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As filed with the Securities and Exchange Commission on June 11, 2012

Registration No. 333-            

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Digital Domain Media Group, Inc.
(Exact name of registrant as specified in its charter)

10250 SW Village Parkway
Port St. Lucie, Florida 34987
(772) 345-8000
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

John C. Textor
Digital Domain Media Group, Inc.
10250 SW Village Parkway
Port St. Lucie, Florida 34987
(772) 345-8000
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all communications to:

D. Thomas Triggs, Esq.
Brian A. Sullivan, Esq.
Owen M. Lewis, Esq.
Sullivan & Triggs, LLP
1230 Montana Avenue, Suite 201
Santa Monica, California 90403-5987
(310) 451-8300

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effectiveness of this Registration Statement.

           If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    ý

           If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

           If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

           If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the earlier offering.    o

           Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

CALCULATION OF REGISTRATION FEE

(1)

Pursuant to Rule 416(a), this registration statement also covers an indeterminate number of shares that shall become issuable to prevent dilution from stock splits, stock dividends, or similar transactions.

(2)

The shares will be offered for resale by selling shareholders pursuant to the shelf prospectus contained herein.

(3)

Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(c) under the Securities Act based on $7.28, the average of the high and low reported sales prices of the Registrant's shares of Common Stock, as reported on the New York Stock Exchange on June 8, 2012.

(4)

Consists of 2,445,004 shares of Common Stock, 525,001 additional shares of Common Stock issuable in connection with certain adjustment events provided for in securities purchase agreements, 9,830,777 shares of Common Stock issuable upon the conversion of outstanding senior convertible notes, 5,327,546 shares of Common Stock issuable upon the conversion of an outstanding subordinated note, 3,356,249 shares of Common Stock issuable upon the exercise of outstanding warrants to purchase shares of Common Stock, and 2,200,000 shares of Common Stock purchasable upon the exercise of call option agreements.

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           The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   

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The Information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, Dated June 11, 2012

23,684,577 Shares

Common Stock

        The selling shareholders listed in this prospectus in the section "Selling Shareholders" are offering:

•

2,445,004 shares of our Common Stock;



•

525,001 additional shares of our Common Stock issuable in connection with certain adjustment events provided for in securities purchase agreements entered into with certain of the selling shareholders;



•

9,830,777 shares of our Common Stock issuable upon the conversion of outstanding senior convertible notes;



•

5,327,546 shares of our Common Stock issuable upon the conversion of an outstanding subordinated note;



•

3,356,249 shares of our Common Stock issuable upon the exercise of outstanding warrants to purchase shares of our Common Stock; and



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2,200,000 shares of our Common Stock purchasable upon the exercise of call option agreements entered into between certain of the selling shareholders.

        This prospectus also covers any additional shares of our Common Stock that may become issuable upon any anti-dilution adjustment pursuant to the terms of the above-described notes and warrants by reason of stock splits, stock dividends, or similar events. Certain of the shares of our Common Stock issued to the selling shareholders, the senior secured notes, the subordinated note and the warrants to purchase shares of our Common Stock were acquired by certain of the selling shareholders in private placements by us that closed on May 7, 2012 and June 8, 2012.

        Digital Doman Media Group, Inc. is not selling any shares of our Common Stock pursuant to this prospectus and will not receive any of the proceeds from the sale of any such shares to be sold by the selling shareholders.

        Shares of our Common Stock are listed on the New York Stock Exchange ("NYSE") under the symbol "DDMG." On June 8, 2012, the last sale price of the shares of our Common Stock as reported on the NYSE was $6.90 per share.

        See "Risk Factors" beginning on page 20 in our Annual Report on Form 10-K for the year ended December 31, 2011 to read about factors you should consider before buying shares of our Common Stock.

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        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

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The date of this prospectus is                        , 2012

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About this Prospectus

        This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the "SEC") using a "shelf" registration process. Under this shelf process, the selling shareholders may, from time to time, sell in one or more offerings, the securities described in this prospectus.

        We may provide a prospectus supplement containing specific information about the terms of a particular offering by the selling shareholders. The prospectus supplement may add, update or change information in this prospectus. If the information in this prospectus is inconsistent with a prospectus supplement, you should rely on the information in that prospectus supplement. We urge you to read both this prospectus and, if applicable, any prospectus supplement together with additional information described under the headings "Where You Can Find More Information" and "Incorporation by Reference" included elsewhere in this prospectus.

        As used herein, "the "Company," "we," "our," and similar terms refer to Digital Domain Media Group, Inc., unless the context indicates otherwise.

        "Digital Domain" and other trademarks of ours appearing in this prospectus are our property. This prospectus contains additional trade names and trademarks of other companies. We do not intend our use or display of other companies' trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.

        You should not assume that the information contained in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front cover of such documents. Neither the delivery of this prospectus or any applicable prospectus supplement nor any distribution of securities pursuant to such documents creates any implication, under any circumstances, that there has been no change in the information set forth in this prospectus or any applicable prospectus supplement or in our affairs since the date of this prospectus or any applicable prospectus supplement.

Forward-Looking Statements

        This prospectus contains "forward-looking statements" that involve substantial risks and uncertainties. The statements contained in this prospectus that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including, but not limited to, statements regarding our expectations, beliefs, intentions, strategies, future operations, future financial position, future revenue, projected expenses and plans and objectives of management. In some cases, you can identify forward-looking statements by terms such as "anticipate," "believe," "estimate," "expect," "intend," "may," "might," "plan," "project," "will," "would," "should," "could," "can," "predict," "potential," "continue," "objective," or the negative of these terms, and similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements reflect our current views about future events and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievement to be materially different from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed or referred to in the sections titled "Risk Factors" included in this prospectus and in our Annual Report on Form 10-K for the year ended December 31, 2011. Furthermore, such forward-looking statements speak only as of the date of this prospectus. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. We qualify all of our forward-looking statements by these cautionary statements. In addition, the industries in which we operate are subject to a high degree of uncertainty and risk due to a variety of factors including those described or referred to in the section entitled "Risk Factors." These and other factors could cause our results to differ materially from those expressed in this prospectus.

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Incorporation By Reference

        The SEC allows us to incorporate by reference in this prospectus certain information we have filed with it, which means that we can disclose important information to you by referring you to those documents filed separately with the SEC. The information we incorporate by reference is an important part of this prospectus. We incorporate by reference the documents listed below, except to the extent that any information contained in those documents is deemed "furnished" in accordance with SEC rules. The documents we incorporate by reference, all of which we have previously filed with the SEC, include:

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our Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on March 30, 2012;



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our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed with the SEC on May 15, 2012;



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our Current Reports on Form 8-K filed with the SEC on



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January 17, 2012;



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February 21, 2012;



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April 5, 2012;



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May 8, 2012;



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May 23, 2012;



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June 8, 2012; and



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the description of our Common Stock contained in our Registration Statement on Form 8-A filed with the SEC on October 24, 2011, pursuant to Section 12 of the Exchange Act.

