As Filed with the Securities and Exchange Commission on May 8, 2002
Registration No. 333-59088
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
Amendment No. 4 to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------
INTERPLAY ENTERTAINMENT CORP.
(Exact name of registrant as specified in its charter)
Delaware 33-0102707
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
16815 Von Karman Avenue, Irvine, California 92606
(949) 553-6655
(Address, including zip code, and telephone number, including area code of
registrant's principal executive offices)
----------
Herve Caen
Interplay Entertainment Corp.
16815 Von Karman Avenue
Irvine, California 92606
(949) 553-6655
(Name, address, including zip code, and telephone number,
including area code of agent for service)
Copy to:
Murray Markiles, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
2029 Century Park East, 24th Floor
Los Angeles, CA 90067
(310) 728-3233
Approximate date of commencement of proposed sale to 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 securities Amount to Proposed maximum Proposed maximum Amount of
to be registered be registered offering price aggregate offering registration
per share price fee
- ------------------------- -------------- ----------------- ------------------- ------------
Common Stock, $0.001 par 4,557,250 $1.33 (2) $ 6,061,143 $1,516
value
- ------------------------- -------------- ----------------- ------------------- ------------
Common Stock, $0.001 par
value, issuable upon 7,957,250(1) $1.33 (2) $ 10,583,143 $2,646
exercise of Warrants
- ------------------------- -------------- ----------------- ------------------- ------------
Common Stock, $0.001 par
value, issuable upon 500,000(1) $0.54 (3) $ 270,000 $68
exercise of Warrants
- ------------------------- -------------- ----------------- ------------------- ------------
Total 13,014,500 $ 16,914,286 $4,230(4)
- ------------------------- -------------- ----------------- ------------------- ------------
<FN>
(1) In accordance with Rule 416 under the Securities Act, the number of
shares of Common Stock registered shall automatically increase to cover
additional shares of Common Stock that may become issuable pursuant to
the anti-dilution adjustment provisions of the warrants.
(2) The offering price is estimated solely for the purpose of calculating
the registration fee in accordance with Rule 457(c) using the average of
the high and low prices reported by the Nasdaq National Market for the
Common Stock on April 11, 2001, which was approximately $1.33 per share.
(3) The offering price is estimated solely for the purpose of calculating
the registration fee in accordance with Rule 457(c) using the average of
the high and low prices reported by the Nasdaq National Market for the
Common Stock on September 5, 2001, which was approximately $0.54 per
share.
(4) A registration fee of $5,472 has been paid previously.
</FN>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE TIME 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.
Page 2
SUBJECT TO COMPLETION - MAY 8, 2002
PROSPECTUS
INTERPLAY ENTERTAINMENT CORP.
13,014,500 Shares of Common Stock
($0.001 par value)
---------
This prospectus relates to the offer and sale from time to time of up to
13,014,500 shares of our Common Stock that are held by the stockholders named in
the "Selling Stockholders" section of this prospectus. The shares of our Common
Stock offered pursuant to this prospectus were originally issued to the selling
stockholders in connection with private placements of our shares and pursuant to
the exercise of common stock purchase warrants issued to the selling
stockholders in connection with such private placements. See the Form of Warrant
filed as Exhibit 4.2 to the registration statement of which this prospectus is a
part for more information about the warrants. See also the Form of Warrant for
Roth Capital Partners, filed as Exhibit 4.4 to the registration statement of
which this prospectus is a part.
The prices at which such stockholders may sell the shares in this
offering will be determined by the prevailing market price for the shares or in
negotiated transactions. We will not receive any of the proceeds from the sale
of the shares. We will bear all expenses of registration incurred in connection
with this offering. The stockholders whose shares are being registered will bear
all selling and other expenses.
Concurrent with the filing of the registration statement of which this
prospectus is a part, we have filed Amendment No. 4 to our registration
statement on Form S-3 (File No. 333-60272) relating to the offer and sale of up
to 28,715,970 shares of our Common Stock. We currently have an effective
registration statement on Form S-3 (File No. 333-50252) relating to the offer
and sale of up to 11,256,511 shares of our Common Stock. The aggregate number of
shares being offered, assuming the effectiveness of each of our registration
statements, is 52,986,981. The completion of this offering and the concurrent
offerings do not depend on each other.
Our Common Stock is traded on the Nasdaq National Market under the
symbol "IPLY." On May 1, 2002, the last reported sale price of our Common Stock
was $0.32 per share.
See "Risk Factors" beginning on page 4 to read about the risks you
should consider carefully before buying shares of our Common Stock.
---------
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.
---------
The date of this Prospectus is May 8, 2002.
TABLE OF CONTENTS
Page
ABOUT INTERPLAY...............................................................2
RECENT DEVELOPMENTS...........................................................3
RISK FACTORS..................................................................5
WHERE YOU CAN FIND ADDITIONAL INFORMATION....................................19
USE OF PROCEEDS..............................................................20
SELLING STOCKHOLDERS.........................................................20
PLAN OF DISTRIBUTION.........................................................24
LEGAL MATTERS................................................................25
EXPERTS......................................................................25
SOME OF THE STATEMENTS CONTAINED IN THIS PROSPECTUS DISCUSS FUTURE EXPECTATIONS,
CONTAIN PROJECTIONS OF RESULTS OF OPERATIONS OR FINANCIAL CONDITION OR STATE
OTHER "FORWARD-LOOKING" INFORMATION. SUCH STATEMENTS CAN BE IDENTIFIED BY THE
USE OF "FORWARD-LOOKING" TERMINOLOGY, SUCH AS "MAY," "WILL," "EXPECT,"
"ANTICIPATE," "ESTIMATE," "CONTINUE" OR OTHER SIMILAR WORDS. THESE STATEMENTS
ARE SUBJECT TO KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES AND OTHER FACTORS THAT
COULD CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY
THE STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT
LIMITED TO, THOSE DISCUSSED IN "RISK FACTORS" ON PAGE 4.
