As filed with the Securities and Exchange Commission on October 29,
1997.
Registration No. 333-36949
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
ACTIVISION, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2606438
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3100 Ocean Park Boulevard
Santa Monica, California 90405
(310) 255-2000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
____________________
Robert A. Kotick
Chairman of the Board and Chief Executive Officer
ACTIVISION, INC.
3100 Ocean Park Boulevard
Santa Monica, California 90405
(310) 255-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
____________________
Copies To:
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
Attention: Kenneth L. Henderson, Esq.
Telephone No.: (212) 541-2000
Facsimile No.: (212) 541-4630
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
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, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
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: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
Title of Class Proposed Proposed
of Securities Amount Maximum Maximum Amount
to be to be Offering Price Aggregate of Regis-
Registered Registered Per Share (1) Offering Price tration Fee
Common Stock,
$.000001 par
value. . . . . 1,074,648 shares $15.0625 $16,186,886 $4,905(2)
(1) Estimated solely for purposes of calculating the registration fee
pursuant
to the provisions of Rule 457(c) under the Securities Act of 1933, as
amended, based on the average of the reported last high and low sales
prices on the NASDAQ National Market System on September 22, 1997.
(2) Previously paid.
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.
==============================================================================
1,074,648 Shares
ACTIVISION, INC.
Common Stock
____________________
This Prospectus relates to 1,074,648 shares of Common Stock (the "Common
Stock"), par value $.000001 per share, of Activision, Inc. (the "Company")
being offered for the account of certain of the Company's stockholders (each a
"Selling Stockholder" and collectively the "Selling Stockholders"). See
"Selling Stockholders." The shares of Common Stock offered hereby were issued
to the Selling Stockholders in connection with (i) the issuance by the Company
to the shareholders of Raven Software Corporation ("Raven") and certain members
of Hurley, Burish & Milliken, S.C., Raven's counsel, of 1,043,000 shares of
Common Stock pursuant to a merger agreement, and (ii) the issuance to Bruce
Willis and William Morris Agency, Inc., his agent, of 31,648 shares of Common
Stock pursuant to a personal services and license agreement.
The Company is a leading diversified international publisher and
developer of interactive entertainment software. The Company's products span
a wide range of product genres, including action, adventure, strategy and
simulation. Since its founding in 1979, the Company has published hundreds
of entertainment software products for a variety of personal computer and
console platforms. See "The Company."
The Common Stock is traded on the NASDAQ National Market System under the
symbol "ATVI." On September 22, 1997, the last sale price for the Common
Stock as reported on the NASDAQ National Market System was $15.25 per share.
No underwriting is being utilized in connection with this registration of
Common Stock and, accordingly, the shares of Common Stock are being offered
without underwriting discounts. The expenses of this registration will be paid
by the Company. Normal brokerage commissions, discounts and fees will be
payable by the Selling Stockholders.
For a discussion of certain matters which should be considered by
prospective investors, see "Risk Factors" commencing on page 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is October 29, 1997.
RISK FACTORS
Before purchasing any of the shares of Common Stock offered hereby,
prospective investors should carefully consider the following factors in
addition to the other information in this Prospectus.
Fluctuations In Quarterly Results; Future Operating Results Uncertain;
Seasonality
The Company's quarterly operating results have varied significantly in
the
past and will likely vary significantly in the future depending on numerous
factors, several of which are not under the Company's control. Such factors
include, but are not limited to, demand for the Company's products and those
of its competitors, the size and rate of growth of the interactive
entertainment software market, development and promotional expenses relating
to the introduction of new products, changes in computing platforms, product
returns, the timing of orders from major customers, delays in shipment, the
level of price competition, the timing of product introduction by the Company
and its competitors, product life cycles, software defects and other product
quality problems, the level of the Company's international revenues, and
personnel changes. Products are generally shipped as orders are received,
and consequently, the Company operates with little or no backlog. Net
revenues in any quarter are, therefore, substantially dependent on orders
booked and shipped in that quarter.
The Company's expenses are based in part on the Company's product
development and marketing budgets. Product development and marketing costs
generally are expensed as incurred, which is often long before a product ever
is released. In addition, a large portion of the Company's expenses are fixed.
As the Company increases its development and marketing activities, current
expenses will increase and, if sales from previously released products are
below expectations, net income is likely to be disproportionately affected.
Due to all of the foregoing, revenues and operating results for any future
quarter are not predictable with any significant degree of accuracy.
Accordingly, the Company believes that period-to-period comparisons of its
operating results are not necessarily meaningful and should not be relied
upon as indications of future performance.
The Company's business has experienced and is expected to continue to
experience significant seasonality, in part due to consumer buying patterns.