        Any statement contained in a document that is incorporated by reference will be modified or superseded for all purposes to the extent that a statement contained in a later document or in this prospectus modifies or is contrary to that previous statement. Any statement so modified or superseded will not be deemed a part of this prospectus except as so modified or superseded.

        You may request a copy of any of these incorporated documents at no cost, by contacting our Corporate Secretary at Digital Domain Media Group, Inc., 10250 SW Village Parkway, Port St. Lucie, Florida 34987. The Company's telephone number at that location is (772) 345-8000.

        These incorporated documents may also be available on our website at www.ddmg.co. Except for these incorporated documents, information on, or that can be accessible through, our website does not constitute a part of, and is not incorporated by reference in, this prospectus.

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Risk Factors

        An investment in our Common Stock involves certain risks. You should consider carefully the risks and uncertainties described in, or described in documents incorporated by reference in, this prospectus, including the risks described below and under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2011, along with the other information included or incorporated by reference in this prospectus, in evaluating an investment in our securities. For a description of these reports and documents, and information about where you can find them, see the sections entitled "Where You Can Find More Information" and "Incorporation by Reference" in this prospectus.

        The risks and uncertainties described in this prospectus and the documents incorporated by reference in this prospectus are not the only ones facing us. Additional risks and uncertainties that we do not presently know about or that we currently believe are not material may also adversely affect our business. If any of the risks and uncertainties described in this prospectus or the documents incorporated by reference herein actually occur, our business, financial condition and results of operations could be adversely affected in a material way. This could cause the value of the securities to decline, and you may lose part or all of your investment.

Use of Proceeds

        All shares of Common Stock sold pursuant to this prospectus will be sold by the selling shareholders and we will not receive any of the proceeds from such sales. However, we will receive approximately $17,079,996 if the May 2012 Warrants and the June 2012 Warrants held by certain of the selling shareholders are fully exercised for cash at the current respective exercise prices thereof, which are subject to adjustment. We cannot guarantee that such selling shareholders will exercise the May 2012 Warrants or the June 2012 Warrants. We expect to use the net proceeds from any exercise of the May 2012 Warrants or the June 2012 Warrants for general corporate purposes.

Selected Financial Data

        The following table sets forth certain of our historical selected financial information. Effective January 1, 2012, we adopted the Financial Accounting Standards Board's ("FASB") Accounting Standards Update ("ASU") No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, as amended by ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. These updates revise the manner in which entities present comprehensive income in their financial statements. The following selected financial information revises historical information to illustrate the new presentation required by this pronouncement for the periods presented.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, In thousands)

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Market Price and Dividend Policy

        Our shares of Common Stock are listed on the NYSE under the symbol "DDMG". Our shares of Common Stock have only been publicly traded since November 18, 2011, when our shares of Common Stock were listed and began trading on the NYSE.

        The following table sets forth the high and low sales price per share of shares of our Common Stock, as reported by the NYSE, from commencement of trading on November 18, 2011. As of June 8, 2012, there were approximately 57 shareholders of record of shares of our Common Stock. The number of beneficial owners of shares of our Common Stock is substantially greater than the number of shareholders of record because a large portion of our Common Stock is held in the names of nominees through brokerage firms.

        We have never declared or paid any cash dividends on our Common Stock. We currently expect to retain future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying any cash dividends on such stock in the foreseeable future.

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Capitalization

        The following table sets forth our capitalization (in thousands) as of March 31, 2012:

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on an actual basis;



•

on a pro forma basis to reflect the following:



(1)

Adjustments of deferred debt issue costs, short and long-term debt and short and long-term warrant liabilities to actual as of May 7, 2012. These adjustments include $0.3 million of amortization of deferred debt issue costs, amortization of debt discounts and capitalized interest of $0.5 million and a $5.2 million increase in long-term warrant liabilities. The net increase in the accumulated deficit from these adjustments was $6.0 million.



(2)

On May 6, 2012, we entered into the May 2012 Purchase Agreement with the May 2012 Purchasers, pursuant to which we issued and sold to the May 2012 Purchasers the Senior Notes and the May 2012 Warrants at an aggregate purchase price of $35.0 million. The Senior Notes were initially convertible into 4,495,095 shares of our Common Stock. The initial exercise price of the May 2012 Warrants was $9.72 per share, subject to adjustment as provided in the May 2012 Warrants. Such issuance and sale were consummated on May 7, 2012. The indebtedness evidenced by the Senior Notes bear interest at 9.0% per annum, compounded quarterly, payable quarterly in arrears, and matures on the fifth anniversary of the issuance date.


We paid $3.0 million in placement fees and other expenses in connection with the above-described transaction, which were recognized as deferred debt issue costs. The fair value of the May 2012 Warrants and the fair value of the shares of our Common Stock that the Senior Notes were convertible into at time of issuance aggregated $25.1 million. These warrant liabilities were recognized as debt discounts to the Senior Notes. Of the total Senior Notes of $35.0 million, we recognized $3.2 million as a short-term debt liability and the remainder as long-term debt liability as of the date of the Senior Notes transaction.

(3)

On May 6, 2012, concurrently with the execution and delivery of the May 2012 Purchase Agreement, we entered into the Omnibus Agreement with the Existing Senior Lender, pursuant to which, among other things, we agreed to (i) use a portion of the proceeds we received in connection with the financing transaction described above to make payments to the Existing Senior Lender with respect to the outstanding loans to us held by such Existing Senior Lender, such that the aggregate outstanding principal balance thereof was reduced to $8.0 million, and (ii) repurchase all but 145,000 shares of our Common Stock received by the Existing Senior Lender upon full exercise of an outstanding warrant to purchase shares of our Common Stock held by such Existing Senior Lender.


In connection with the Omnibus Agreement, we entered into the Debt Exchange Agreement, pursuant to which, among other things, we exchanged the remaining original outstanding principal balance under our outstanding loans held by the Existing Senior Lender for the Subordinated Note with an original principal amount of $8.0 million, which Subordinated Note, inclusive of any and all accrued interest on the Subordinated Note and other fees, costs and amounts owing thereunder, is convertible into shares of our Common Stock, in accordance with the terms thereof. The debt exchange transaction was consummated on May 7, 2012. The indebtedness evidenced by the Subordinated Note bears interest at 10.0% per annum, compounded quarterly, payable quarterly in arrears, and matures on June 30, 2016.

As a result of the Debt Exchange Agreement, we retired $3.2 million of existing short-term debt and $24.6 million of existing long-term debt and recognized new long-term debt of

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$8.0 million, for a net decrease in cash of $19.8 million from these transactions. At the same time, we wrote off unamortized deferred debt issue costs of $1.9 million, unamortized debt discounts of $6.0 million, a redeemable feature asset classified in long-term warrant liabilities of $8.8 million, and a protective put long-term warrant liability of $5.3 million, for a net loss on debt extinguishment of $11.4 million, which increased the accumulated deficit.