ABOUT INTERPLAY
Interplay Entertainment Corp. is a leading developer and publisher of
interactive entertainment software for both core gamers and the mass market. We
were incorporated in the State of California in 1982 and were reincorporated in
the State of Delaware in May 1998. We are most widely known for our titles in
the action/arcade, adventure/role playing game (RPG), and strategy/puzzle
categories. We have produced titles for many of the most popular interactive
entertainment software platforms, and currently balance our publishing and
distribution business by developing interactive entertainment software for PCs
and next generation video game consoles, such as the Sony PlayStation 2,
Microsoft Xbox and Nintendo GameCube. We seek to publish interactive
entertainment software titles that are, or have the potential to become,
franchise software titles that can be leveraged across several releases and/or
platforms, and have published many such successful franchise titles to date. In
addition, we hold licenses to use popular brands, such as Advanced Dungeons and
Dragons, Star Trek and Caesars Palace, for incorporation into certain of our
products. Our executive offices are located at 16815 Von Karman Avenue, Irvine,
California 92606, and our telephone number is (949) 553-6655.
Page 2
RECENT DEVELOPMENTS
RECENT DEVELOPMENTS IN OUR BUSINESS
SALE OF SHINY ENTERTAINMENT, INC. AND RELATED MATTERS
On April 30, 2002, we consummated the sale of our majority owned
subsidiary, Shiny Entertainment, Inc. to Infogrames, Inc. pursuant to the terms
of a Stock Purchase Agreement, dated April 23, 2002, as amended, among
Interplay, Infogrames, Shiny, David Perry and Shiny Group, Inc. Pursuant to the
Purchase Agreement, Infogrames acquired all of the outstanding common stock of
Shiny for approximately $47.2 million, which was paid to or for the benefit of
Interplay as follows:
o $2,983,561 in cash paid to us at closing;
o $10,809,076 paid to us pursuant to a promissory note of Infogrames
providing for scheduled payments with the final payment due July 31,
2002;
o $26,145,925 paid directly to certain of our third party creditors;
and
o $7,250,000 was paid to David Perry and Shiny Group, Inc. for their
common stock of Shiny that was issued to such parties to settle
claims relating to our original acquisition of Shiny.
Concurrently with the closing of the sale of Shiny, we settled our legal
dispute with Vivendi Universal Games, Inc., the distributor of our video games
in North America and certain other territories, relating to the parties'
distribution agreement. We also settled our legal disputes with LaSalle Business
Credit, Inc., our former bank, and Brian Fargo, our founder and former Chief
Executive Officer, relating to our April 2001 credit facility with LaSalle that
was partially guaranteed by Mr. Fargo. The disputes with Vivendi, LaSalle and
Mr. Fargo were dismissed, with prejudice, following consummation of the sale of
Shiny.
Additionally, in connection with the sale of Shiny, we issued to Warner
Bros., a division of Time Warner Entertainment Company, L.P., a Secured
Convertible Promissory Note, due April 30, 2003, in the principal amount of
$2,000,000. The note was issued in partial payment of amounts due Warner Bros.
under the parties' license agreement for the video game based on the motion
picture THE MATRIX, which is being developed by Shiny. The note is secured by
all of our assets, and may be converted by the holder thereof into shares of our
common stock on the maturity date or, to the extent there is any proposed
prepayment, within the 30 day period prior to such prepayment. The conversion
price is equal to the lower of (a) $0.304 and (b) an amount equal to the average
closing price of a share of our common stock for the five business days ending
on the day prior to the conversion date. We agreed to register with the
Securities and Exchange Commission the resale by the note holder of shares of
common stock issued upon conversion of the note.
Page 3
SETTLEMENT WITH BIOWARE CORP.
On January 24, 2001, Interplay and BioWare Corp. reached a settlement
ending the dispute between the two companies. Pursuant to the agreement,
Neverwinter NightsTM, developed by BioWare, will be published worldwide by
Infogrames, Inc. subject to certain of our pre-existing licenses.
RECENT DEVELOPMENTS IN OUR RELATIONSHIP WITH TITUS
Our largest stockholder, Titus Interactive, S.A., recently gained a
majority of our stockholders' voting power, providing Titus with the ability to
control the outcome of votes on proposals presented to our stockholders, as well
as the ability to elect a majority of our directors. The events relating to
Titus' gaining of majority voting power are as follows:
On September 5, 2001, we entered into a Support Agreement with Titus
providing for the nomination to our Board of Directors of a slate of six
individuals mutually acceptable to Titus and us for election as directors at our
2001 annual meeting of stockholders, and designating Nathan Peck as our Chief
Administrative Officer. Also on September 5, 2001, as part of the Support
Agreement, three of our existing directors resigned and three new directors
acceptable to Titus were appointed by the remaining directors to fill the three
vacancies. As a consequence, from September 6, 2001 until the 2001 annual
meeting, the Board of Directors consisted of five individuals nominated by
Titus, and two directors previously nominated by management.
On September 13, 2001, our Board of Directors established an Executive
Committee, consisting of Herve Caen, our President, and Nathan Peck, to
administer and oversee all aspects of our day-to-day operations, including,
without limitation, (a) our relationship with lenders, including LaSalle
Business Credit, Inc.; (b) relations with Europlay 1, LLC, consultants retained
to effect our restructuring; (c) capital raising efforts; (d) our relationships
with vendors and licensors; (e) management of employment of officers and
employees; (f) retaining and managing outside professionals and consultants; and
(g) directing our management.
Our 2001 annual meeting was held on September 18, 2001. At the annual
meeting, the five Titus nominees and Brian Fargo, one of the directors
previously nominated by management, were elected to continue to serve as
directors. Mr. Fargo subsequently resigned from the Board and from all other
positions with the Company in January 2002.
The execution of the Support Agreement and the election to the Board of
Directors of individuals designated by Titus were the culmination of our
extensive negotiations with Titus that began in April 2001, following
termination of our stockholder agreement with Titus. Upon termination of the
stockholder agreement, Titus was no longer subject to restrictions on its
ability to vote its shares of our securities, including in connection with the
election of directors to our Board of Directors.
