SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2011

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

24. SUBSEQUENT EVENTS

        Subsequent events have been evaluated through the date on which the consolidated financial statements have been issued. The following subsequent events occurred:

Announcement of Production Cancellation of "Paradise Lost" by Legendary Pictures

        On February 9, 2012, Legendary Pictures announced production cancellation of Paradise Lost. Originally scheduled to begin production in Australia in January 2012, the film had previously been postponed to Spring/Summer 2012 in December 2011. At December 31, 2011, DD expensed $4.8 million in development costs incurred to date.

Equity Investment—Ender's Game

        On February 15, 2012, the Company modified its agreement with OddLot Entertainment to co-finance the VFX action movie Ender's Game by increasing the Company's commitment to the project to $17.2 million. Additionally, DD received a $27 million production services contract for a provision of VFX services to the film.

Port St. Lucie, Florida Cash Grant

        On February 13, 2012, the City of Port St Lucie under the terms of the City of Port St Lucie Grant Agreement made its third payment to the Company of $2.3 million.

Appointment of New Chief Financial Officer

        Effective February 22, 2012, Jonathan Teaford, our former Chief Financial Officer, was appointed as the Chief Executive Officer of our education subsidiary, Digital Domain Institute, Inc. On that same day John Nichols replaced Mr. Teaford as our Chief Financial Officer.

Award of Non Anti-Dilutive Stock Options

        The Company awarded 300,000 options to our Chief Financial Officer and 200,000 options to Chief Creative Officer.

Comvest Waiver and Amendment No. 1 to Credit Agreement and
Comvest Waiver and Amendment No.2 to Second Amended and Restated Loan Agreement

        On February 23, 2012, the Company entered into a waiver and loan modification agreement with Comvest. See Note 16.