(4)

The Existing Senior Lender exercised its existing fee warrants that had a fair value of $3.8 million as of the date of the debt exchange and financing transactions described above. We issued 435,331 shares of our Common Stock to the Existing Senior Lender upon this exercise, and we recorded common stock and additional paid-in capital for an aggregate of $3.8 million. The exercise price was reflected as an increase in treasury stock of $4 thousand due to a cashless exercise of 492 shares of our Common Stock. We repurchased from the Existing Senior Lender an additional 289,839 of shares of our Common Stock for $2.5 million in cash, which was recorded as an increase in treasury stock.



(5)

The number of shares that the Existing Senior Lender's convertible debt was convertible into as of the date of the transactions described above was increased from 3.0 million to 3.2 million, which resulted in an increase in the fair value of warrant liabilities of $2.1 million, which was recognized as an additional debt discount on the Subordinated Note.



(6)

On June 7, 2012, we entered into the June 2012 Purchase Agreement with the June 2012 Purchasers, pursuant to which we issued to such June 2012 Purchasers an aggregate of 1,500,004 shares of our Common Stock at a price of $7.00 per share, for gross proceeds of $10.5 million. We paid $0.9 million of offering expenses related to this transaction. We also issued the June 2012 Warrants, exercisable into an aggregate of 600,000 shares of our Common Stock, to the June 2012 Purchasers, which expire in five years after the initial exercisability date of the June 2012 Warrants, which is six months after their issuance date. We recognized the fair value of the June 2012 Warrants of $1.8 million as long-term warrant liabilities. The net increase to stockholders' equity from the June 2012 Offering was $7.7 million.



(7)

The June 2012 Offering caused a price reset of the May 2012 Warrants and the Senior Notes. The exercise price of the May 2012 Warrants and the conversion price of the Senior Notes was reset from $9.72 per share to $6.00 per share. The number of shares of our Common Stock underlying the May 2012 Warrants increased accordingly by 781,384, and the number of shares that the Senior Notes are convertible into increased by 2,786,962 as a result of the June 2012 Offering. These increases in shares of Common Stock underlying the May 2012 Warrants increased the fair value of the May 2012 Warrants by $11.1 million, which was recognized as an increase in long-term warrant liabilities and an increase in accumulated deficit.



(8)

The net increase in cash and cash equivalents from the transactions described above was $19.3 million.

        The pro forma adjustments in the table below required our management to make estimates and assumptions. The most significant area that required our management's judgment was the calculation of the fair values of warrant liabilities. Actual results could differ from these estimates.

        This table should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements, including the

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accompanying notes thereto, incorporated by reference herein from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.

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Security Ownership of Certain Beneficial Owners and Management

        The following table sets forth information about beneficial ownership of our Common Stock as of June 8, 2012 (unless otherwise noted) by (i) each shareholder that has indicated in public filings that the shareholder beneficially owns more than five percent of our Common Stock, (ii) each of our directors and named executive officers and (iii) all directors and executive officers as a group. Except as otherwise noted, each person listed below, either alone or together with members of the person's family sharing the same household, had, to our knowledge, sole voting and investment power with respect to the shares listed next to the person's name.

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Selling Shareholders

        The shares of Common Stock being offered by the selling shareholders include certain such shares previously issued to the selling shareholders and those issuable to the selling shareholders: (i) upon the conversion of the Senior Notes and the Subordinated Note, (ii) upon the exercise of the May 2012 Warrants and the June 2012 Warrants (collectively, the "Warrants"), (iii) pursuant to the terms of the June 2012 Purchase Agreement and (iv) upon the exercise of certain call option agreements with other existing shareholders of the Company (collectively, the "Call Option Agreements"). For additional information regarding the issuance of such securities, see "Summary—Securities Being Offered; Recent Private Placement Transactions" included elsewhere in this prospectus. We are registering the shares of Common Stock in order to permit the selling shareholders to offer the shares for resale from time to time. Except for the ownership of the Senior Notes, the Warrants and the shares of Common Stock issued and issuable pursuant to the June 2012 Purchase Agreement and the entering into the May 2012 Purchase Agreement and the June 2012 Purchase Agreement and the other transaction documents contemplated thereby, the selling shareholders holding the shares of Common Stock issued and issuable under the June 2012 Purchase Agreement, the Senior Notes, the Warrants and the Call Option Agreements have not had any material relationship with us within the past three years. Except for the ownership of the Subordinated Note issued pursuant to the Debt Exchange Agreement, and prior lending and equity arrangements previously disclosed by us in documents incorporated by reference herein, the selling shareholder holding the Subordinated Note has not had any material relationship with us within the past three years. Except for equity arrangements previously disclosed by us, the selling shareholders managed by PBC GP III, LLC have not had any material relationship with us within the past three years.

        The table below lists the selling shareholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of Common Stock held by each of the selling shareholders. The second column lists the number of shares of Common Stock beneficially owned by the selling shareholders, based on their respective beneficial ownership of shares of Common Stock, as of June 8, 2012, assuming conversion of the Senior Notes or Subordinated Note, as applicable, and exercise of the Warrants and the Call Option Agreements held by each such selling shareholder on that date, but taking account of any limitations on conversion and exercise set forth therein.

        The third column lists the shares of Common Stock being offered by this prospectus by the selling shareholders and does not take into account (A) any limitations on (i) conversion of the Senior Notes or Subordinated Note, as applicable, set forth therein or (ii) exercise of the Warrants or the Call Option Agreements set forth therein or (B) the number of shares of Common Stock issuable as adjustment shares pursuant to the terms of the June 2012 Purchase Agreement.

        In accordance with the terms of the respective registration rights agreements between us and each of the selling shareholders, this prospectus generally covers the resale of (i) all or a portion of the shares of our Common Stock previously issued to the selling shareholders, (ii) 135% of the sum of the maximum number of shares of Common Stock issuable upon conversion of the Senior Notes or Subordinated Note, as applicable, (iii) 135% of the sum of the maximum number of other shares of Common Stock issuable pursuant to the Senior Notes or Subordinated Note, as applicable, (iv) 135% of the sum of the maximum number of shares of Common Stock issuable upon exercise of the May 2012 Warrants, (v) 135% of the number of shares of Common Stock issued pursuant to the June 2012 Purchase Agreement, (vi) the maximum number of shares of Common Stock issuable upon exercise of the June 2012 Warrants, and (vii) the maximum number of other shares of Common Stock covered by the Call Option Agreements, each as of the trading day immediately preceding the date this registration statement was initially filed with the SEC. Because the conversion price of the Senior Notes and the Subordinated Note and the exercise price of the Warrants may be adjusted pursuant to the terms thereof, the number of shares that will actually be issued pursuant to the agreements and

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instruments referenced in this paragraph may be more or less than the number of shares being offered by this prospectus.

        The fourth column assumes the sale of all of the shares offered by the selling shareholders pursuant to this prospectus.