On May 15, 2001, we entered into an agreement with Titus, Herve Caen,
our President and an officer and director of Titus, and Brian Fargo, our Chief
Executive Officer, to govern our conduct pending the election of successors to
the members of our Board of Directors. In the May 15, 2001 agreement, we agreed,
among other things, to fix June 19, 2001 as the record date for our 2001 annual
meeting of stockholders and to hold the 2001 annual meeting no later than August
15, 2001. Herve Caen agreed not to call a special meeting of our stockholders
for the purpose of electing directors before June 1, 2001.
Page 4
On July 2, 2001, pursuant to our Amended and Restated Bylaws, Titus
nominated four individuals for election to our Board of Directors at the 2001
annual meeting. On July 16, 2001, Titus nominated a fifth individual for
election to the Board of Directors.
On July 13, 2001, Titus commenced litigation in the Delaware Court of
Chancery seeking an order to require the Company to hold the 2001 annual meeting
as called for by our May 15, 2001 agreement. As a consequence of this action, we
entered into a Stipulation and Order with the court and Titus where we agreed,
among other things, to set August 13, 2001 as the record date for the meeting,
to deliver notice of the meeting to our stockholders on or before August 21,
2001, and to hold the meeting on September 18, 2001. On August 20, 2001, the
Stipulation and Order was amended to allow us to deliver notice of the meeting
by August 24, 2001.
On August 13, 2001, Titus converted 336,070 of its shares of our Series
A Preferred Stock into 6,679,306 shares of our Common Stock. Prior to the
conversion, Titus owned 719,424 shares of Series A Preferred Stock. As of the
close of business on August 13, 2001, the record date of our 2001 annual meeting
of stockholders, Titus held securities representing 51.5% of our outstanding
voting stock. As a consequence, Titus had the ability to elect at least a
majority of the directors of our Board of Directors at the 2001 annual meeting.
On March 15, 2002, Titus converted its remaining 383,354 shares of Series A
Preferred Stock into approximately 47.5 million shares of our common stock.
Titus now owns approximately 67 million shares of common stock, which represents
approximately 72 percent of our outstanding common stock immediately following
the conversion.
We entered into the Support Agreement with Titus because of the
inevitable change in the composition of the Board of Directors that would occur
at the 2001 annual meeting, and to assist in the transition of representation on
the Board in a manner that was in the best interests of the Company and its
stockholders.
We anticipate that the election of a new Board of Directors will result
in changes in internal management policies and further changes to management as
the Board continues to evaluate the performance of existing personnel and
performs a thorough review of company operations. These changes could, in the
short term, result in discontinuities in our business as our new management
policies are implemented and new personnel are integrated into our operations.
RISK FACTORS
Our future operating results depend upon many factors and are subject to
various risks and uncertainties. Some of the risks and uncertainties which may
cause our operating results to vary from anticipated results or which may
materially and adversely affect our operating results are as follows:
WE CURRENTLY HAVE A NUMBER OF OBLIGATIONS THAT WE ARE UNABLE TO MEET WITHOUT
GENERATING ADDITIONAL REVENUES OR RAISING ADDITIONAL CAPITAL. IF WE CANNOT
GENERATE ADDITIONAL REVENUES OR RAISE ADDITIONAL CAPITAL IN THE NEAR FUTURE, WE
MAY BECOME INSOLVENT AND OUR STOCK WOULD BECOME ILLIQUID OR WORTHLESS.
As of December 31, 2001, our cash balance was approximately $119,000 and
our outstanding accounts payable and current debt totaled approximately $59.3
million. If we do not receive sufficient financing we may (i) liquidate assets,
(ii) seek or be forced into bankruptcy and/or (iii) continue operations, but
incur material harm to our business, operations or financial condition.
Page 5
These measures could have a material adverse effect on our ability to continue
as a going concern. Additionally, because of our financial condition, our Board
of Directors has a duty to our creditors that may conflict with the interests of
our stockholders. When a Delaware corporation is operating in the vicinity of
insolvency, the Delaware courts have imposed upon the corporation's directors a
fiduciary duty to the corporation's creditors. If we cannot obtain additional
capital and become unable to pay our debts as they become due, our Board of
Directors may be required to make decisions that favor the interests of
creditors at the expense of our stockholders to fulfill its fiduciary duty. For
instance, we may be required to preserve our assets to maximize the repayment of
debts versus employing the assets to further grow our business and increase
shareholder value.
WE HAVE A HISTORY OF LOSSES, MAY NEVER GENERATE POSITIVE CASH FLOW FROM
OPERATIONS AND MAY HAVE TO FURTHER REDUCE OUR COSTS BY CURTAILING FUTURE
OPERATIONS.
For the year ended December 31, 2001, our net loss was $46.3 million.
Since inception, we have incurred significant losses and negative cash flow, and
as of December 31, 2001 we had an accumulated deficit of $151 million. We cannot
assure you that we will ever generate positive cash flow from operations. Our
ability to fund our capital requirements out of our available cash and cash
generated from our operations depends on a number of factors. Some of these
factors include the progress of our product development programs, the rate of
growth of our business, and our products' commercial success. If we cannot
generate positive cash flow from operations, we will have to continue to reduce
our costs and raise working capital from other sources. These measures could
include selling or consolidating certain operations, and delaying, canceling or
scaling back product development and marketing programs. These measures could
materially and adversely affect our ability to publish successful titles, and
may not be enough to permit us to operate profitability, or at all.
WE DEPEND, IN PART, ON EXTERNAL FINANCING TO FUND OUR CAPITAL NEEDS. IF WE ARE
UNABLE TO OBTAIN SUFFICIENT FINANCING ON FAVORABLE TERMS, WE MAY NOT BE ABLE TO
CONTINUE TO OPERATE OUR BUSINESS.
Historically, our business has not generated revenues sufficient to
create operating profits. To supplement our revenues, we have funded our capital
requirements with debt and equity financing. Our ability to obtain additional
equity or debt financing depends on a number of factors including our financial
performance, the overall conditions in our industry, and our credit rating. If
we cannot raise additional capital on favorable terms, we will have to reduce
our costs and sell or consolidate operations.
