SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT
Date of report (Date of earliest event reported): November, 2001
DIGITAL CREATIVE DEVELOPMENT CORPORATION
(Exact Name of Registrant as Specified in Charter)
Utah 0-22315 34-1413104
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1325 Avenue of the Americas, 26th Fl, New York, New York 10019
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 603-7557
Item 2.01. Acquisition of Assets
The Company signed a bridge financing on September 10, 2003 for an investment in
Access Propeller, LLC ("Access"). Access owns 81% of Downplay, Inc. (formerly
Jippii USA, Inc.), a leading provider of downloadable entertainment for mobile
phones. The terms of the bridge financing give the Company the right to convert
and invest additional capital for an ownership stake of 51%.
Item 5.02. Liquidity and Capital Resources
The Company has needed to raise capital from time to time for various
obligations since its previous filing. In November 2001, the Company sold
6,750,000 of its common shares at $.04/share for net proceeds of approximately
$270,000.
In January 2003, the Company borrowed the sum of $300,000 from its former
chairman, Bruce Galloway. The term of the loan was for three months with a 12%
interest rate. In addition, Mr. Galloway received 1,000,000 warrants with an
exercise price of $.01/share and the lender, AFC Enterprises, Inc., received a
warrant to purchase 1,000,000 shares of common stock at $.01/share. The loan was
repaid in April 2003. Mr. Galloway and AFC Enterprises exercised their
respective warrants. Such proceeds of the warrant exercise was used for general
working capital purposes of the company.
In April to June 2003 the Company raised $345,000, in the form of secured
promissory notes from a group of investors. The terms of the notes provide for a
maturity date of 16 months from the date of issue with an interest rate of 10%.
In addition, each $60,000 unit was issued a warrant to purchase 1,000,000 shares
of stock at an exercise price of $.01/share. The security is 2,053,571 shares of
IMSI stock currently held by the Company. The proceeds of this offering were
used to repay the loan to Mr. Galloway and for the company's working capital
requirements. In addition, all of the noteholders have exercised the warrants
associated with their notes. Total warrants representing 5,750,000 shares were
exercised at a price of $.01/share. The number of shares of IMSI Common Stock
pledged as Collateral shall be subject to adjustment one year after the initial
closing date based on the 30-day trailing average of the bid prices of shares of
Common Stock of IMSI as listed on the OTC Bulletin Board or such other exchange
as such shares are then listed upon. As such, the number of shares that are
subject to the pledge agreement as of June, 2004 are 747,869 shares As of
September 30, 2004, several of the Notes in the aggregate principal amount of
$300,000 became due and are in default. The Company is attempting to negotiate
an extension of the maturity dates with respect to all of the promissory notes.
The Company's management is confident that such extensions can be obtained, but
there can be no assurances that this will occur.
On September 18, 2003, we entered into a 15% one-year note with IMSI whereby we
borrowed $350,000. The note is due, with interest, on September 18, 2004. The
note is secured by 400,000 shares of IMSI stock currently owned by DCDC.
Concurrent with this note, DCDC repaid the entire principal portion of a $50,000
note, made in favor of IMSI on February 25, 2003. That note, due on February 25,
2004 was unsecured and carried a 4% interest rate. The interest payable,
amounting to $1,712, was paid to IMSI on June 29, 2004.
On September 10, 2003 the company extended a bridge loan to Access Propeller,
LLC ("Access") in the sum of $300,000. This loan is secured against all the
assets of Access. Access owns 81% of Jippii (USA), n/k/a as DownPlay, Inc.
DownPlay is in the business of providing downloadable mobile entertainment to
cell phones and wireless devices. The loan bears interest at 10% and matures on
February 4, 2004. In addition, the loan allows the company the option to make a
further investment of $900,000 in the form of preferred stock to acquire a total
of 50.1% of Access. On October 31, 2003 the Company converted its loan to
304,250 shares of Preferred Series A stock. In December 2003, the company
decided not to make a further investment in Access or its subsidiary, DownPlay.
As of the date of this filing, the ownership stake in Access is approximately
12%.
On September 18, 2004, the Company and IMSI entered into an amendment to the
Note. The Amendment provides for the extension of the maturity date to May 31,
2005 as well as the payment of accrued interest by October 31, 2004 in the sum
of $52,000. In addition, the Company provided to IMSI as additional collateral,
its ownership stake in Access Propeller, LLC.
On September 30, 2004, the Company sold 200,000 shares of IMSI for gross
proceeds of $200,000. The Company used $77,500 of this amount to pay certain
indebtedness owed IMSI in the form of accrual interest and a portion of
principal.
Item 9.01. Financial Statements and Exhibits
9.1 Secured Promissory Note between the Company and International Microcomputer
Software, Inc. dated as of September 23, 2003.
9.2 Secured Promissory Note between the Company and Access Propeller dated as of
September 10, 2003.
9.3 Amendment #1 to 15% Promissory Note
9.4 Assignment Separate from Certificate
9.5 Assignment Separate from Certificate
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf by the undersigned
hereunto duly authorized.
September 23, 2004 DIGITAL CREATIVE DEVELOPMENT CORPORATION
By: /s/ Gary Herman, CEO
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Gary Herman, CEO