Net revenues and net income typically are significantly higher during the
fourth calendar quarter, due primarily to the increased demand for consumer
software during the year-end holiday buying season. Net revenues and net
income in other quarters are generally lower and vary significantly as a
result of new product introductions and other factors. For example, the
Company's net revenues in its last six quarters were $7.0 million for the
quarter ended June 30, 1996, $19.2 million for the quarter ended September
30, 1996, $31.4 million for the quarter ended December 31, 1996, $28.9
million for the quarter ended March 31, 1997, $8.1 million for the quarter
ended June 30, 1997 and $31.9 million for the quarter ended September 30,
1997. The Company's net income (loss) in its last six quarters were $(2.6
million) for the quarter ended June 30, 1996, $1.3 million for the quarter
ended September 30, 1996, $4.1 million for the quarter ended December 31,
1996, $4.3 million for the quarter ended March 31, 1997, $(5.5 million)
for the quarter ended June 30, 1997 and $2.1 million for the quarter ended
September 30, 1997. The Company expects its net revenues and operating
results to continue to reflect significant seasonality.</R.>
Dependence On New Product Development; Product Delays
The Company's future success depends on the timely introduction of
successful new products to replace declining revenues from older products. If,
for any reason, revenues from new products were to fail to replace declining
revenues from older products, the Company's business, operating results and
financial condition would be materially and adversely affected. In addition,
the Company believes that the competitive factors in the interactive
entertainment software marketplace create the need for higher quality,
distinctive products that incorporate increasingly sophisticated effects and
the need to support product releases with increased marketing, resulting in
higher development, acquisition and marketing costs. The lack of market
acceptance or significant delay in the introduction of, or the presence of a
defect in, one or more products could have a material adverse effect on the
Company's business, operating results and financial condition, particularly in
view of the seasonality of the Company's business. Further, because a large
portion of a product's revenue generally is associated with initial shipments,
the delay of a product introduction expected near the end of a fiscal quarter
may have a material adverse effect on operating results for that quarter.
The Company has, in the past, experienced significant delays in the
introduction of certain new products. The timing and success of interactive
entertainment products remain unpredictable due to the complexity of product
development, including the uncertainty associated with technological
developments. Although the Company has implemented substantial development
controls, there likely will be delays in developing and introducing new
products in the future. There can be no assurance that new products will be
introduced on schedule, or at all, or that they will achieve market acceptance
or generate significant revenues.
Reliance on Third Party Developers and Independent Contractors
The percentage of products published by the Company that are developed
by
independent third party developers has increased over the last several fiscal
years. From time to time, the Company also utilizes independent contractors
for certain aspects of internal product development and production. The
Company has less control over the scheduling and the quality of work by third
party developers and independent contractors than that of its own employees. A
delay in the work performed by third party developers and independent
contractors or poor quality of such work may result in product delays.
Although the Company intends to continue to rely in part on products that are
developed primarily by its own employees, the Company's ability to grow its
business and its future operating results will depend, in significant part, on
the Company's continued ability to maintain relationships with skilled third
party developers and independent contractors. There can be no assurance that
the Company will be able to maintain such relationships.
Uncertainty Of Market Acceptance; Short Product Life Cycles
The market for entertainment systems and software has been characterized
by shifts in consumer preferences and short product life cycles. Consumer
preferences for entertainment software products are difficult to predict and
few entertainment software products achieve sustained market acceptance. There
can be no assurance that new products introduced by the Company will achieve
any significant degree of market acceptance, that such acceptance will be
sustained for any significant period, or that product life cycles will be
sufficient to permit the Company to recoup development, marketing and other
associated costs. In addition, if market acceptance is not achieved, the
Company could be forced to accept substantial product returns to maintain its
relationships with retailers and its access to distribution channels. Failure
of new products to achieve or sustain market acceptance or product returns in
excess of the Company's expectations would have a material adverse effect on
the Company's business, operating results and financial condition.
Product Concentration; Dependence On Hit Products
A key aspect of the Company's strategy is to focus its development and
acquisition efforts on selected, high quality entertainment software products.
The Company derives a significant portion of its revenues from a relatively
small number of high quality entertainment software products released each
year, and many of these products have substantial production or acquisition
costs and marketing budgets. During fiscal 1996 and 1997, one title accounted
for approximately 49% and 23%, respectively, of the Company's consolidated net
revenues. In addition, during fiscal 1997, one other title accounted for
approximately 16% of the Company's consolidated net revenues. The Company
anticipates that a limited number of products will continue to produce a
disproportionate amount of revenues. Due to this dependence on a limited number
of products, the failure of one or more of the Company's principal new releases
to achieve anticipated results may have a material adverse effect on the
Company's business, operating results and financial condition.
