1999, September 30, 1999, December 31, 1999, March 31, 2000 and on the maturity date. The promissory note may be prepaid in whole or in part at any time without payment of any premiums or penalty. The consideration paid to Times Mirror in the Merger was determined by arms-length negotiations between Times Mirror and the Company. Other than an agreement between the Company and Hollywood.com pursuant to which the Hollywood.com website was linked to the bige.com website, prior to entering into the Merger Agreement, there were no material relationships between the Company or its affiliates, directors or officers, or any associates of such directors or officers, on one hand, and Hollywood.com and/or Times Mirror, on the other hand. 3 3. PRESS RELEASE REGARDING THE ACQUISITIONS On May 20, 1999, the Company issued a press release regarding the foregoing acquisitions, a copy of which is attached as Exhibit 99 hereto and is hereby incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of Businesses Acquired. The financial statements required by this item 7(a) are not included in this report on Form 8-K. Pursuant to paragraph (4) of this Item 7(a), the Company will file the financial statements required by this Item 7(a) not later than 60 days after the date hereof. (b) Pro Forma Financial Information. The Pro Forma Financial Information required by this item 7(b) are not included in this report on Form 8-K. Pursuant to paragraph (2) of this Item 7 the Company will file the Pro Forma Financial Information required by Item 7(b) not later than 60 days after the date hereof. (c) Exhibits. 1. Asset Purchase Agreement dated as of March 29, 1999 by and among Big Entertainment, Inc., CinemaSource, Inc., Brett West and Pamela West. 2. Agreement and Plan of Merger dated as of January 10, 1999 by and among The Times Mirror Company, Hollywood.com, Inc. (formerly Hollywood Online, Inc.), Big Entertainment, Inc. and Big Acquisition Corp., as amended by the Waiver and Consent; and Other Modifications dated as of May 14, 1999. 3. Press Release dated as of May 20, 1999. 4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BIG ENTERTAINMENT, INC. By /s/ Mitchell Rubenstein ------------------------------- Mitchell Rubenstein Chairman of the Board and Chief Executive Officer Date: June 1, 1999 5 EXHIBIT INDEX ------------- Exhibit Number Description -------------- ----------- 2.1 Asset Purchase Agreement dated as of March 29, 1999 by and among Big Entertainment, Inc., CinemaSource, Inc., Brett West and Pamela West (previously filed on March 17, 1999 with the Company's Annual Report on Form 10-KSB as Exhibit 10.33 thereto). 2.2 Agreement and Plan of Merger dated as of January 10, 1999, as amended May 14, 1999, by and among The Times Mirror Company, Hollywood.com, Inc. (formerly Hollywood Online, Inc.), Big Entertainment, Inc. and Big Acquisition Corp. (previously filed on January 19, 1999 with the Company's Current Report on Form 8-K dated such date as Exhibit 2.1 thereto), as amended by the Waiver and Consent: and Other Modifications dated as of May 14, 1999 (filed herewith). 99 Press Release dated as of May 20, 1999. 6 EX-2 2 Exhibit 2.2 May 14, 1999 To: Mitchell Rubenstein Big Entertainment, Inc. 2255 Glades Road Boca Raton, Florida 33431 Re: Waiver and Consent; and Other Modifications Dear Mitch: We have discussed making certain changes and/or clarifications to the Agreement and Plan of Merger (the "Merger Agreement") dated as of January 10, 1999, by and among The Times Mirror Company ("Times Mirror"), a Delaware corporation, hollywood.com, Inc., formerly Hollywood Online Inc. ("HOL"), a California corporation, Big Entertainment, Inc. ("Big"), a Florida corporation and Big Acquisition Corp., a Delaware corporation and to the related Shareholder Agreement (the "Shareholder Agreement") dated as of January 10, 1999 by and between Big and Times Mirror. In this regard, we acknowledge and agree to the following: 1. Section 1.8(a)(i)(4) of the Merger Agreement is hereby amended by adding the following to the end of such section: "Alternatively, if the aggregate Parent Common Stock Price of the excess shares of the Common Stock Merger Consideration calculated as provided pursuant to this Section 1.8(a)(i)(4) would be more than $1,000,000.00 but equal to or less than $4,000,000.00, then, at the option of Parent, the Shares shall, by virtue of the Merger and without any action on the part of Sub, HOL or the holder thereof, be converted into and shall become the sum of a number of fully paid and nonassessable shares of Parent Common Stock equal to 19.9% of the issued and outstanding common stock of Parent or the voting power of Parent immediately prior to the Effective Time plus an amount in