        Under the terms of the Senior Notes and the Warrants, a selling shareholder may not convert the Senior Notes or exercise the Warrants to the extent (but only to the extent) such selling shareholder and its affiliates would together beneficially own a number of shares of our Common Stock which would exceed 4.99% of the then outstanding shares of Common Stock following such exercise or conversion, as applicable. Under the terms of the Subordinated Note, the selling shareholder may not convert the Subordinated Note to the extent (but only to the extent) such selling shareholder and its affiliates would together beneficially own a number of shares of our Common Stock which would exceed 9.99% of the then outstanding shares of Common Stock following such conversion. Under the terms of the June 2012 Purchase Agreement, a selling shareholder may not be issued additional shares of Common Stock as adjustment shares to the extent such issuance would cause such selling shareholder, together with its affiliates, to beneficially own a number of shares of Common Stock which would exceed 9.99% of our then outstanding shares of Common Stock following such issuance, excluding for purposes of such determination shares of Common Stock not yet issuable pursuant to the June 2012 Purchase Agreement. Under the terms of the Call Option Agreements, a selling shareholder may not exercise a Call Option Agreement to the extent (but only to the extent) such selling shareholder and its affiliates would together beneficially own a number of shares of Common Stock which would exceed 9.99% of the then outstanding shares of Common Stock following such exercise. The number of shares in the second column reflects these limitations. The selling shareholders may sell all, some or none of their shares of our Common Stock in this offering. See "Plan of Distribution."

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Plan of Distribution

        We are registering the shares of Common Stock previously issued to the selling shareholders, the shares of Common Stock issuable upon the conversion of the Senior Notes and the Subordinated Note and the exercise of the Warrants, and, the shares of Common Stock issued and issuable under the June 2012 Purchase Agreement, and the shares of Common Stock covered by the Call Option Agreements to permit the resale of these shares of Common Stock by the selling shareholders from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of these shares of Common Stock. We will bear all fees and expenses incident to our obligation to register the shares of Common Stock.

        The selling shareholders may sell all or a portion of the shares of Common Stock held by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of Common Stock are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent's commissions. The shares of Common Stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, pursuant to one or more of the following methods:

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on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;



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in the over-the-counter market;



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in transactions otherwise than on these exchanges or systems or in the over-the-counter market;



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through the writing or settlement of options, whether such options are listed on an options exchange or otherwise;



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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;



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block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;



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purchases by a broker-dealer as principal and resale by the broker-dealer for its account;



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an exchange distribution in accordance with the rules of the applicable exchange;



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privately negotiated transactions;



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short sales;



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broker-dealers may agree with a selling shareholder to sell a specified number of such shares at a stipulated price per share;



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a combination of any such methods of sale; and



•

any other method permitted pursuant to applicable law.

        The selling shareholders may also sell shares of Common Stock under Rule 144 promulgated under the Securities Act of 1933, as amended (the "Securities Act"), if available, rather than under this prospectus. In addition, the selling shareholders may transfer the shares of Common Stock by other means not described in this prospectus. If the selling shareholders effect such transactions by selling shares of Common Stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the shares of Common Stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those

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customary in the types of transactions involved). In connection with sales of the shares of Common Stock or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of Common Stock in the course of hedging in positions they assume. The selling shareholders may also sell shares of Common Stock short and deliver shares of Common Stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders may also loan or pledge shares of Common Stock to broker-dealers that in turn may sell such shares.

        The selling shareholders may pledge or grant a security interest in some or all of the Senior Notes, the Subordinated Note, the Warrants or shares of Common Stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of Common Stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending, if necessary, the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus. The selling shareholders also may transfer and donate the shares of Common Stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

        To the extent required by the Securities Act and the rules and regulations thereunder, the selling shareholders and any broker-dealer participating in the distribution of the shares of Common Stock may be deemed to be "underwriters" within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of Common Stock is made, a prospectus supplement, if required, will be distributed, which will set forth the aggregate amount of shares of Common Stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling shareholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.

        Under the securities laws of some states, the shares of Common Stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares of Common Stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

        There can be no assurance that any selling shareholder will sell any or all of the shares of Common Stock registered pursuant to the registration statement, of which this prospectus forms a part.

        The selling shareholders and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of Common Stock by the selling shareholders and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the shares of Common Stock to engage in market-making activities with respect to the shares of Common Stock. All of the foregoing may affect the marketability of the shares of Common Stock and the ability of any person or entity to engage in market-making activities with respect to the shares of Common Stock.

        We will pay all expenses of the registration of the shares of Common Stock pursuant to the registration rights agreement, estimated to be $164,760 in total, including, without limitation, SEC filing fees and expenses of compliance with state securities or "blue sky" laws; provided, however, a selling shareholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling shareholders against liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreements or the selling shareholders will be entitled to contribution. We

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may be indemnified by the selling shareholders against civil liabilities, including liabilities under the Securities Act that may arise from any written information furnished to us by the selling shareholder specifically for use in this prospectus, in accordance with the related registration rights agreements or we may be entitled to contribution.

        Once sold under the registration statement, of which this prospectus forms a part, the shares of Common Stock will be freely tradable in the hands of persons other than our affiliates.

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Description of Common Stock and Other Securities

        This section summarizes specific terms and provisions of our Common Stock that may be resold by the selling shareholders upon conversion of the Senior Secured Notes or the Subordinated Note or upon exercise of the Warrants, or otherwise. This summary does not purport to be complete in all respects. This description is subject to and qualified in its entirety by reference to of our amended and restated articles of incorporation and amended and restated bylaws, and certain provisions of the Florida Business Corporation Act, or the FBCA. Our amended and restated articles of incorporation have been filed with the SEC as Exhibit 3.1 to the Form S-1/A filed on September 20, 2011, and is incorporated by reference into this prospectus. Our amended and restated bylaws have been filed with the SEC as Exhibit 3.2 to the Form S-1/A filed on November 4, 2011, and are incorporated by reference into this prospectus. See "Where You Can Find More Information" and "Incorporation by Reference" included elsewhere this prospectus.

General

        Our authorized capital stock consists of 125,000,000 shares, each with a par value of $0.01 per share, of which:

•

100,000,000 shares are designated as Common Stock; and



•

25,000,000 shares are designated as preferred stock.

        As of June 8, 2012 we had outstanding 43,545,320 shares of our Common Stock, held of record by 57 shareholders. As of June 8, 2012, no shares of our preferred stock were outstanding.

        In addition, as of June 8, 2012, 6,203,537 shares of our Common Stock were issuable upon the exercise of outstanding options, 11,035,667 shares of our Common Stock were issuable upon the exercise of convertible notes, 4,136,646 shares of our Common Stock were issuable upon the exercise of outstanding warrants and outstanding exchange rights exercisable into 7,667 shares of our Common Stock. As of June 8, 2012, 5,457,358 additional shares of our Common Stock were available for future grants of stock options and restricted stock under our 2010 Stock Plan.