OUR STOCK PRICE MAY DECLINE SIGNIFICANTLY IF WE ARE DELISTED FROM THE NASDAQ
NATIONAL MARKET.
Our common stock currently is quoted on the Nasdaq National Market
System. On February 14, 2002, we received a deficiency notice from Nasdaq
stating that for the last 30 consecutive trading days, our common stock has not
maintained a minimum market value of publicly held shares of $15,000,000 and a
minimum bid price per share of $3.00, as required for continued listing on the
Nasdaq National Market. Additionally, we do not meet Nasdaq's alternative
listing requirements, which require, among other things, that we have a
stockholder's equity of $10 million, a minimum market value of publicly held
shares of $5,000,000 and a minimum bid price per share of $1.00. We have been
provided 90 calendar days, or until May 15, 2002, to regain compliance, which we
do not believe will occur.
Page 6
If we fail to regain compliance, the Company expects to be notified by
Nasdaq that its securities will be delisted. If this occurs, trading of our
common stock may be conducted on the Nasdaq SmallCap Market, if we qualify for
listing at that time, in the over-the-counter market on the "pink sheets" or, if
available, the NASD's "Electronic Bulletin Board." In any of those cases,
investors could find it more difficult to buy or sell, or to obtain accurate
quotations as to the value of our common stock. The trading price per share of
our common stock likely would be reduced as a result.
TITUS INTERACTIVE, SA CONVERTED ITS REMAINING SERIES A PREFERRED SHARES INTO A
SIGNIFICANT NUMBER OF SHARES OF OUR COMMON STOCK, WHICH COULD INCREASE OUR RISK
OF BEING DELISTED FROM THE NASDAQ NATIONAL MARKET.
On March 15, 2002, Titus converted its remaining shares of Series A
Preferred Stock into shares of our common stock. The variable conversion price
of the Series A Preferred Stock resulted in a significant number of shares of
our common stock being issued to Titus at a discount to the then prevailing
market price of our common stock. Such conversion increases our risk of being
delisted from the Nasdaq National Market in several ways:
o Thesubstantial number of shares issued upon conversion of the Series A
Preferred Stock and the short selling that may occur as a result of
the future priced nature of those shares increases the risk that our
stock price will stay below Nasdaq's minimum bid price requirement.
o If the returns on the Series A Preferred Stock are deemed "excessive"
compared with those of public investors in our common stock, Nasdaq
may deny inclusion or apply more stringent criteria to the continued
listing of our common stock.
o If Nasdaq determines that the issuance of common stock to Titus upon
the conversion constituted a change in control of the company or a
change in its financial structure, we will need to satisfy all initial
listing requirements as of that time, which currently we are unable to
do.
TITUS INTERACTIVE SA CONTROLS A MAJORITY OF OUR VOTING STOCK AND CAN ELECT A
MAJORITY OF OUR BOARD OF DIRECTORS AND PREVENT AN ACQUISITION OF INTERPLAY THAT
IS FAVORABLE TO OUR OTHER STOCKHOLDERS.
On March 15, 2002, Titus converted its remaining 383,354 shares of
Series A Preferred Stock into approximately 47.5 million shares of our common
stock. Titus now owns approximately 67 million shares of common stock, which
represents approximately 72 percent of our outstanding common stock, our only
voting security, immediately following the conversion. As a consequence, Titus
can control substantially all matters requiring stockholder approval, including
the election of directors, subject to our stockholders' cumulative voting
rights, and the approval of mergers or other business combination transactions.
At our 2001 annual stockholders meeting on September 18, 2001, Titus exercised
its voting power to elect a majority of our Board of Directors. Three of the
seven members of the Board are employees or directors of Titus, and Titus' Chief
Executive Officer serves as our President and interim Chief Executive Officer.
This concentration of voting power could discourage or prevent a change in
control that otherwise could result in a premium in the price of our common
stock.
Page 7
A SIGNIFICANT PERCENTAGE OF OUR REVENUES DEPEND ON OUR DISTRIBUTORS' DILIGENT
SALES EFFORTS AND OUR DISTRIBUTORS' AND RETAIL CUSTOMERS' TIMELY PAYMENTS TO US.
Since February 1999, Virgin Interactive Entertainment Limited, or
"Virgin," has been the exclusive distributor for most of our products in Europe,
the Commonwealth of Independent States, Africa and the Middle East. Our
agreement with Virgin expires in February 2006. In August 2001, we entered into
a Distribution Agreement with Vivendi Universal Games, Inc., (formerly known as
Vivendi Universal Interactive Publishing North America), or "Vivendi," pursuant
to which Vivendi distributes substantially all our products in North America, as
well as in South America, South Africa, Korea, Taiwan and Australia. Our
agreement with Vivendi expires in December 2003, but may be extended with
respect to certain named products.
Virgin and Vivendi each have exclusive rights to distribute our products
in substantial portions of the world. As a consequence, the distribution of our
products by Virgin and Vivendi will generate a substantial majority of our
revenues, and proceeds from Virgin and Vivendi from the distribution of our
products will constitute a substantial majority of our operating cash flows.
Therefore, our revenues and cash flows could fall significantly and our business
and financial results could suffer material harm if:
o either Virgin or Vivendi fails to deliver to us the full proceeds owed
us from distribution of our products;
o either Virgin or Vivendi fails to effectively distribute our products
in their respective territories; or
o either Virgin or Vivendi otherwise fails to perform under their
respective distribution agreement.
We typically sell to distributors and retailers on unsecured credit,
with terms that vary depending upon the customer and the nature of the product.
We confront the risk of non-payment from our customers, whether due to their
financial inability to pay us, or otherwise. In addition, while we maintain a
reserve for uncollectible receivables, the reserve may not be sufficient in
every circumstance. As a result, a payment default by a significant customer
could cause material harm to our business.