The Company's strategy also includes as a key component developing and
releasing products that have franchise value, such that sequels, enhancements
and add-on products can be released over time, thereby extending the life of
the property in the market. While the focus on franchise properties, if
successful, results in extending product life cycles, it also results in the
Company depending on a limited number of titles for its revenues. There can be
no assurance that the Company's existing franchise titles can continue to be
exploited as successfully as in the past. In addition, new products that the
Company believes will have potential value as franchise properties may not
achieve market acceptance and therefore may not be a basis for future releases.
Industry Competition; Competition For Shelf Space
The interactive entertainment software industry is intensely competitive.
Competition in the industry is principally based on product quality and
features, the compatibility of products with popular platforms, company or
product line brand name recognition, access to distribution channels, marketing
effectiveness, reliability and ease of use, price and technical support.
Significant financial resources also have become a competitive factor in the
entertainment software industry, principally due to the substantial cost of
product development and marketing that is required to support best-selling
titles. In addition, competitors with broad product lines and popular titles
typically have greater leverage with distributors and other customers who may
be willing to promote titles with less consumer appeal in return for access to
such competitor's most popular titles.
The Company's competitors range from small companies with limited
resources to large companies with substantially greater financial, technical
and marketing resources than those of the Company. The Company's competitors
currently include Electronic Arts, Lucas Arts, Microsoft, Sega, Nintendo, Sony,
CUC, GT Interactive, Broderbund, Midway, Interplay, Virgin and Eidos, among
many others.
As competition increases, significant price competition, increased
production costs and reduced profit margins may result. Prolonged price
competition or reduced demand would have a material adverse effect on the
Company's business, operating results and financial condition. There can be no
assurance that the Company will be able to compete successfully against current
or future competitors or that competitive pressures faced by the Company will
not have a material adverse effect on its business, operating results and
financial condition.
Retailers typically have a limited amount of shelf space, and there is
intense competition among entertainment software producers for adequate levels
of shelf space and promotional support from retailers. As the number of
entertainment software products increase, the competition for shelf space has
intensified, resulting in greater leverage for retailers and distributors in
negotiating terms of sale, including price discounts and product return
policies. The Company's products constitute a relatively small percentage of a
retailer's sales volume, and there can be no assurance that retailers will
continue to purchase the Company's products or promote the Company's products
with adequate levels of shelf space and promotional support.
Dependence On Distributors; Risk Of Customer Business Failure; Product
Returns
Certain mass market retailers have established exclusive buying
relationships under which such retailers will buy consumer software only from
one intermediary. In such instances, the price or other terms on which the
Company sells to such retailers may be adversely affected by the terms imposed
by such intermediary, or the Company may be unable to sell to such retailers on
terms which the Company deems acceptable. The loss of, or significant
reduction in sales attributable to, any of the Company's principal distributors
or retailers could materially adversely affect the Company's business,
operating results and financial condition.
Distributors and retailers in the computer industry have from time to
time experienced significant fluctuations in their businesses and there have
been a number of business failures among these entities. The insolvency or
business failure of any significant distributor or retailer of the Company's
products could have a material adverse effect on the Company's business,
operating results and financial condition. Sales are typically made on credit,
with terms that vary depending upon the customer and the nature of the product.
The Company does not hold collateral to secure payment. Although the Company
has obtained insolvency risk insurance to protect against any bankruptcy,
insolvency or liquidation that occur to its customers, such insurance contains
a significant deductible as well as a co-payment obligation, and the policy
does not cover all instances of non-payment. In addition, the Company
maintains a reserve for uncollectible receivables that it believes to be
adequate, but the actual reserve that is maintained may not be sufficient in
every circumstance. As a result of the foregoing, a payment default by a
significant customer could have a material adverse effect on the Company's
business, operating results and financial condition.
The Company also is exposed to the risk of product returns from
distributors and retailers. Although the Company provides reserves for returns
that it believes are adequate, and although the Company's agreements with
certain of its customers place certain limits on product returns, the Company
could be forced to accept substantial product returns to maintain its
relationships with retailers and its access to distribution channels. Product
returns that exceed the Company's reserves could have a material adverse effect
on the Company's business, operating results and financial condition.
Changes In Technology And Industry Standards
The consumer software industry is undergoing rapid changes, including
evolving industry standards, frequent new platform introductions and changes in
consumer requirements and preferences. The introduction of new technologies,
including operating systems such as Microsoft's Windows 95, technologies that
support multi-player games, and new media formats such as on-line delivery and
digital video disks ("DVD"), could render the Company's previously released
products obsolete or unmarketable. The development cycle for products
utilizing new operating systems, microprocessors or formats may be
significantly longer than the Company's current development cycle for products
on existing operating systems, microprocessors and formats and may require the
Company to invest resources in products that may not become profitable. There
can be no assurance that the mix of the Company's future product offerings will
keep pace with technological changes or satisfy evolving consumer preferences,
or that the Company will be successful in developing and marketing products for
any future operating system or format. Failure to develop and introduce new
products and product enhancements in a timely fashion could result in
significant product returns and inventory obsolescence and could have a
material adverse effect on the Company's business, operating results and
financial condition.