Common Stock

        Voting Rights.    The holders of shares of our Common Stock are entitled to one vote per share on all matters submitted to a vote of the shareholders and may not cumulate their votes for the election of directors. The holders of our Common Stock do not have preemptive rights to subscribe for additional shares of any class that may be issued by us, and no share of Common Stock is entitled in any manner to any preference over any other share of such stock.

        Dividends.    The holders of shares of our Common Stock are entitled to receive dividends when, as and if declared by our board of directors in its sole and absolute discretion out of funds legally available therefor. Upon our dissolution, the holders of Common Stock are entitled to share, pro rata, in our net assets after payment of or provision for all of our debts and liabilities, and after provision for any class of preferred stock or other senior security which may be issued by us. Each share of Common Stock is entitled to participate on a pro rata basis with each other share of such stock in dividends and other distributions declared on shares of any class of Common Stock.

Senior Notes

        For a description of the Senior Notes, see "Summary—Securities Being Offered; Recent Private Placement Transactions" included elsewhere in this prospectus and the description thereof set forth in our Current Report on Form 8-K filed with the SEC on May 8, 2012.

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Warrants

        For a description of the Warrants, see "Summary—Securities Being Offered; Recent Private Placement Transactions" included elsewhere in this prospectus, the description of the May 2012 Warrants set forth in our Current Report on Form 8-K filed with the SEC on May 8, 2012, and the description of the June 2012 Warrants set forth in our Current Report on Form 8-K filed with the SEC on June 8, 2012.

Subordinated Note

        For a description of the Subordinated Note, see "Summary—Securities Being Offered; Recent Private Placement Transactions" included elsewhere in this prospectus and the description thereof set forth in our Current Report on Form 8-K filed with the SEC on May 8, 2012.

Registration Rights

        In addition to the registrations rights attaching to the Senior Notes, the Subordinated Note, the Warrants, and the currently issued shares of Common Stock included in this prospectus, we have granted certain of the holders of shares of our Common Stock, and of other securities or instruments issued by us that are exercisable, convertible or exchangeable into shares of our Common Stock, representing an aggregate of 19,080,535 shares of our issued or issuable Common Stock, registration rights that enable such holders to require us to file a registration statement registering their shares of our Common Stock for resale to the public. These registration rights include demand registration rights, Form S-3 registration rights, and piggyback registration rights. We are also responsible for paying all expenses incurred in connection with the registrations, including, without limitation, all registration, filing, qualification, printers' and accounting fees, fees and disbursements of counsel for us, and the reasonable fees and disbursements of one counsel for the holders (up to $25,000 in the case of a demand registration), but excluding underwriting discounts and commissions. We have agreed to indemnify each holder of such registration rights against certain liabilities under the Securities Act in connection with any registration of their registrable shares of our Common Stock.

        Demand Registration Rights.    Our shareholders with demand registration rights may, on not more than two occasions unless the registration uses a Form S-3, request that we register all or a portion of their shares of our Common Stock subject to such rights. If our Board of Directors determines that it would be materially detrimental to us and our shareholders for a registration statement to become effective or to remain effective, we may defer a demand registration for up to 120 days.

        Piggyback Registration Rights.    If, subject to certain exceptions, we propose to register any of our stock or other securities under the Securities Act in connection with the public offering of such securities solely for cash, we are required to promptly give each shareholder with piggyback registration rights with respect thereto written notice of such registration. Upon the written request of a shareholder, we will, subject to certain limitations, cause to be registered under the Securities Act all shares of our Common Stock subject to such rights that such shareholder has requested to be registered. If an underwriter selected for an underwritten offering determines that the success of the offering requires a limitation on the number of shares to be underwritten, then each shareholder's shares in the offering, including the shares held by the shareholders with registration rights, will be reduced pro rata. For the sake of clarity, the offering of shares by the selling shareholders as described in this prospectus does not trigger the piggyback registration rights described in this paragraph.

Anti-Takeover Effects of our Amended and Restated Articles of Incorporation, Amended and Restated Bylaws and Applicable Laws

        Our amended and restated articles of incorporation and our amended and restated bylaws contain certain provisions intended to enhance the likelihood of continuity and stability in the composition of

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our board of directors and which may have the effect of delaying, deterring or preventing a future takeover or change in control of our company unless such takeover or change in control is approved by the board of directors. A shareholder might consider an attempt to effect such a takeover or a change in control to be in its best interest, including those attempts that might result in a premium over the market price for the shares held by our existing shareholders.

        These provisions include:

Removal of Directors; Vacancies

        Our amended and restated bylaws provide that directors may be removed only for cause. In addition, our amended and restated bylaws provide that any vacancies on our board of directors, including as the result of newly created directorships, except as otherwise required by law, may be filled only by the affirmative vote of a majority of the remaining directors, even if less than a quorum. The foregoing provisions will prevent shareholders from removing incumbent directors without cause and from filling vacancies on our board of directors with their own nominees.

Advance Notification of Shareholder Proposals

        Our amended and restated bylaws provide that shareholders seeking to present proposals before an annual meeting of shareholders or to nominate candidates for election as directors at an annual meeting of shareholders must provide advance notice thereof in writing, and also will specify requirements as to the form, content and timing of such advance notice. Although our amended and restated bylaws do not give our board of directors the power to approve or disapprove shareholder nominations of candidates or proposals regarding other business to be conducted at an annual meeting of shareholders, our amended and restated bylaws may have the effect of precluding the conduct of some business at an annual meeting of shareholders if the proper procedures are not followed.

Special Meetings of Shareholders

        Our amended and restated bylaws provide that, except as otherwise required by law, special meetings of our shareholders can only be called by the chairman of our board of directors, our board of directors or one or more shareholders holding shares of our Common Stock representing at least 50% of the combined voting power of our outstanding Common Stock. Except as provided above, shareholders will not be permitted to call a special meeting or to require our board of directors to call a special meeting.

Undesignated Preferred Stock

        Our amended and restated articles of incorporation as currently in effect confer on our board of directors the power to authorize undesignated or "blank check" preferred stock, which will make it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us. These and other provisions of our charter documents may have the effect of deterring hostile takeovers or delaying or preventing changes in the control or the management of our company.

Anti-takeover Effects of Florida Law

        We are subject to anti-takeover provisions that apply to public corporations organized under Florida law unless the corporation has elected to opt out of those provisions in its articles of incorporation or its bylaws. We have not elected to opt out of these provisions.

        Control-Share Acquisitions.    The FBCA contains a control-share acquisition statute which denies voting rights to "control shares" of an "issuing public corporation," as defined in the statute, unless the

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acquisition (1) is approved by the corporation's board of directors before the acquisition or (2) is effected pursuant to a statutory merger or share exchange to which the corporation is a party.

        Control shares are shares that (but for the operation of the statute) would raise the holder's voting power to or above the following threshold levels:

•

one-fifth or more but less than one-third of all voting power;



•

one-third or more but less than a majority of all voting power; or



•

a majority or more of all voting power.