THE TERMINATION OF OUR EXISTING CREDIT AGREEMENT HAS RESULTED IN A SUBSTANTIAL
REDUCTION IN THE CASH AVAILABLE TO FINANCE OUR OPERATIONS.
Pursuant to our credit agreement with LaSalle Business Credit Inc., or
"LaSalle", entered into in April 2001, we agreed to certain covenants. In
October 2001, LaSalle notified us that the credit agreement was being terminated
as a result of our failure to comply with some of those covenants and we would
no longer be able to continue to draw on the credit facility to fund future
operations. Because we depend on a credit agreement to fund our operations,
LaSalle's termination of the credit agreement has significantly impeded our
ability to fund our operations and has caused material harm to our business. We
will need to enter into a new credit agreement to fund our operations. There can
be no assurance that we will be able to enter into a new credit agreement or
that if we do enter into a new credit agreement, it will be on terms favorable
to us.
Page 8
OUR LONG-TERM EXCLUSIVE DISTRIBUTION AGREEMENT WITH VIRGIN INTERACTIVE
ENTERTAINMENT LIMITED MAY DISCOURAGE POTENTIAL ACQUIRERS FROM ACQUIRING US.
Pursuant to the settlement agreement we entered into with Titus, Virgin
and their affiliate on April 11, 2001, during the seven-year term of our
February 1999 distribution agreement with Virgin, we agreed not to sell, license
our publishing rights, or enter into any agreement to either sell or license our
publishing rights with respect to any products covered by the distribution
agreement in the territory covered by the distribution agreement, with the
exception of two qualified sales each year. The restrictions on sales and
licensing of publishing rights until 2006 may discourage potential acquirers
from entering into an acquisition transaction with us, or may cause potential
acquirers to demand terms that are less favorable to our stockholders.
In addition, we cannot terminate the distribution agreement without
incurring penalties of a minimum of $10 million, subject to substantial
increases pursuant to the terms of the distribution agreement, which also may
discourage potential acquirers that already have their own distribution
capabilities in territories covered by the distribution agreement.
A CHANGE OF CONTROL MAY CAUSE THE TERMINATION OF SOME OF OUR MATERIAL CONTRACTS
WITH OUR LICENSORS AND DISTRIBUTORS.
Some of our license, development and distribution agreements contain
provisions that allow the other party to terminate the agreement upon a change
in control of Interplay. Titus recently converted its remaining Series A
Preferred Stock into common stock, which as of March 15, 2002 gave Titus 72
percent of our total voting power. Some of our third-party developers and
licensors may assert that these events constitute a change in control of
Interplay and attempt to terminate their respective agreements with us.
THE UNPREDICTABILITY OF FUTURE RESULTS MAY CAUSE OUR STOCK PRICE TO REMAIN
DEPRESSED OR TO DECLINE FURTHER.
Our operating results have fluctuated in the past and may fluctuate in
the future due to several factors, some of which are beyond our control. These
factors include:
o demand for our products and our competitors' products;
o the size and rate of growth of the market for interactive
entertainment software;
o changes in personal computer and video game console platforms;
o the timing of announcements of new products by us and our competitors
and the number of new products and product enhancements released by us
and our competitors;
o changes in our product mix;
o the number of our products that are returned; and
o the level of our international and original equipment manufacturer
royalty and licensing net revenues.
Page 9
Many factors make it difficult to accurately predict the quarter in
which we will ship our products. Some of these factors include:
o the uncertainties associated with the interactive entertainment
software development process;
o approvals required from content and technology licensors; and
o the timing of the release and market penetration of new game hardware
platforms.
It is likely that in some future periods our operating results will not
meet the expectations of the public or of public market analysts. Any
unanticipated change in revenues or operating results is likely to cause our
stock price to fluctuate since such changes reflect new information available to
investors and analysts. New information may cause securities analysts and
investors to revalue our stock and this may cause fluctuations in our stock
price.
THERE ARE HIGH FIXED COSTS TO DEVELOPING OUR PRODUCTS. IF OUR REVENUES DECLINE
BECAUSE OF DELAYS IN THE INTRODUCTION OF OUR PRODUCTS, OR IF THERE ARE
SIGNIFICANT DEFECTS OR DISSATISFACTION WITH OUR PRODUCTS, OUR BUSINESS COULD BE
HARMED.
We have incurred significant net losses in recent periods, including net
losses of $46.3 million and $12.1 million for the years ended December 31, 2001
and 2000, respectively. Our losses stem partly from the significant costs we
incur to develop our entertainment software products. Moreover, a significant
portion of our operating expenses is relatively fixed, with planned expenditures
based largely on sales forecasts. At the same time, most of our products have a
relatively short life cycle and sell for a limited period of time after their
initial release, usually less than one year.
Relatively fixed costs and short windows in which to earn revenues mean
that sales of new products are important in enabling us to recover our
development costs, to fund operations and to replace declining net revenues from
older products. Our failure to accurately assess the commercial success of our
new products, and our delays in releasing new products, could reduce our net
revenues and our ability to recoup development and operational costs.
OUR GROWING DEPENDENCE ON REVENUES FROM GAME CONSOLE SOFTWARE PRODUCTS INCREASES
OUR EXPOSURE TO SEASONAL FLUCTUATIONS IN THE PURCHASES OF GAME CONSOLES.
The interactive entertainment software industry is highly seasonal, with
the highest levels of consumer demand occurring during the year-end holiday
buying season. As a result, our net revenues, gross profits and operating income
have historically been highest during the second half of the year. The impact of
this seasonality will increase as we rely more heavily on game console net
revenues in the future. Seasonal fluctuations in revenues from game console
products may cause material harm to our business and financial results.
IF OUR PRODUCTS DO NOT ACHIEVE BROAD MARKET ACCEPTANCE, OUR BUSINESS COULD BE
HARMED SIGNIFICANTLY.