cash equal to the product of (x) the number of excess shares multiplied by (y) the Parent Common Stock Price; provided, however, that Parent may exercise this option only if the Closing occurs on or prior to June 30, 1999, unless Times Mirror notifies Parent in writing on or prior to such date that it wishes to extend such date for an additional 15-day period in connection with Times Mirror's satisfaction of any obligations with respect to any of the performance cycle bonuses as set forth in Section 10.3(b). In addition, in lieu of such cash payment, Parent may issue to Times Mirror an unsecured promissory note in the aggregate principal amount thereof at the Closing. Such promissory note shall be substantially in the form of Exhibit AA, attached to this Amendment." 2. Pursuant to Sections 6.1(a) and (b) of the Merger Agreement, HOL was obligated to, and Times Mirror was obligated to cause HOL to, deliver Audited Financial Statements and Work Papers (each as defined in the Agreement) to Big on or before January 31, 1999. HOL and Times Mirror seek to obtain a waiver of HOL's failure to, and Times Mirror's failure to cause HOL to, deliver Audited Financial Statements and Work Papers to Big on or before January 31, 1999 as required by Sections 6.1(a) and (b) of the Merger Agreement. HOL shall, and Times Mirror shall cause HOL to, deliver Audited Financial Statements and Work Papers to Big on or before April 30, 1999, and Big acknowledges and consents that the failure of HOL to, and the failure of Times Mirror to cause HOL to, deliver Audited Financial Statements and Work Papers on or before January 31, 1999 shall not constitute a breach of or a default under the Merger Agreement by Times Mirror or HOL. 3. Pursuant to Section 6.1(a) of the Merger Agreement, HOL was obligated to cause HOL to deliver an officer's certificate by its chief financial officer along with the Audited Financial Statements. Big and Times Mirror agree that such officer certificate may be executed by either HOL's chief executive officer or its chief financial officer. 4. Clause (ii) of Section 9.1(c) of the Merger Agreement shall be deleted in its entirety and substituted with the following clause: "(ii) the Merger has not been consummated by August 15, 1999, provided, however, if the Merger has not been consummated by such date by reason of a pending review by the SEC, then in such event the August 15th date may be extended at Big's option until October 15, 1999; and" 5. The reference in the first sentence of Section 10.3(b) of the Merger Agreement to "Bruce R. Cameron, Anthony T. Farwell, Stuart J. Halperin and Steven B. Katinsky pursuant to the employment agreements set forth" shall be amended to read, "those individuals having agreements as identified by numbers 2, 3, 4, 5, 6, 7, 10 and 11;" the reference in the second sentence of such section to "If any of such person" in Section 10.3(b) of the Merger Agreement shall be amended to read, "If any of the individuals having agreements identified by numbers 2, 4, 6 and 7 on Schedule 3.12(a)"; and the phrase at the end of the second sentence of such section "or like provision of each of the employment agreements set forth on Schedule 3.12(a)" shall be amended to read, "or like provision of each of the Employment Agreements". In addition, Schedule 3.12(a) is hereby amended to delete items 8 and 9 therefrom. 6. Each of the references to "the date of this Agreement" in Sections 3.1(i) and 6.1 of the Shareholder Agreement shall be amended to read "the Closing Date of the Merger (as such terms are defined in the Merger Agreement)". 2 7. Section 8.6 of the Merger Agreement is hereby amended by adding the phrase "Subject to Section 5.13(c)," to the beginning of such section and by changing the capital letter "E" in the word "each" at the beginning of such section to a lower case "E." 8. Subsection 10.3(b) of the Merger Agreement is hereby amended by adding the following language at the end of the penultimate sentence of such subsection: "; provided, however, before Times Mirror is obligated to advance any such payment for the performance cycle bonuses, Parent shall deliver to Times Mirror a notice of its intent to pay such performance cycle bonuses, which notice shall set forth in sufficient detail: (i) the Performance Cycle Amount (as defined in Section 5.2(d)(i) of the Employment Agreements), (ii) HOL's Gross Revenue, Adjusted Operating Income and Adjusted Revenue (as each such term is defined in Section 5.2(ii) of each of the Employment Agreements), together with all appropriate supporting accounting information, (iii) the Market Value (as determined in accordance with Section 5.2(e) of each of the Employment Agreements) of HOL along with all relevant