        Voting rights may be restored only if the holder files an acquiring person statement and requests a shareholder meeting to vote on whether the holder's control shares should be accorded voting rights. Voting rights are restored only to the extent approved by the disinterested shareholders.

        An issuing public corporation means a corporation that has:

•

one hundred or more shareholders of record;



•

its principal place of business, its principal office, or substantial assets within Florida; and



•

either (i) more than 10% of its shareholders resident in Florida, (ii) more than 10% of its shares owned by residents of Florida, or (iii) one thousand shareholders resident in Florida.

        Affiliated Transactions.    The FBCA provides that an "affiliated transaction" of a Florida corporation with an "interested shareholder," as those terms are defined in the statute and discussed more fully below, generally must be approved by the affirmative vote of the holders of two-thirds of the outstanding voting shares, other than the shares beneficially owned by the interested shareholder. The FBCA defines an "interested shareholder" as any person who is the beneficial owner of 10% or more of the outstanding voting shares of the corporation. The affiliated transactions covered by the FBCA include, with specified exceptions:

•

mergers and consolidations to which the corporation and the interested shareholder are parties;



•

sales or other dispositions of assets to the interested shareholder representing 5% or more of the aggregate fair market value of the corporation's assets, outstanding shares, earning power or net income to the interested shareholder;



•

issuances by the corporation of 5% or more of the aggregate fair market value of its outstanding shares to the interested shareholder;



•

the adoption of any plan for the liquidation or dissolution of the corporation proposed by or pursuant to an arrangement with the interested shareholder;



•

any reclassification of the corporation's securities, recapitalization of the corporation, merger or consolidation, or other transaction which has the effect of increasing by more than 5% the percentage of the outstanding voting shares of the corporation beneficially owned by the interested shareholder; or



•

the receipt by the interested shareholder of certain loans or other financial assistance from the corporation.

        The foregoing transactions generally also include transactions involving any affiliate or associate of the interested shareholder and involving or affecting any direct or indirect majority-owned subsidiary of the corporation.

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        The two-thirds shareholder approval requirement does not apply if, among other things, subject to specified qualifications:

•

the transaction has been approved by a majority of the corporation's disinterested directors;



•

the interested shareholder has been the beneficial owner of at least 80% of the corporation's outstanding voting shares for at least five years preceding the transaction;



•

the interested shareholder is the beneficial owner of at least 90% of the outstanding voting shares; or



•

specified fair price and procedural requirements are satisfied.

Limitation of Liability and Indemnification Matters

        The FBCA authorizes corporations incorporated in Florida to indemnify any person who was or is a party to any proceeding other than an action by, or in the right of, the corporation, by reason of the fact that he or she is or was a director, officer, employee, or agent of the corporation. The indemnity also applies to any person who is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation or other entity. The indemnification applies against liability incurred in connection with such a proceeding, including any appeal, if the person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation. To be eligible for indemnity with respect to any criminal action or proceeding, the person must have had no reasonable cause to believe his or her conduct was unlawful.

        In the case of an action by or on behalf of a corporation, indemnification may not be made if the person seeking indemnification is found liable, unless the court in which the action was brought determines that such person is fairly and reasonably entitled to indemnification.

        The indemnification provisions of the FBCA require indemnification if a director, officer, employee or agent has been successful in defending any action, suit or proceeding to which he or she was a party by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other entity. The indemnity covers expenses actually and reasonably incurred in defending the action.

        The indemnification authorized under the FBCA is not exclusive and is in addition to any other rights granted to officers, directors and employees under the articles of incorporation or bylaws of the corporation or any agreement between officers and directors and the corporation.

        Our amended and restated bylaws provide for the indemnification of our directors, officers, employees and agents and for the advancement of expenses incurred in connection with the defense of any proceeding that the director, officer, employee or agent was a party to by reason of the fact that he or she is or was a director, officer, employee or agent of our corporation, or at our request, a director, officer, employee or agent of another corporation. Our amended and restated bylaws also provide that we may purchase and maintain insurance on behalf of any such director, officer, employee or agent against liability asserted against the director, officer, employee or agent in such capacity.

        Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by a director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of

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appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of this issue.

        Under the FBCA, a director is not personally liable for monetary damages to us or to any other person for acts or omissions in his or her capacity as a director except in certain limited circumstances. Those circumstances include violations of criminal law (unless the director had reasonable cause to believe that such conduct was lawful or had no reasonable cause to believe such conduct was unlawful), transactions in which the director derived an improper personal benefit, transactions involving unlawful distributions, and conscious disregard for the best interest of the corporation or willful misconduct (only if the proceeding is by or in the right of the corporation). As a result, shareholders may be unable to recover monetary damages against directors for actions taken by them which constitute negligence or gross negligence or which are in violation of their fiduciary duties, although injunctive or other equitable relief may be available.

Transfer Agent and Registrar

        The transfer agent and registrar for our Common Stock is American Stock Transfer & Trust Company.

Listing

        Our Common Stock is listed on the NYSE under the symbol "DDMG".

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Legal Matters

        Legal matters regarding the validity of the shares of our Common Stock offered by this prospectus will be passed upon on our behalf by Eavenson & Kairalla, P.L.

Experts

        The consolidated financial statements as of December 31, 2011 and 2010, and for each of the years in the three-year period January 7, 2009 (the inception date) through December 31, 2011, are incorporated in this prospectus by reference from our Annual Report on Form 10-K for the year ended December 31, 2011, have been audited by SingerLewak LLP, independent registered public accounting firm, as stated in their report which is incorporated herein by reference and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

Where You Can Find More Information

        This prospectus is being delivered to you in accordance with the U.S. securities laws. We have filed a registration statement with the SEC to register the Common Stock that the selling shareholders are offering to you. This prospectus is part of that registration statement. As allowed by the SEC's rules, this prospectus does not contain all of the information that is included in the registration statement.

        You may obtain a copy of the registration statement, or a copy of any other filing we have made with the SEC, directly from the SEC. You may either:

•

read and copy any materials we have filed with the SEC at the SEC's Public Reference Room maintained at 450 Fifth Street, N.W., Washington, D.C. 20549; or



•

visit the SEC's Internet site at http://www.sec.gov, which contains reports, proxy and information statements, and other information regarding us and other issuers that file electronically with the SEC.

        You may obtain more information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

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23,684,577 Shares

Common Stock

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PROSPECTUS

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Part II

Information Not Required in Prospectus

Item 13.    Other Expenses of Issuance and Distribution(1)

        The following is a list of the estimated expenses to be incurred by us in connection with the registration of the shares of Common Stock registered hereunder:

Item 14.    Indemnification of Directors and Officers

        The Registrant's officers and directors are and will be indemnified under Florida law, their employment agreements and our amended and restated articles of incorporation and amended and restated bylaws.