Consumer preferences for interactive entertainment software are always
changing and are extremely difficult to predict. Historically, few interactive
entertainment software products have
Page 10
achieved continued market acceptance. Instead, a limited number of releases have
become "hits" and have accounted for a substantial portion of revenues in our
industry. Further, publishers with a history of producing hit titles have
enjoyed a significant marketing advantage because of their heightened brand
recognition and consumer loyalty. We expect the importance of introducing hit
titles to increase in the future. We cannot assure you that our new products
will achieve significant market acceptance, or that we will be able to sustain
this acceptance for a significant length of time if we achieve it.
We believe that our future revenue will continue to depend on the
successful production of hit titles on a continuous basis. Because we introduce
a relatively limited number of new products in a given period, the failure of
one or more of these products to achieve market acceptance could cause material
harm to our business. Further, if our products do not achieve market acceptance,
we could be forced to accept substantial product returns or grant significant
pricing concessions to maintain our relationship with retailers and our access
to distribution channels. If we are forced to accept significant product returns
or grant significant pricing concessions, our business and financial results
could suffer material harm.
OUR RELIANCE ON THIRD PARTY SOFTWARE DEVELOPERS SUBJECTS US TO THE RISKS THAT
THESE DEVELOPERS WILL NOT SUPPLY US WITH HIGH QUALITY PRODUCTS IN A TIMELY
MANNER OR ON ACCEPTABLE TERMS.
Third party interactive entertainment software developers develop many
of our software products. Since we depend on these developers in the aggregate,
we remain subject to the following risks:
o limited financial resources may force developers out of business prior
to their completion of projects for us or require us to fund
additional costs; and
o the possibility that developers could demand that we renegotiate our
arrangements with them to include new terms less favorable to us.
Increased competition for skilled third party software developers also
has compelled us to agree to make advance payments on royalties and to guarantee
minimum royalty payments to intellectual property licensors and game developers.
Moreover, if the products subject to these arrangements, are not delivered
timely, or with acceptable quality, or do not generate sufficient sales volumes
to recover these royalty advances and guaranteed payments, we would have to
write-off unrecovered portions of these payments, which could cause material
harm to our business and financial results.
IF WE FAIL TO ANTICIPATE CHANGES IN VIDEO GAME PLATFORMS AND TECHNOLOGY, OUR
BUSINESS MAY BE HARMED.
The interactive entertainment software industry is subject to rapid
technological change. New technologies could render our current products or
products in development obsolete or unmarketable. Some of these new technologies
include:
o operating systems such as Microsoft Windows XP;
o technologies that support games with multi-player and online features;
Page 11
o new media formats such as online delivery and digital video disks, or
DVDs; and
o recent releases or planned releases in the near future of new video
game consoles such as the Sony Playstation 2, the Nintendo Gamecube
and the Microsoft Xbox.
We must continually anticipate and assess the emergence of, and market
acceptance of, new interactive entertainment software platforms well in advance
of the time the platform is introduced to consumers. Because product development
cycles are difficult to predict, we must make substantial product development
and other investments in a particular platform well in advance of introduction
of the platform. If the platforms for which we develop new software products or
modify existing products are not released on a timely basis or do not attain
significant market penetration, or if we develop products for a delayed or
unsuccessful platform, our business and financial results could suffer material
harm.
New interactive entertainment software platforms and technologies also
may undermine demand for products based on older technologies. Our success will
depend in part on our ability to adapt our products to those emerging game
platforms that gain widespread consumer acceptance. Our business and financial
results may suffer material harm if we fail to:
o anticipate future technologies and platforms and the rate of market
penetration of those technologies and platforms;
o obtain licenses to develop products for those platforms on favorable
terms; or
o create software for those new platforms on a timely basis.
WE COMPETE WITH A NUMBER OF COMPANIES THAT HAVE SUBSTANTIALLY GREATER FINANCIAL,
MARKETING AND PRODUCT DEVELOPMENT RESOURCES THAN WE DO.
The interactive entertainment software industry is intensely competitive
and new interactive entertainment software programs and platforms are regularly
introduced. The greater resources of our competitors permit them to undertake
more extensive marketing campaigns, adopt more aggressive pricing policies, and
pay higher fees than we can to licensors of desirable motion picture,
television, sports and character properties and to third party software
developers.
We compete primarily with other publishers of personal computer and
video game console interactive entertainment software. Significant competitors
include Electronic Arts Inc., Activision, Inc., and Vivendi Universal
Interactive Publishing.
Many of these competitors have substantially greater financial,
technical and marketing resources, larger customer bases, longer operating
histories, greater name recognition and more established relationships in the
industry than we do. Competitors with more extensive customer bases, broader
customer relationships and broader industry alliances may be able to use such
resources to their advantage in competitive situations, including establishing
relationships with many of our current and potential customers.
In addition, integrated video game console hardware/software companies
such as Sony Computer Entertainment, Nintendo, and Microsoft Corporation compete
directly with us in the development of software titles for their respective
platforms and they have generally discretionary
Page 12
approval authority over the products we develop for their platforms. Large
diversified entertainment companies, such as The Walt Disney Company, many of
which own substantial libraries of available content and have substantially
greater financial resources, may decide to compete directly with us or to enter
into exclusive relationships with our competitors. We also believe that the
overall growth in the use of the Internet and online services by consumers may
pose a competitive threat if customers and potential customers spend less of
their available home personal computing time using interactive entertainment
software and more time using the Internet and online services.
WE MAY FACE DIFFICULTY IN OBTAINING ACCESS TO RETAILERS NECESSARY TO MARKET AND
SELL OUR PRODUCTS EFFECTIVELY.
Retailers typically have a limited amount of shelf space and promotional
resources, and there is intense competition among consumer software producers,
and in particular producers of interactive entertainment software products, for
high quality retail shelf space and promotional support from retailers. To the
extent that the number of consumer software products and computer platforms
increases, competition for shelf space may intensify and require us to increase
our marketing expenditures. Due to increased competition for limited shelf
space, retailers and distributors are in an improving position to negotiate
favorable terms of sale, including price discounts, price protection, marketing
and display fees and product return policies. Our products constitute a
relatively small percentage of any retailer's sales volume, and we cannot assure
you that retailers will continue to purchase our products or to provide our
products with adequate levels of shelf space and promotional support. A
prolonged failure in this regard may cause material harm to our business.
