SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) AUGUST 31, 1999
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BIG ENTERTAINMENT, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 0-22908 65-0385686
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
2255 GLADES ROAD, SUITE 237 WEST, BOCA RATON, FLORIDA 33431
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (561) 998-8000
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 31, 1999, Big Entertainment, Inc., a Florida corporation (the
"Company"), acquired substantially all of the assets (the "Baseline Assets") of
Baseline II, Inc., a Delaware corporation ("Baseline II"), pursuant to the terms
of the Asset Purchase Agreement dated as of August 30, 1999 (the "Asset Purchase
Agreement") by and among the Company, Baseline II, Paul Kagan Associates, Inc.
(the majority shareholder of Baseline II), Cinema Enterprises Group LLC and Paul
Kagan. At the closing of the acquisition, the Company directed Baseline II to
transfer the Baseline Assets, on the Company's behalf, to its wholly owned
subsidiary, Baseline, Inc., a Delaware corporation. Baseline II owned and
operated the website pkbaseline.com, a comprehensive database of movie
information, which subscribers access by paying a fee for each piece of data
that is downloaded. The website includes film credits, information on film
projects in production, new movie releases, box office data, film synopses,
biographies of entertainment celebrities, and film reviews. The data includes
comprehensive information on over 67,000 films in the last half century.
Baseline data continuously tracks production, distribution, and exhibition of
feature films worldwide, including box office projections, budgets, and trends.
The Baseline Assets constitute substantially all of the assets used by Baseline
II in conducting its business and include tangible and intangible property such
as contracts, certain fixed assets, customer lists and certain intellectual
property. The Company plans to continue to operate the Baseline business and
integrate portions of the movie content from pkbaseline.com into the Company's
website, Hollywood.com.
The Company also acquired selected publications and an annual conference
dedicated to the movie industry from Paul Kagan Associates, Inc. Paul Kagan
Associates, Inc. will continue to operate and manage the publications and the
conference on the Company's behalf. The acquisition also included the equity of
Cinema Enterprises Group LLC, a company engaged in the development of a consumer
oriented movie website. This website included licensed movie content and movie
content integrated from pkbaseline.com. The Company intends to integrate
selected portions of the business of Cinema Enterprises Group LLC into its
Hollywood.com website. The assets acquired from Paul Kagan Associates, Inc., the
equity of Cinema Enterprises Group LLC and the Baseline Assets are collectively
referred to as the "Assets."
The aggregate purchase price for the Assets consisted of 492,611 shares of the
Common Stock, par value $.01 per share ("Common Stock"), of the Company and
warrants to purchase an aggregate of 54,735 shares of Common Stock. The Common
Stock was valued at an agreed upon price of $18.27 per share. The exercise price
of the Common Stock to be purchased upon the exercise of the warrants is $18.27
per share. Ninety percent of the purchase price was paid to Baseline II, six
percent was paid to Paul Kagan Associates, Inc. and four percent was paid to
Paul Kagan in respect of the equity of Cinema Enterprises Group LLC.
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By agreement of the parties, none of the shares of Common Stock issued in the
acquisition or purchasable upon exercise of the Warrants may be sold or
otherwise disposed of by the sellers until August 31, 2001.
The purchase price for the Assets was determined by arms-length negotiations
among the Company and Baseline II, Paul Kagan Associates, Inc. and Paul Kagan.
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
Baseline II, Paul Kagan Associates, Inc., Cinema Enterprises Group LLC or Paul
Kagan, on the other hand. Simultaneously with the closing of the purchase of the
Assets, Paul Kagan purchased 163,185 shares of Common Stock for an aggregate
purchase price of $2.5 million in cash. The purchase price for such shares was
based on the market price of the Common Stock at the time that the terms of the
purchase of such shares was agreed to.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
1. Asset Purchase Agreement, dated as of August 30, 1999, by
and among Big Entertainment, Inc., Baseline II, Inc., Paul
Kagan Associates, Inc., Cinema Enterprises Group LLC and
Paul Kagan.
2. Non-Competition Agreement, dated as of August 31, 1999, by
and among Big Entertainment, Inc., Baseline II, Inc., Paul
Kagan Associates, Inc. and Paul Kagan.
3. Warrant dated August 31, 1999 by Big Entertainment, Inc.
issued in the name of Baseline II, Inc. (with similar
Warrants to purchase 3,284 and 2,189 shares of Common Stock
issued in the name of Paul Kagan Associates, Inc.
and Paul Kagan, respectively).
4. Press Release, dated September 3, 1999.
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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/ W. Robert Shearer
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W. Robert Shearer
Senior Vice President
And General Counsel
Date: September 15, 1999
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EXHIBIT INDEX
Exhibit Number Description
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2.1 Asset Purchase Agreement, dated as of August 30,
1999, by and among Big Entertainment, Inc., Baseline
II, Inc., Paul Kagan Associates, Inc., Cinema
Enterprises Group LLC and Paul Kagan.
10.1 Non-Competition Agreement, dated as of August 31,
1999, by and among Big Entertainment, Inc., Baseline
II, Inc., Paul Kagan Associates, Inc. and Paul Kagan.
10.2 Warrant dated August 31, 1999 by Big Entertainment,
Inc. issued in the name of Baseline II, Inc. (with
similar Warrants to purchase 3,284 and 2,189 shares
of Common Stock issued in the name of Paul Kagan
Associates, Inc. and Paul Kagan, respectively).
99.1 Press Release, dated September 3, 1999.