Limited Protection Of Intellectual Property And Proprietary Rights; Risk Of
Litigation
The Company holds copyrights on its products, manuals, advertising and
other materials and maintains trademark rights in the Company name, the
Activision logo, and the names of products owned by the Company. The Company
regards its software as proprietary and relies primarily on a combination of
trademark, copyright and trade secret laws, employee and third-party
nondisclosure agreements, and other methods to protect its proprietary rights.
Unauthorized copying is common within the software industry, and if a
significant amount of unauthorized copying of the Company's products were to
occur, the Company's business, operating results and financial condition could
be adversely affected. There can be no assurance that third parties will not
assert infringement claims against the Company in the future with respect to
current or future products. As is common in the industry, from time to time
the Company receives notices from third parties claiming infringement of
intellectual property rights of such parties. The Company investigates these
claims and responds as it deems appropriate. Any claims or litigation, with or
without merit, could be costly and could result in a diversion of management's
attention, which could have a material adverse effect on the Company's
business, operating results and financial condition. Adverse determinations in
such claims or litigation could also have a material adverse effect on the
Company's business, operating results and financial condition.
Policing unauthorized use of the Company's products is difficult, and
while the Company is unable to determine the extent to which piracy of its
software products exists, software piracy can be expected to be a persistent
problem. In selling its products, the Company relies primarily on "shrink
wrap" licenses that are not signed by licensees and, therefore, may be
unenforceable under the laws of certain jurisdictions. Further, the Company
enters into transactions in countries where intellectual property laws are not
well developed or are poorly enforced. Legal protections of the Company's
rights may be ineffective in such countries.
Dependence On Key Personnel
The Company's success depends to a significant extent on the performance
and continued service of its senior management and certain key employees.
Competition for highly skilled employees with technical, management, marketing,
sales, product development and other specialized training is intense, and there
can be no assurance that the Company will be successful in attracting and
retaining such personnel. Specifically, the Company may experience increased
costs in order to attract and retain skilled employees. Although the Company
generally enters into term employment agreements with its skilled employees and
other key personnel, there can be no assurance that such employees will not
leave the Company or compete against the Company. The Company's failure to
attract or retain qualified employees could have a material adverse effect on
the Company's business, operating results and financial condition.
Risks Associated With International Operations
International sales and licensing accounted for 28%, 23% and 26% of
the Company's total revenues in the fiscal years 1995, 1996 and 1997,
respectively. The Company intends to continue to expand its direct and
indirect sales, marketing and localization activities worldwide. Such
expansion will require significant management time and attention and
financial resources in order to develop adequate international sales and
support channels. There can be no assurance, however, that the Company will
be able to maintain or increase international market demand for its products.
International sales are subject to inherent risks, including the impact of
possible recessionary environments in economies outside the United States,
the costs of transferring and localizing products for foreign markets, longer
receivable collection periods and greater difficulty in accounts receivable
collection, unexpected changes in regulatory requirements, difficulties and
costs of staffing and managing foreign operations, and political and economic
instability. There can be no assurance that the Company will be able to
sustain or increase international revenues or that the foregoing factors will
not have a material adverse effect on the Company's future international
revenues and, consequently, on the Company's business, operating results and
financial condition. The Company currently does not engage in currency
hedging activities. Although exposure to currency fluctuations to date has
been insignificant, there can be no assurance that fluctuations in currency
exchange rates in the future will not have a material adverse impact on
revenues from international sales and licensing and thus the Company's
business, operating results and financial condition.
Risk Of Software Defects
Software products such as those offered by the Company frequently contain
errors or defects. Despite extensive product testing, in the past the Company
has released products with defects and has discovered software errors in
certain of its product offerings after their introduction. In particular, the
PC hardware environment is characterized by a wide variety of non-standard
peripherals (such as sound cards and graphics cards) and configurations that
make pre-release testing for programming or compatibility errors very difficult
and time-consuming. There can be no assurance that, despite testing by the
Company, errors will not be found in new products or releases after
commencement of commercial shipments, resulting in a loss of or delay in market
acceptance, which could have a material adverse effect on the Company's
business, operating results and financial condition.
THE COMPANY
The Company's objective is to be a worldwide leader in the publishing
and development of exceptional and innovative interactive entertainment
software that appeals to existing and new audiences and incorporates
sophisticated graphics, sound and video, and compelling story lines and game
experiences. The Company's strategy includes the following elements:
Publish high quality titles. The Company seeks to differentiate its
titles through the highest quality production values, a superior gaming
experience and comprehensive marketing programs coordinated with product
releases. Accordingly, the Company intends to support the development,
production, acquisition and marketing of its titles with the resources
necessary to create best selling products. In order to reduce the financial
risks associated with the higher development and marketing budgets required
for this strategy, the Company pursues a balance between internally and
externally developed titles; between products based on proven technology and
newer technology; and between PC-CD and Playstation products.
