
<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549


                                   FORM 8-K

                                CURRENT REPORT

    Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

       Date of Report (Date of earliest event reported):  March 23, 1999

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                             GoodNoise Corporation
                (Exact name of Company as specified in charter)

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          Florida                   0-24671               65-0207877
(State or other jurisdiction     (Commission            (IRS Employer 
    of incorporation)            File Number)         Identification No.)

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719 Colorado Ave., Palo Alto, CA                             94303
(Address of principal executive offices)                   (Zip Code)
 
Company's telephone number, including area code          (650) 322-8910
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                                Not applicable
         (Former name or former address, if changed since last report)
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Item 5.  Other Events.

     On March 23, 1999, the Company completed a private placement of
approximately 118,000 shares of Series B Convertible Preferred Stock (the
"Series B Shares") for aggregate net proceeds of approximately $31 million.
Each Series B Share is initially convertible into 100 shares of the Company's
Common Stock.

Terms of the Series B Shares

     The following is a summary of the rights, preferences and privileges of the
Series B Shares and the rights granted pursuant to the holders of the Series B
Shares pursuant to the Company's Restated Articles of Incorporation and that
certain Investor Rights Agreement dated as of March 23, 1999 (the "Financing
Agreements").  Such summary is qualified in full by reference to the full text
of the Financing Agreements which are filed as an exhibit to this Report.

     Voting Rights.  The holders of the Series B Shares are entitled to a number
of votes equal to the number of shares of Common Stock issuable upon conversion
of the Series B Shares.  The holders of the Series B Shares are also entitled to
elect one member of the Board of Directors.

     Liquidation Preference.  Upon any liquidation, dissolution or winding up of
the affairs of the Company, the holder of each Series B Share shall be entitled
to be paid $300 per share (the "Series B Preference Amount").  If the assets of
the Company upon such event are insufficient to make such payment in full, then
the holders of Series B Shares shall be entitled to pro rata distribution of all
the assets of the Company.  After payment in full of the liquidation preference
to the holders of Series B Shares, such holders are entitled to no further
distributions.

     Dividends.  The Series B Shares are entitled to dividends at an annual rate
of 6% of the Series B Preference Amount.  The payment of such amounts may be
deferred until the Company completes an initial underwriting public offering, is
sold or until March 31, 2004.

     Conversion.  Each Series B Shares is initially convertible into 100 shares
of Common Stock at the election of the holder thereof.  All Series B Shares are
subject to conversion on the closing of an underwritten public offering with
gross proceeds of $25 million or more at a per share price of $6 or more or the
approval of the holders of 67% of the Series B Shares.

     Adjustments to Conversion Rate.  The Conversion Rate is subject to
proportional adjustment upon any stock split, stock dividend or other similar
change to the capital stock of the Company and certain other adjustments upon
future issuances of Common Stock or rights to acquire Common Stock at a price
less than $3 per share.

     Redemption.  In the event of certain defaults by the Company or if the
Series B Shares have not been converted after five years, the holders of the
Series B Shares have the right to require the Company to redeem the Series B
Shares.

     Fundamental Changes. Certain corporate actions, as more fully defined in
the Company's Restated Articles of Incorporation, require the approval of the
holders of 67% of the Series B Shares.

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     Registration Rights.  The Company is obligated to promptly (and in any
event within 120 days of the first sale of the Series B Shares) file a
registration statement (the "Registration Statement") with the Securities and
Exchange Commission (the "SEC") to cover the resale of the Company's Common
Stock issuable upon the conversion of the Series B Shares.

Effect on Rights of Existing Security Holders

     There is no change to the rights, preferences or privileges of the holders
of the Company's Common Stock as a result of the transactions which are the
subject of the Financing Agreements.  However, in addition to the dilutive
impact of the issuance of additional shares of capital stock, the Series B
Shares have a liquidation preference which entitles the holders thereof to
receive payment upon any dissolution or liquidation of the Company in preference
to the holders of Common Stock.

Item 7.  Exhibits.

      (a)  Financial statements of business acquired.
           
                 Not applicable.

     (b)   Pro forma financial information.
           
                Not applicable.

     (c)   Exhibits.

           Exhibit No.                         Description
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              3.1            Restated Articles of Incorporation

             10.1            Investor Rights Agreement dated March 23, 1999

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                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                    GOODNOISE CORPORATION


Date:  April 2, 1999                By: /s/ Joseph Howell
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                                       Joseph Howell, Chief Financial Officer

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                                 EXHIBIT INDEX

  Exhibit No.                          Description
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3.1               Restated Articles of Incorporation

10.1              Investor Rights Agreement dated March 23, 1999
 