supporting information, and (iv) the amount of each individual Performance Cycle Bonus (as defined in Section 5.2(a)(i) of each of the Employment Agreements), together with all supporting calculations; all of which information Times Mirror shall be entitled to review and approve within 10 business days of the date such notice is deemed to be effective. During any such 10-day approval period, Times Mirror shall be entitled to request and receive any additional supporting documentation and accounting information as it may reasonably require to verify such information and calculations. If at any time during any such 10-day period Times Mirror disputes the Performance Cycle Amount or any individual Performance Cycle Bonus calculation, Times Mirror shall timely deliver to Parent written notice of any such dispute, the specific reason or reasons thereof, and neither Parent nor HOL shall distribute any performance cycle bonus payments until all such disputes, if any, are resolved in accordance with Section 10.3(c) below. If during any such 10-day period Times Mirror does not deliver to Parent a written notice of dispute, then the absence of any such notice shall be deemed as Times Mirror's acceptance and approval of the performance cycle bonuses for which notice was given." 9. Section 10.3 of the Merger Agreement is hereby amended by adding the following subsection (c) to the end of such section: "(c) Settlement of Performance Cycle Bonus Disputes. All disputes that may arise under this Section 10.3 with respect to the calculation and payment of any performance cycle bonuses shall be settled by mutual agreement of Times Mirror, Parent and HOL signed by all such parties. If the parties concerned cannot reach a mutual agreement within 20 days of 3 Parent's receipt of a notice of dispute, then this matter shall be resolved in accordance with Section 12.11 of the Merger Agreement." Except as provided in this letter, Big's consent and waiver hereunder shall not be construed to be a waiver of any other rights of Big, nor a waiver of any other breach or default of HOL or Times Mirror. Big hereby reserves all rights not specifically waived in this letter. Except as expressly modified by this letter, all other terms and provisions of the Merger Agreement shall remain in full force and effect and shall apply to this letter as if a part of the Merger Agreement. Thank you for your cooperation. Sincerely, /s/ Thomas Unterman Thomas Unterman THE TIMES MIRROR COMPANY /s/ Michael Rollens Michael Rollens HOLLYWOOD.COM, INC. Acknowledged, agreed to and accepted this 14th day of May, 1999. BIG ENTERTAINMENT, INC. /s/ Michell Rubenstein - ---------------------------------- Name: Michell Rubenstein Title: Chief Executive Officer 4 EX-99 3 Exhibit 99 For Immediate Release BIG ENTERTAINMENT CLOSES ON ACQUISITION OF HOLLYWOOD.COM BIG ENTERTAINMENT ALSO COMPLETES ACQUISITION OF CINEMASOURCE Boca Raton, FL, (May 20, 1999) -- Big Entertainment, Inc. (NASDAQ: BIGE) today announced that it completed its acquisition of hollywood.com, Inc., formerly Hollywood Online Inc., from The Times Mirror Company. Hollywood.com is a premier movie website that features movie reviews, movie trailers, celebrity chats, and bios on actors and directors, with over one million Web pages of movie content. Page impressions on Hollywood.com during March and April 1999 totaled over 46 million, with an average of more than 2.2 million unique monthly users. BigE today also announced that it completed the acquisition of the assets of CinemaSource, Inc., the nation's largest provider of movie showtimes listings to the Internet industry. CinemaSource provides movie showtimes to Yahoo!, Excite, MSN, Go Network, CitySearch, Zip2, and numerous other websites. BigE plans to combine its bige.com website, which is one of the Internet's largest e-commerce movie studio stores, and Hollywood.com, to form a movie content and movie merchandise Internet supersite, all under the Hollywood.com brand. "The combination of the Hollywood.com brand, bige.com's studio store and CinemaSource's movie listings will offer users a one-stop Internet supersite for movie content, showtimes, and movie merchandise," said Mitchell Rubenstein, Chairman and Chief Executive Officer of BigE. "Our acquisitions of Hollywood.com and CinemaSource are a major step in our plan to create the dominant Internet movie-related website," added Mr. Rubenstein. "In addition, our recently announced pending transaction with CBS will provide the national branding for our online movie supersite that should ensure our visibility to a wide range of viewers as the top destination for everything about movies." Thomas Unterman, Executive Vice President and Chief Financial Officer