Focus on franchise properties. The Company focuses its publishing
and development activities principally on titles that are, or have the
potential to become, franchise properties with sustainable consumer appeal
and brand recognition which can thereby serve as the basis for multiple
titles, sequels, mission packs and other add-ons and related new titles that
can be released over an extended period of time. The Company believes that
the publishing and distribution of products based in large part on franchise
properties will enhance revenue predictability. The Company currently is
publishing products based on several franchise properties, including Quake,
Hexen, Zork, Pitfall and Shanghai. The Company also has rights to several
other properties that it believes will have franchise value, including Heavy
Gear, Dark Reign, Battlezone, Heretic and Nightmare Creatures.
Expand direct distribution capabilities. In order to maximize the
revenues to be generated by each of its products, the Company intends to
continue expansion of its worldwide direct distribution capabilities. The
Company believes that worldwide direct distribution to retailers provides
significant competitive advantages, including the ability to compete more
effectively for shelf space, to create additional point-of-sale promotional
opportunities, to more properly manage inventory levels, and to increase
margins by eliminating third party distributors. In addition, dedicated
internal sales force allows the Company, in its opinion, to achieve broader
and more complete distribution of its products to available retail
outlets.
In North America, the Company's products are sold primarily on a direct
basis to major computer and software retailing organizations, consumer
electronic stores and discount warehouses. In international territories, the
Company's products are sold both direct to retail and through third party
licensing and distribution arrangements. The Company also generates
significant revenue throughout the world as a result of arrangements with
OEMs in which the Company's titles are sold together with hardware or
peripheral devices manufactured by the OEM. The Company believes that OEM
bundle arrangements expand the distribution of its titles to a broader and
more diverse audience, and it intends to continue aggressively pursuing these
arrangements.
Seek Strategic Acquisitions. In order to expand the Company's
library of titles, intellectual property rights and talent base, and to
enhance its direct distribution capabilities, the Company is actively
engaged in the exploration of acquisition opportunities in the software
development and direct distribution businesses. Consistent with this
strategy, in August 1997 the Company acquired Raven Software Corporation
("Raven"), an entertainment software developer based in Madison, Wisconsin,
that has created numerous best selling titles, including Heretic, Hexen:
Beyond Heretic and Hexen II. Additionally, in June 1997 the Company
acquired Take Us! Marketing & Consulting GmbH, a German company that
specializes in software marketing and product localization activities for
German-speaking territories. In addition, in order to create a closer
relationship with independent developers, the Company from time to time makes
investments and acquires minority equity interests in independent developers at
the same time as it acquires publishing rights to the developer's
products.
The Company is engaged in various stages of investigation or negotiations
with a number of prospective acquisition candidates, one or more of which would
constitute a material transaction. The Company intends to pursue vigorously
these and other potential transactions consistent with its strategies of
expanding international distribution and enhancing product development
capability.
The Company was incorporated in California in 1979 and was a pioneer in
the interactive entertainment software business. The Company achieved initial
success in the 1980s by developing and publishing video game products for the
Atari Corporation systems, one of the first consumer video game systems
introduced in the United States. The Company was restructured in 1991 under
new management. In 1992, the Company reincorporated in Delaware.
The Company's principal executive offices are located at 3100 Ocean Park
Blvd., Santa Monica, California 90405, and its telephone number is (310) 255-
2000. The Company also maintains offices in London, Tokyo and Sydney. The
Company's World Wide Web home page is located at http://www.activision.com.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Common Stock being offered hereby for the account of the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of Common Stock by the Selling Stockholders as of
September 23, 1997, and the number of shares of Common Stock being offered by
this Prospectus.
Beneficial Ownership of Common Stock Number of
Name and Prior to the Offering Shares of
Address of Selling Number of Percentage Common Stock
Stockholder Shares of Class Being Offered
- ------------------------- --------- ----------- -------------
Brian Raffel
Three Point Place,
Suite 1
Madison, Wisconsin 53719 503,218 3.2% 503,218(2)(3)
Steven Raffel
Three Point Place,
Suite 1
Madison, Wisconsin 53719 503,218 3.2% 503,218(2)(3)
Michael Crowns
Three Point Place,
Suite 1
Madison, Wisconsin 53719 33,564 (1) 33,564(2)
Stephen P. Hurley
c/o Hurley Burish &
Milliken, S.C.
301 North Broom Street
Madison, Wisconsin 53703 933 (1) 933
Mark D. Burish
c/o Hurley Burish &
Milliken, S.C.
301 North Broom Street
Madison, Wisconsin 53703 933 (1) 933
Kevin K. Milliken
c/o Hurley Burish &
Milliken, S.C.