        The Florida Business Corporation Act, under which the Registrant is organized, permits a Florida corporation to indemnify a present or former director or officer of the corporation (and certain other persons serving at the request of the corporation in related capacities) for liabilities, including legal expenses, arising by reason of service in such capacity if such person shall have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and in any criminal proceeding if such person had no reasonable cause to believe his conduct was unlawful. However, in the case of actions brought by or in the right of the corporation, no indemnification may be made with respect to any matter as to which such director or officer shall have been adjudged liable, except in certain limited circumstances.

        The Registrant's amended and restated bylaws provide that the Registrant shall indemnify directors and executive officers to the fullest extent now or hereafter permitted by the Florida Business Corporation Act.

        The Registrant maintains insurance policies insuring each of its directors and officers against certain civil liabilities.

Item 15.    Recent Sales of Unregistered Securities

        The following sets forth information regarding securities sold or issued by the Registrant without registration under the Act since January 7, 2009, the date that the Registrant was formed:

Sale and issuance of Common Stock

        On January 7, 2009, the Registrant issued 12,226,107 shares of its Common Stock to its founders, for aggregate consideration of $300.

        From August 2010 through January 2011, the Registrant sold 176,775 shares of its Common Stock to accredited investors (as defined in Rule 501(a) of Regulation D promulgated under the Act) at a purchase price of $6.00 per share, for total proceeds of $1.1 million. During the same period, the Registrant exchanged 194,996 shares of its Common Stock for 194,996 shares of common shares in Digital Domain.

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        In November 2010, the Registrant issued 423,287 shares of its Common Stock in connection with the acquisition of assets from In-Three, Inc.

        In December 2010, the Registrant issued 100,000 shares of its Common Stock to a former director of its subsidiary, Digital Domain, in exchange for 83,333 shares of Digital Domain common stock held by that individual.

        During the first quarter of 2011, the Registrant sold 2,025,001 shares of its Common Stock to accredited investors satisfying the definition of "qualified institutional buyers" (as defined in Rule 144A promulgated under the Act) at a purchase price of $9.63 per share, for total proceeds of $19.5 million. For each two shares purchased, these investors also received a warrant to purchase one share of the Registrant's Common Stock, or an aggregate of 1,012,502 warrants, with an exercise price of $9.63 per share.

        In July 2011, three of the Registrant's founders, and an entity affiliated with one such founder, transferred an aggregate of 3,100,000 shares of Digital Domain common stock to the Registrant in exchange for the issuance to such persons of an aggregate of 1,931,465 shares of the Registrant's Common Stock, at an exchange ratio of 0.6231 shares of the Registrant's Common Stock for each share of Digital Domain common stock so transferred.

        In August 2011, the convertible promissory note held by a private equity firm met the mandatory conversion provision contained in the Registrant's credit agreement with such private equity firm and was converted into 726,594 shares of the Registrant's Common Stock.

        In September 2011, a holder of Digital Domain common stock transferred 1,500,001 shares of Digital Domain common stock to the Registrant in exchange for the issuance of 934,580 shares of the Registrant's Common Stock, at an exchange ratio of 0.6231 shares of the Registrant's Common Stock for each share of Digital Domain common stock so transferred.

        In November 2011, in connection with the consummation of the Registrant's initial public offering, pursuant to the terms of various loan and warrant agreements with various entities affiliated with PBC GP III, LLC, a private equity firm, the convertible debt and warrants held by such entities were automatically converted into 15,103,083 shares of the Registrant's Common Stock.

        During the first quarter of 2012, the Registrant issued an aggregate of 1,038,375 shares of its Common Stock in exchange for an aggregate of 1,250,000 shares of common stock of Digital Domain Institute, Inc., a subsidiary of the Registrant, pursuant to exchange rights previously granted the minority shareholders of Digital Domain Institute, Inc. under share exchange option agreements entered into among us, Digital Domain Institute, Inc., and each of such shareholders.

        In April 2012, the Registrant issued an aggregate of 1,038,375 shares of its Common Stock in exchange for an aggregate of 1,250,000 shares of common stock of Digital Domain Institute, Inc., a subsidiary of the Registrant, pursuant to exchange rights previously granted to the minority shareholders of Digital Domain Institute, Inc. under share exchange option agreements entered into among us, Digital Domain Institute, Inc., and each of such shareholders.

        In May 2012, the Registrant issued 623,025 shares of its Common Stock in exchange for an aggregate of 750,000 shares of common stock of Digital Domain Institute, Inc., pursuant to exchange rights previously granted to a minority shareholder of Digital Domain Institute, Inc. under a share exchange option agreement entered into among us, Digital Domain Institute, Inc., and such shareholder.

        In May 2012, in connection with the transactions described in the prospectus included in this registration statement, the Registrant's then senior secured lender exercised a warrant to purchase 435,331 shares of the Registrant's Common Stock previously issued to such lender and the Registrant

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repurchased all but 145,000 shares of the Registrant's Common Stock issued to such lender in connection with such exercise.

        In May 2012, the Registrant issued 223,167 shares of the Registrant's Common Stock in connection with the cashless exercise of warrants previously issued to a placement agent who received such warrants as partial compensation for services provided in connection with private placements of shares of the Registrant's Common Stock in 2011.

        In June 2012, the Registrant sold 1,500,004 shares of its Common Stock, at a purchase price of $7.00 per share, to certain institutional investors, for total gross proceeds of $10.5 million. In connection with such sale, these investors also received warrants to purchase an aggregate of 600,000 shares of the Registrant's Common Stock, as an exercise price of $8.05 per share.

        Each of the above-described transactions was exempt from the registration requirements of the Act pursuant to Section 4(2) thereof or Regulation D or Rule 701 promulgated thereunder, as transactions not involving a public offering or involving the issuance of securities in certain compensatory circumstances. With respect to each transaction listed above, no general solicitation was made by either the Registrant or any person acting on its behalf; the securities sold are subject to transfer restrictions; and the certificates representing the securities contain an appropriate legend stating that such securities have not been registered under the Act and may not be offered or sold other than pursuant to an effective registration statement under the Act or an applicable exemption from the registration requirements thereof.

Sale and issuance of Common Stock equivalents

        In September and October 2009, the Registrant entered into a $14.0 million secured promissory note agreement with a commercial lender. In connection with this loan, the Registrant granted the commercial lender an option to purchase 2,157,549 shares of the Registrant's Common Stock with an exercise price of $10.00. Such option was increased by 375,000 shares on December 30, 2010. The Registrant purchased and extinguished this option in July 2011.

        In February 2010, the Registrant issued, to two third-party potential lenders and business partners, warrants to purchase an aggregate of 283,012 shares of its Common Stock, with an exercise price of $10.00 each.

        In September 2010, the Registrant granted its Chief Executive Officer a warrant to purchase 839,105 shares of its Common Stock pursuant to its 2010 Stock Plan, in exchange for guaranteeing the Registrant's payment obligations under certain notes payable. During 2011, this individual exercised 839,105 warrants at an exercise price of $0.01 per share.