of Times Mirror, said, "We are enthusiastic about the prospects for the combined business, which will be the leader in its category on the web. We are very pleased with our new investment in BigE." Mr. Unterman will be joining the Board of Directors of BigE. BigE acquired hollywood.com, Inc. from Times Mirror for approximately 2.3 million common shares and a one-year note for approximately $1.9 million. The Times Mirror stake represents approximately 16.5% of BigE's outstanding common shares after giving effect to the acquisitions. BigE purchased CinemaSource's assets for $6.5 million in cash and approximately 435,000 of its common shares. Funding for the cash portion of the purchase price in the CinemaSource acquisition came from the proceeds of a private placement of approximately 570,000 BigE common shares at a price per share of $21.25, which raised approximately $12 million, before closing costs. Investors in the private placement also received warrants exerciseable for approximately 190,000 common shares at an exercise price of $21.25 per share. The remaining proceeds from the private placement will be used to pay transaction costs of the acquisitions and for working capital purposes. Wasserstein Perella Securities, Inc. acted as sole placement agent for the private placement. About Hollywood.com Hollywood.com (www.hollywood.com) is a premier website for movies. The award-winning website features one of the Web's largest collections of movie-related multimedia, including movie trailers, movie soundtracks, photos and exclusive interactive games. Hollywood.com also offers visitors current movie, laserdisc, and movie soundtrack information, as well as local movie theaters' showtimes, daily Hollywood news, celebrity interviews, listings of movies on TV, a searchable database with over 130,000 movies and 850,000 cast and crew credits, movie reviews, box office charts, and interactive forums. Hollywood.com also offers a weekly e-mail dispatch and coverage of premieres, film festivals and events. BIG ENTERTAINMENT CLOSES ON ACQUISITION OF HOLLYWOOD.COM BIG ENTERTAINMENT ALSO COMPLETES ACQUISITION OF CINEMASOURCE May 20, 1999 Page 2 of 2 About bige.com bige.com is an online movie studio store offering thousands of entertainment products from Hollywood studios and popular culture. bige.com sells merchandise based on movies and popular culture including items such as apparel, action figures, games, plush, collectibles and posters. bige.com is available on the Web at www.bige.com as well as on many popular websites, including www.usatoday.com, www.broadcast.com, Excite, IMDb, www.Film.com, and the AdvanceNet websites (www.nj.com, www.mlive.com, www.cleveland.com, www.oregonlive.com, www.rainorshine.com, www.mardigras.com, and www.yucky.com). About CinemaSource CinemaSource is the nation's largest distributor of movie showtimes to the Internet industry. The largest media companies (and many of the small ones too) rely on CinemaSource for their movie related informational needs. Its customers include Yahoo!, Excite, MSN, CitySearch, Zip2, The New York Times, Knight Ridder, AdvanceNet, and others. About Big Entertainment Big Entertainment, Inc. (NASDAQ:BIGE) was founded by Mitchell Rubenstein and Laurie S. Silvers, who earlier founded the Sci-Fi Channel(TM). Big Entertainment owns Hollywood.com, bige.com, and CinemaSource, a combination of movie-related Internet businesses that are being combined under the "Hollywood.com" brand. Big Entertainment also owns entertainment properties created for it by best-selling authors and media celebrities, including Leonard Nimoy and Mickey Spillane. CBS Corporation and BigE recently announced that they have signed an agreement in principle for CBS to receive an initial 35% ownership interest (with warrants to purchase an additional 5% ownership position) in Hollywood.com, bige.com and CinemaSource in exchange for $100 million of promotion and content support over a period of seven years. Big Entertainment will own 65% of the joint venture. Completion of the CBS joint venture is subject to finalizing transaction documents and customary closing conditions. Note: Page impressions and unique user information sources are I/Pro and Accrue, respectively. (The matters discussed herein that are forward-looking statements are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. Potential risks and uncertainties include, but are not limited to, the risks described in Big Entertainment's filings with the Securities and Exchange Commission.) Contacts For Big Entertainment: Mitchell Rubenstein Mark Cohen Phone: 561-998-8000 The Pinnacle Group (Investor Relations) Email: mitch@bige.com Phone: 516-773-2477 2 -----END PRIVACY-ENHANCED MESSAGE-----