301 North Broom Street
Madison, Wisconsin 53703 933 (1) 933
Daniel J. Schlichting
c/o Hurley Burish &
Milliken, S.C.
301 North Broom Street
Madison, Wisconsin 53703 201 (1) 201
Bruce Willis
c/o William Morris
Agency, Inc.
151 El Camino Drive
Beverly Hills,
California 90212 84,870 (1) 28,483
William Morris Agency, Inc.
151 El Camino Drive
Beverly Hills,
California 90212 9,430 (1) 3,165
All Selling Stockholders
as a group 1,137,300 7.3% 1,074,648
____________________
(1) Less than 1%.
(2) Pursuant to the Raven Merger Agreement (as defined below), such Selling
Stockholder has agreed not to sell, pledge, gift, hypothecate or otherwise
dispose of shares of Common Stock until the issuance by the Company of its
first earnings press release including thirty (30) days of post-merger
combined operations of the Company and Raven.
(3) In order to insure that the representations, warranties and covenants made
under the Raven Merger Agreement are not breached, and in order to provide
a source of indemnification of the Company pursuant to the Raven Merger
Agreement, such Selling Stockholder deposited 37,741 shares of Common
Stock in an escrow account pursuant to a warranty escrow agreement until
the earlier of (1) the date of the first audit of the combined
enterprises' financial statements is completed, (2) August 26, 1998 or (3)
the date set forth in a written direction executed by the Company and
Brian Raffel and Steven Raffel.
The Company has entered into an agreement and plan of reorganization (the
"Raven Merger Agreement") with Raven Software Corporation of which Brian and
Steven Raffel and Michael Crowns were the sole shareholders, and has entered
into a license and personal services agreement with Bruce Willis. Other than
such contracts, none of the Selling Stockholders has had a material
relationship with the Company within the past three years.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 55,000,000 shares
of capital stock, $.000001 par value, consisting of 50,000,000 shares of Common
Stock and 5,000,000 shares of preferred stock. As of September 23, 1997,
approximately 15,548,082 shares of Common Stock were outstanding. The Common
Stock is listed on the NASDAQ National Market System under the symbol "ATVI."
Each outstanding share of Common Stock entitles the holder to one vote on
all matters submitted to a vote of stockholders, including the election of
directors. There is no cumulative voting in the election of directors, which
means that the holders of a majority of the outstanding shares of Common Stock
can elect all of the directors then standing for election. Subject to
preferences which may be applicable to any outstanding shares of preferred
stock, holders of Common Stock are entitled to such distributions as may be
declared from time to time by directors of the Company out of funds legally
available therefor. The Company has not paid, and has no current plans to pay,
dividends on its Common Stock. The Company intends to retain all earnings for
use in its business.
Holders of Common Stock have no conversion, redemption or preemptive
rights to subscribe to any securities of the Company. All outstanding shares
of Common Stock are fully paid and nonassessable. In the event of any
liquidation, dissolution or winding-up of the affairs of the Company, holders
of Common Stock will be entitled to share ratably in the assets of the Company
remaining after provision for payment of liabilities to creditors and
preferences applicable to outstanding shares of preferred stock.
The rights, preferences and privileges of holders of Common Stock are
subject to the rights of the holders of any outstanding shares of preferred
stock. At present, no shares of preferred stock are outstanding. As of March
31, 1997, the Company had approximately 5,000 stockholders of record, excluding
banks, brokers and depository companies that are stockholders of record for the
account of beneficial owners.
The transfer agent for the Common Stock of the Company is Continental
Stock Transfer & Trust Company, 2 Broadway, New York, New York 10004.
PLAN OF DISTRIBUTION
The Common Stock may be sold from time to time by the Selling
Stockholders, or by pledgees, donees, transferees or other successors in
interest. Such sales may be made on one or more exchanges or in the
over-the-counter market, or otherwise, at prices and at terms then prevailing
or at prices related to the then current market price, or in negotiated
transactions. The shares may be sold by one or more of the following, without
limitation: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction, (b) purchases by a broker
or dealer as principal and resale by such broker or dealer or for its account
pursuant to the Prospectus, as supplemented, (c) an exchange distribution in
accordance with the rules of such exchange, and (d) ordinary brokerage
transactions and transactions in which the broker solicits purchasers. In
addition, any securities covered by this Prospectus which qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this
Prospectus, as supplemented. From time to time the Selling Stockholders may
engage in short sales, short sales against the box, puts and calls and other
transactions in securities of the Company or derivatives thereof, and may sell
and deliver the shares in connection therewith.
From time to time Selling Stockholders may pledge their shares pursuant to
the margin provisions of their respective customer agreements with their
respective brokers. Upon a default by a Selling Stockholder, the broker may
offer and sell the pledged shares of Common Stock from time to time as
described above.