We currently sell our products to retailers through external
distribution partners and co-publishing deals. We also derive revenues from
licensing of our products to hardware companies (or OEM), selling subscriptions
on our online gaming services, selling advertisements on our online web pages
and selling our packaged goods through our online store. The loss of, or
significant reduction in sales to, any of our principal distributors could cause
material harm to our business.
OUR CUSTOMERS HAVE THE ABILITY TO RETURN OUR PRODUCTS OR TO RECEIVE PRICING
CONCESSIONS AND SUCH RETURNS AND CONCESSIONS COULD REDUCE OUR NET REVENUES AND
RESULTS OF OPERATIONS.
We are exposed to the risk of product returns and pricing concessions
with respect to our distributors and retailers. We allow distributors and
retailers to return defective, shelf-worn and damaged products in accordance
with negotiated terms, and also offer a 90-day limited warranty to our end users
that our products will be free from manufacturing defects. In addition, we
provide pricing concessions to our customers to manage our customers' inventory
levels in the distribution channel. We could be forced to accept substantial
product returns and provide pricing concessions to maintain our relationships
with retailers and our access to distribution channels. Product return and
pricing concessions that exceed our reserves have caused material harm to our
results of operations in the recent past and may do so again in the future.
SUBSTANTIAL SALES OF OUR COMMON STOCK BY OUR EXISTING STOCKHOLDERS MAY REDUCE
THE PRICE OF OUR STOCK AND DILUTE EXISTING STOCKHOLDERS.
We have filed registration statements covering a total of approximately
53 million shares of our common stock for the benefit of those shareholders.
Assuming the effectiveness of these registration statements, these shares would
be eligible for immediate resale in the public market. Included in these
registrations are shares of common stock owned by Universal Studios, Inc. (now
Page 13
owned by Vivendi), which beneficially owns approximately 5% of our common stock,
Titus Interactive S.A., which beneficially owns approximately 72% of our common
stock, and investors that acquired shares of common stock in our April 2001
financing.
Future sales of common stock by these holders could substantially
increase the volume of shares being publicly traded and could decrease the
trading price of our common stock and, therefore, the price at which you could
resell your shares. A lower market price for our shares also might impair our
ability to raise additional capital through the sale of our equity securities.
Any future sales of our stock would also dilute existing stockholders.
WE DEPEND UPON THIRD PARTY LICENSES OF CONTENT FOR MANY OF OUR PRODUCTS.
Many of our current and planned products, such as our Star Trek,
Advanced Dungeons and Dragons and Caesars Palace titles, are lines based on
original ideas or intellectual properties licensed from other parties. From time
to time we may not be in compliance with certain terms of these license
agreements, and our ability to market products based on these licenses may be
negatively impacted. Moreover, disputes regarding these license agreements may
also negatively impact our ability to market products based on these licenses.
Additionally, we may not be able to obtain new licenses, or maintain or renew
existing licenses, on commercially reasonable terms, if at all. For example,
Viacom Consumer Products, Inc. has granted the Star Trek license to another
party upon the expiration of our rights in 2002. If we are unable to maintain
current licenses or obtain new licenses for the underlying content that we
believe offers the greatest consumer appeal, we would either have to seek
alternative, potentially less appealing licenses, or release products without
the desired underlying content, either of which could limit our commercial
success and cause material harm to our business.
WE MAY FAIL TO MAINTAIN EXISTING LICENSES, OR OBTAIN NEW LICENSES FROM HARDWARE
COMPANIES ON ACCEPTABLE TERMS OR TO OBTAIN RENEWALS OF EXISTING OR FUTURE
LICENSES FROM LICENSORS.
We are required to obtain a license to develop and distribute software
for each of the video game console platforms for which we develop products,
including a separate license for each of North America, Japan and Europe. We
have obtained licenses to develop software for the Sony PlayStation and
PlayStation 2, as well as video game platforms from Nintendo and Microsoft. In
addition, each of these companies has the right to approve the technical
functionality and content of our products for their platforms prior to
distribution. Due to the competitive nature of the approval process, we must
make significant product development expenditures on a particular product prior
to the time we seek these approvals. Our inability to obtain these approvals
could cause material harm to our business.
OUR SALES VOLUME AND THE SUCCESS OF OUR PRODUCTS DEPENDS IN PART UPON THE NUMBER
OF PRODUCT TITLES DISTRIBUTED BY HARDWARE COMPANIES FOR USE WITH THEIR VIDEO
GAME PLATFORMS.
Even after we have obtained licenses to develop and distribute software,
we depend upon hardware companies such as Sony Computer Entertainment, Nintendo
and Microsoft, or their designated licensees, to manufacture the CD-ROM or
DVD-ROM media discs that contain our software. These discs are then run on the
companies' video game consoles. This process subjects us to the following risks:
Page 14
o we are required to submit and pay for minimum numbers of discs we want
produced containing our software, regardless of whether these discs are
sold, shifting onto us the financial risk associated with poor sales of
the software developed by us; and
o reorders of discs are expensive, reducing the gross margin we receive
from software releases that have stronger sales than initially
anticipated and that require the production of additional discs.
As a result, video game console hardware licensors can shift onto us the
risk that if actual retailer and consumer demand for our interactive
entertainment software differs from our forecasts, we must either bear the loss
from overproduction or the lower per-unit revenues associated with producing
additional discs. Either situation could lead to material reductions in our net
revenues.
WE HAVE A LIMITED NUMBER OF KEY PERSONNEL. THE LOSS OF ANY SINGLE KEY PERSON OR
THE FAILURE TO HIRE AND INTEGRATE CAPABLE NEW KEY PERSONNEL COULD HARM OUR
BUSINESS.
