Digital Domain Media Group, Inc. (“DDMG”) (OTCQB: DDMGQ) today announced that it has reached agreement with its Senior Noteholders to provide approximately $11.8 million of debtor-in-possession (DIP) financing as requested by motion submitted to the United States Bankruptcy Court for the District of Delaware (“Court”) and for the use of the Senior Noteholders’ cash collateral. In addition, the Company announced that Searchlight Capital Partners L.P. (“Searchlight”), who as previously announced has entered into a purchase agreement with DDMG to acquire Digital Domain Productions and its operating subsidiaries in the United States and Canada (“DDPI”), including Mothership Media (“Mothership”), has reasserted its aspiration to acquire the visual effects business of DDPI and Mothership. Searchlight’s agreement to acquire Digital Domain’s visual effects business is subject to higher and better offers and Court approval. The public auction date is currently set for September 21, 2012 in New York, New York. Ed Ulbrich, CEO of Digital Domain Productions, said, “I am grateful to our Senior Noteholders, our partners at Searchlight, and especially our clients, for staying with us through this complex transaction. I want to thank everyone on behalf of the 733 employees of Digital Domain and Mothership and their families. We continue to deliver high quality work to our clients throughout this process, and this financing lets us move forward uninterrupted.” “Our agreement demonstrates our support and belief in the visual effects business of Digital Domain, led by Ed Ulbrich and his team. The outcome yesterday in Court provides for a timely and orderly auction process and assures that the Company will be amply funded until the transaction closes. This will allow Digital Domain to continue serving all of its customers on all existing projects with no interruptions or delays. We have made a significant commitment to capitalize the business, which will allow Digital Domain to thrive as a leading visual effects company,” said Eric Zinterhofer, co-founder, Searchlight Capital Partners L.P.
“The Senior Noteholders are delighted to have Searchlight involved; a group with significant financial resources and industry knowledge,” said a representative of the Senior Noteholders.“Combined with our cash from ongoing operations, this funding supports DDMG in paying normal operating expenses, such as employee wages and benefits, payments to vendors and suppliers, and other obligations,” said Michael Katzenstein, Chief Restructuring Officer of DDMG. DDMG filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on September 11, 2011 and will seek ancillary relief in Canada, pursuant to the Companies’ Creditors Arrangement Act (CCAA) in the Supreme Court of British Columbia, Vancouver Registry. Additional information regarding DDMG’s Chapter 11 proceedings can be found at www.kccllc.net/DDMG or 866-927-7084. About Searchlight Capital Partners L.P. Searchlight Capital Partners, L.P. (“Searchlight Capital Partners”) is a private investment firm founded in 2010 by senior partners formerly with industry leading investment management firms. Searchlight Capital Partners currently manages over $860 million, invests in a wide range of industries in North America and Europe, and has offices in New York, London and Toronto. For more information, please visit www.searchlightcap.com. 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 13, 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.