All expenses of registration of the Common Stock (other than commissions
and discounts of underwriters, dealers or agents), estimated to be
approximately $17,405, shall be borne by the Company. As and when the Company
is required to update this Prospectus, it may incur additional expenses in
excess of this estimated amount.
LEGAL MATTERS
Certain legal matters in connection with the shares of Common Stock
offered hereby will be passed upon for the Company by Robinson Silverman Pearce
Aronsohn & Berman LLP, 1290 Avenue of the Americas, New York, New York 10104.
EXPERTS
The consolidated financial statements and financial statement schedule of
the Company and its subsidiaries as of March 31, 1996 and for the years ended
March 31, 1996 and 1995 incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1997
have been audited by Coopers & Lybrand LLP, independent accountants, 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.
The consolidated financial statements and financial statement schedule of
the Company and its subsidiaries as of March 31, 1997 and for the year ended
March 31, 1997 have been incorporated by reference herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). Such reports, proxy statements
and other information can be inspected and copied at the public reference
facilities maintained by the SEC at its offices at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of
the SEC located at Seven World Trade Center, New York, New York 10048 and at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such materials can be obtained by mail from the
Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates, and can also be obtained
electronically through the SEC's Electronic Data Gathering, Analysis and
Retrieval system at the SEC's Web site (http://www.sec.gov). The Company's
Common Stock is listed on the Nasdaq National Market and copies of such reports
and other information can also be inspected at the offices of the Nasdaq
National Market, 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the SEC a registration statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated thereunder, with
respect to the Common Stock offered hereby. This Prospectus, which constitutes
a part of the Registration Statement, does not contain all of the information
set forth in the Registration Statement and the exhibits and schedules thereto,
as permitted by the rules and regulations of the SEC. For further information
with respect to the Company and the Common Stock offered hereby, reference is
made to the Registration Statement, including the exhibits thereto and the
financial statements, notes and schedules filed as a part thereof, which may be
inspected and copied at the public reference facilities of the SEC referred to
above. Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete, and in each instance
reference is made to the full text of such contract or document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference.
The Company furnishes stockholders with annual reports containing audited
financial statements and with proxy material for its annual meetings complying
with the proxy requirements of the Exchange Act.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents which have been filed by the Company with the SEC
are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended March 31,
1997, which contains audited consolidated balance sheets of the Company and
subsidiaries as of March 31, 1997 and 1996, and related consolidated statements
of income, shareholders equity and cash flows for the years ended March 31,
1997, 1996 and 1995.
2. The Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1997.
3. All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since March 31, 1997.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in and to be a part of
this Prospectus from the date of filing of such reports and documents.
Any statement contained herein or in a document which is incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement in any subsequently filed
document that is also deemed to be incorporated by reference herein modifies or
supersedes such prior statement.
This Prospectus incorporates documents by reference which are not
presented or delivered herewith. These documents are available upon written or
oral request from the Company, without charge, to each person to whom a copy of
this Prospectus has been delivered, other than exhibits to those documents.
Requests should be directed to the Office of the Secretary, Activision, Inc.,
3100 Ocean Park Boulevard, Santa Monica, California 90405 (telephone (310) 255-
2000).
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
===============================================================================
No dealer, salesman or other person has been authorized to give any
information or to make representations other than those contained in this
Prospectus, and if given or made, such information or representations must not
be relied upon as having been authorized by the Company or the Selling
Stockholders. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that the
information herein is correct as of any time subsequent to its date. This
Prospectus does not constitute an offer of solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer of solicitation is not qualified to do so or to
anyone to whom it is unlawful to make such offer or solicitation.
____________________
TABLE OF CONTENTS
Page
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Selling Stockholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Description of Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . .11
Plan of Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Documents Incorporated by Reference . . . . . . . . . . . . . . . . . . . . .14
____________________
===============================================================================
===============================================================================
1,074,648 Shares
ACTIVISION, INC.
Common Stock
____________________
PROSPECTUS
____________________
October 29, 1997
===============================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table itemizes the expenses incurred by the Company in
connection with the offering of the Common Stock being registered. All the
amounts shown are estimates except the Securities and Exchange Commission (the
"Commission") registration fee.
Item Amount
---- ------
Registration Fee - Securities and Exchange Commission . . . . . .$ 4,905
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 5,000
Accounting Fees and Expenses. . . . . . . . . . . . . . . . . . . 7,500
---------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . .$ 17,405
=========
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("DGCL"), paragraph B
of Article SIXTH of the Company's Amended and Restated Certificate of
Incorporation and paragraph 5 of Article VII of the Company's By-laws provide
for the indemnification of the Company's directors and officers in a variety of
circumstances, which may include liabilities under the Securities Act of 1933,
as amended (the "Securities Act").