        In September and November 2010, the Registrant borrowed in a series of transactions, an aggregate of $15.7 million from private equity investors in the form of a secured promissory note, convertible into an aggregate of 5,609,547 shares of the Registrant's Common Stock. In addition, the private equity investors were granted warrants to purchase shares of the Registrants Series A Preferred Stock that were convertible into an aggregate of 7,713,006 shares of the Registrant's Common Stock. These warrants have an exercise price of $0.01 per share.

        In December 2010, and April 2011, the Registrant borrowed $4.2 million from a private equity investor in the form of a junior secured promissory note, which was converted in its entirety into 726,594 shares of the Registrant's Common Stock. In addition, the private equity investor was granted warrants to purchase 1,231,667 shares of the Registrant's Common Stock. These warrants have an exercise price of $0.01 per share.

        In December 2010, the Registrant issued warrants to its commercial lender to purchase 435,331 shares of the Registrant's Common Stock with an exercise price of $10.00.

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        In February and March 2011, the Registrant issued options to purchase 202,500 shares of its Common Stock at an exercise price of $8.03 per share, to a placement agent in connection with a private placement of shares of the Registrant's Common Stock.

        In June 2011, Digital Domain sold 1,500,001 shares of its common stock to a single accredited investor, for an aggregate purchase price of $2,500,000. In connection with this transaction, the Registrant granted an exchange right to the investor, for no additional consideration, pursuant to which the investor has the right to exchange each such share of stock purchased for 0.6231 shares of the Registrant's Common Stock.

        In July 2011, the Registrant issued a convertible promissory note, in the initial principal amount of $8.0 million, contained a conversion feature pursuant to which all amounts owing under this note would had been convertible into 2,960,549 shares of the Registrant's Common Stock as of May 7, 2012. The lender was also issued warrants to purchase up to 2% of the shares of the Registrant's Common Stock outstanding (on an as-converted, fully-diluted basis), for an aggregate exercise price of $10.00. The warrants ultimately vested at 1%, and were exchangeable for 435,331 shares of the Registrant's Common Stock as of May 7, 2012. In addition, in consideration of its services in arranging this debt financing, the Registrant issued to an affiliate of a private equity firm that provided debt financing to the Registrant warrants to purchase an aggregate of 418,863 shares of its Common Stock, at an exercise price of $0.01 per share. In May 2012, as discussed below, such senior secured convertible note was exchanged for a subordinated note in the aggregate amount of $8.0 million. The warrants for 435,331 shares of the Registrants Common Stock were exercised, with all of but 145,000 shares being repurchased by the Company for $2.5 million.

        In August 2011, Digital Domain Institute, Inc. sold an aggregate of 3,250,000 shares of its common stock to five accredited investors, for an aggregate purchase price of $26,000,000. In connection with this transaction, the Registrant granted an exchange right to each of these investors, for no additional consideration, pursuant to which the investors have the right to exchange each such share of stock purchased, from and after the date that is the earlier of (i) the 120^th day after the date of such purchase, and (ii) the consummation by the Registrant of an initial public offering of its Common Stock, for 0.8307 shares of the Registrant's Common Stock. Also in connection with this transaction, the Registrant issued warrants to two placement agents to purchase an aggregate of 269,978 shares of the Registrant's Common Stock; 202,483 of the underlying shares are subject to an exercise price of $8.03 per share, with the balance of 67,495 such shares subject to an exercise price of $9.63 per share.

        In September 2011, the Registrant issued warrants to purchase 934,363 shares of the Registrant's Common Stock at an exercise price of $6.42 per share, to a placement agent in connection with certain private placements of shares of the Registrant's Common Stock and the common stock of Digital Domain Institute, Inc.

        In November 2011, the Registrant issued warrants to certain of its existing private equity investors that are exercisable into an aggregate of 130,000 shares of the Registrant's Common Stock at an exercise price of $0.01 per share, in connection with certain amendments to loan agreements between the Registrant and such private equity investors or their affiliates.

        In November 2011, the Registrant issued warrants to a broker-dealer that are exercisable into an aggregate of 200,000 shares of the Registrant's Common Stock at an exercise price of $10.20 per share, in connection with consulting services provided in connection with the Registrant's initial public offering.

        In March 2012, the Registrant borrowed $3.0 million from a customer in the form of a convertible promissory note, which can be converted at the election of the note holder at any time before July 18, 2012 into 541,489 shares of the Registrant's Common Stock (as of June 8, 2012).

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        In May 2012, the Registrant issued senior secured convertible notes in the aggregate original principal amount of $35.0 million and warrants to purchase up to 2,041,666 shares of the Registrant's Common Stock (as of June 8, 2012), at an exercise price of $6.00 per share (as of June 8, 2012), to certain institutional investors. As of June 8, 2012, the senior secured convertible notes and all anticipated future interest were convertible into 7,282,057 shares of the Registrant's Common Stock.

        In May 2012, the Registrant issued a subordinated note in the aggregate original principal amount of $8.0 million to the Registrant's then senior secured lender in connection with a debt exchange transaction, effectively reducing the aggregate outstanding principal balance owing by the Registrant to such then senior secured lender. The initial conversion price under the subordinated note is (i) $2.50 per share for payment of any portion of the original principal amount and (ii) $5.50 per share for payment of any other amounts owing thereunder, subject to adjustment as provided in the subordinated note. As of June 7, 2012, the subordinated note is convertible into 3,200,000 shares of the Registrant's Common Stock convertible at $2.50 per share, and 12,121 shares of the Registrant's Common Stock at $5.50 per share.

        Since January 7, 2009, the Registrant has issued to certain employees and consultants options to purchase an aggregate of 6,203,537 shares of its Common Stock at a weighted average exercise price of $5.79 as of June 8, 2012.

        Each of the above-described transactions was exempt from the registration requirements of the Act pursuant to Section 4(2) thereof or Regulation D or Rule 701 promulgated thereunder, as transactions not involving a public offering or involving the issuance of securities in certain compensatory circumstances. With respect to each transaction listed above, no general solicitation was made by either the Registrant or any person acting on its behalf; the securities sold are subject to transfer restrictions; and the certificates representing the securities contain an appropriate legend stating that such securities have not been registered under the Act and may not be offered or sold other than pursuant to an effective registration statement under the Act or an applicable exemption from the registration requirements thereof.

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Item 16.    Exhibits

(a)

Exhibits.

        The following exhibits are filed as part of this Registration Statement on Form S-1:

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(b)

Financial Statement Schedules.

        Not applicable.

Item 17.    Undertakings

        The undersigned Registrant hereby undertakes that:

        (a)   To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

          (i)  to include any prospectus required by Section 10(a)(3) of the Securities Act;

         (ii)  to reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated

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maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

        (iii)  to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

        (b)   That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (c)   To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

        (d)   That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

          (i)  each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

         (ii)  each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

        (e)   Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit of proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

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SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Port St. Lucie, State of Florida, on June 11, 2012.

        KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John C. Textor as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments and registration statements filed pursuant to Rule 462(b) under the Securities Act of 1933) to this Registration Statement and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

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INDEX TO EXHIBITS

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