Paragraph B of Article SIXTH of the Amended and Restated Certificate of
Incorporation provides mandatory indemnification rights to any officer or
director of the Company who, by reason of the fact that he or she is an officer
or director of the Company, is involved in a legal proceeding of any nature.
Such indemnification rights shall include reimbursement for expenses incurred
by such officer or director in advance of the final disposition of such
proceeding in accordance with the applicable provisions of the DGCL. Paragraph
5 of Article VII of the Company's By-laws currently provide that the Company
shall indemnify its directors and officers to the fullest extent permitted by
the DGCL.
Paragraph A of Article SIXTH of the Amended and Restated Certificate of
Incorporation contains a provision which eliminates the personal liability of a
director to the Company and its stockholders for certain breaches of his or her
fiduciary duty of care as a director. This provision does not, however,
eliminate or limit the personal liability of a director (i) for any breach of
such director's duty of loyalty to the Company or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under the Delaware statutory provision making
directors personally liable, under a negligence standard, for unlawful
dividends or unlawful stock repurchases or redemptions, or (iv) for any
transaction from which the director derived an improper personal benefit. This
provision offers persons who serve on the Board of Directors of the Company
protection against awards of monetary damages resulting from negligent (except
as indicated above) and "grossly" negligent actions taken in the performance of
their duty of care, including grossly negligent business decisions made in
connection with takeover proposals for the Company. As a result of this
provision, the ability of the Company or a stockholder thereof to successfully
prosecute an action against a director for a breach of his duty of care has
been limited. However, the provision does not affect the availability of
equitable remedies such as an injunction or rescission based upon a director's
breach of his duty of care.
It is currently unclear as a matter of law what impact these provisions
will have regarding securities law violations. The Commission takes the
position that indemnification of directors, officers and controlling persons
against liabilities arising under the Securities Act is against public policy
as expressed in the Securities Act and therefore is unenforceable.
Item 16. Exhibits
(a) Exhibits:
* 5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP as to
legality of securities being registered.
* 23.1 Consent of Robinson Silverman Pearce Aronsohn & Berman LLP (included
as part of Exhibit 5.1).
* 23.2 Consent of Coopers & Lybrand LLP.
* 23.3 Consent of KPMG Peat Marwick LLP.
* 24.1 Power of attorney (included on signature page).
______________
* Filed previously.
Item 17. Undertakings
The Company hereby undertakes:
(1) 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 the 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;
(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;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Company pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), that are incorporated by reference in
the registration statement.
(2) 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.
(3) 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.
The Company hereby further undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement 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.
The Company hereby further undertakes to deliver or cause to be delivered
with the Prospectus, to each person to whom the Prospectus is sent or given,
the latest annual report to security holders that is incorporated by reference
in the Prospectus and furnished pursuant to and meeting the requirements of
Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the Prospectus, to deliver, or cause to be delivered to each person to
whom the Prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the Prospectus to provide such
interim financial information.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Commission 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 the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Company 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 and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Los Angeles, State of California, on October 28,
1997.
ACTIVISION, INC.
By: /s/ Brian G. Kelly
------------------------------
Brian G. Kelly, President and
Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Name Title Date
---- ----- ----
*/s/ Robert A. Kotick Chairman, Chief Executive October 28, 1997
- ----------------------- Officer (Principal
(Robert A. Kotick) Executive Officer)
and Director
/s/ Brian G. Kelly Chief Operating Officer, October 28, 1997
- ----------------------- President and Director
(Brian G. Kelly)
*/s/ Barry J. Plaga Chief Financial Officer October 28, 1997
- ----------------------- (Principal Financial and
(Barry J. Plaga) Accounting Officer)
*/s/ Harold A. Brown Director October 28, 1997
- -----------------------
(Harold A. Brown)
*/s/ Barbara S. Isgur Director October 28, 1997
- -----------------------
(Barbara S. Isgur)
*/s/ Steven T. Mayer Director October 28, 1997
- -----------------------
(Steven T. Mayer)
*/s/ Robert J. Morgado Director October 28, 1997
- -----------------------
(Robert J. Morgado)
*By: /s/ Brian G. Kelly October 28, 1997
- -----------------------
(Brian G. Kelly)
(Attorney-in-fact)
EXHIBIT INDEX
Page Number in Signed
Exhibit No. Description Registration Statement
----------- ----------- ----------------------
* 5.1 Opinion of Robinson Silverman
Pearce Aronsohn & Berman
LLP as to legality of securities
being registered.
* 23.1 Consent of Robinson Silverman
Pearce Aronsohn & Berman
LLP (included as part of
Exhibit 5.1).
* 23.2 Consent of Coopers & Lybrand LLP
* 23.3 Consent of KPMG Peat Marwick LLP
* 24.1 Power of attorney (included on
signature page).
_______________
* Filed Previously.