Our interactive entertainment software requires extensive time and
creative effort to produce and market. The production of this software is
closely tied to the continued service of our key product design, development,
sales, marketing and management personnel. Our future success also will depend
upon our ability to attract, motivate and retain qualified employees and
contractors, particularly software design and development personnel. Competition
for highly skilled employees is intense, and we may fail to attract and retain
such personnel. Alternatively, we may incur increased costs in order to attract
and retain skilled employees. Our failure to retain the services of key
personnel, including competent executive management, or to attract and retain
additional qualified employees could cause material harm to our business.
OUR INTERNATIONAL SALES EXPOSE US TO RISKS OF UNSTABLE FOREIGN ECONOMIES,
DIFFICULTIES IN COLLECTION OF REVENUES, INCREASED COSTS OF ADMINISTERING
INTERNATIONAL BUSINESS TRANSACTIONS AND FLUCTUATIONS IN EXCHANGE RATES.
Our net revenues from international sales accounted for approximately 27
percent and 34 percent of our total net revenues for years ended December 31,
2001 and 2000, respectively. Most of these revenues come from our distribution
relationship with Virgin, pursuant to which Virgin became the exclusive
distributor for most of our products in Europe, the Commonwealth of Independent
States, Africa and the Middle East. To the extent our resources allow, we intend
to continue to expand our direct and indirect sales, marketing and product
localization activities worldwide.
Our international sales and operations are subject to a number of
inherent risks, including the following:
o recessions in foreign economies may reduce purchases of our products;
o translating and localizing products for international markets is time-
consuming and expensive;
o accounts receivable are more difficult to collect and when they are
collectible, they may take longer to collect;
o regulatory requirements may change unexpectedly;
Page 15
o it is difficult and costly to staff and manage foreign operations;
o fluctuations in foreign currency exchange rates;
o political and economic instability;
o our dependence on Virgin as our exclusive distributor in Europe, the
Commonwealth of Independent States, Africa and the Middle East; and
o delays in market penetration of new platforms in foreign territories.
These factors may cause material declines in our future international
net revenues and, consequently, could cause material harm to our business.
A significant, continuing risk we face from our international sales and
operations stems from currency exchange rate fluctuations. Because we do not
engage in currency hedging activities, fluctuations in currency exchange rates
have caused significant reductions in our net revenues from international sales
and licensing due to the loss in value upon conversion into U.S. Dollars. We may
suffer similar losses in the future.
INADEQUATE INTELLECTUAL PROPERTY PROTECTIONS COULD PREVENT US FROM ENFORCING OR
DEFENDING OUR PROPRIETARY TECHNOLOGY.
We regard our software as proprietary and rely on a combination of
patent, copyright, trademark and trade secret laws, employee and third party
nondisclosure agreements and other methods to protect our proprietary rights. We
own or license various copyrights and trademarks, and hold the rights to one
patent application related to one of our titles. While we provide "shrinkwrap"
license agreements or limitations on use with our software, it is uncertain to
what extent these agreements and limitations are enforceable. We are aware that
some unauthorized copying occurs within the computer software industry, and if a
significantly greater amount of unauthorized copying of our interactive
entertainment software products were to occur, it could cause material harm to
our business and financial results.
Policing unauthorized use of our products is difficult, and software
piracy can be a persistent problem, especially in some international markets.
Further, the laws of some countries where our products are or may be distributed
either do not protect our products and intellectual property rights to the same
extent as the laws of the United States, or are weakly enforced. Legal
protection of our rights may be ineffective in such countries, and as we
leverage our software products using emerging technologies such as the Internet
and online services, our ability to protect our intellectual property rights and
to avoid infringing others' intellectual property rights may diminish. We cannot
assure you that existing intellectual property laws will provide adequate
protection for our products in connection with these emerging technologies.
WE MAY UNINTENTIONALLY INFRINGE ON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS,
WHICH COULD EXPOSE US TO SUBSTANTIAL DAMAGES OR RESTRICT OUR OPERATIONS.
As the number of interactive entertainment software products increases
and the features and content of these products continue to overlap, software
developers increasingly may become subject to infringement claims. Although we
believe that we make reasonable efforts to ensure that our
Page 16
products do not violate the intellectual property rights of others, it is
possible that third parties still may claim infringement. From time to time, we
receive communications from third parties regarding such claims. Existing or
future infringement claims against us, whether valid or not, may be time
consuming and expensive to defend. Intellectual property litigation or claims
could force us to do one or more of the following:
o cease selling, incorporating or using products or services that
incorporate the challenged intellectual property;
o obtain a license from the holder of the infringed intellectual property,
which license, if available at all, may not be available on commercially
favorable terms; or
o redesign our interactive entertainment software products, possibly in a
manner that reduces their commercial appeal.
Any of these actions may cause material harm to our business and
financial results.
OUR SOFTWARE MAY BE SUBJECT TO GOVERNMENTAL RESTRICTIONS OR RATING SYSTEMS.
Legislation is periodically introduced at the state and federal levels
in the United States and in foreign countries to establish a system for
providing consumers with information about graphic violence and sexually
explicit material contained in interactive entertainment software products. In
addition, many foreign countries have laws that permit governmental entities to
censor the content of interactive entertainment software. We believe that
mandatory government-run rating systems eventually will be adopted in many
countries that are significant markets or potential markets for our products. We
may be required to modify our products to comply with new regulations, which
could delay the release of our products in those countries.
Due to the uncertainties regarding such rating systems, confusion in the
marketplace may occur, and we are unable to predict what effect, if any, such
rating systems would have on our business. In addition to such regulations,
certain retailers have in the past declined to stock some of our products
because they believed that the content of the packaging artwork or the products
would be offensive to the retailer's customer base. While to date these actions
have not caused material harm to our business, we cannot assure you that similar
actions by our distributors or retailers in the future would not cause material
harm to our business.
WE MAY FAIL TO IMPLEMENT INTERNET-BASED PRODUCT OFFERINGS SUCCESSFULLY.
We seek to establish an online presence by creating and supporting sites
on the Internet and by offering our products through these sites. Our ability to
establish an online presence and to offer online products successfully depends
on:
o increases in the Internet's data transmission capability;
o growth in an online market sizeable enough to make commercial
transactions profitable.
Because global commerce and the exchange of information on the Internet
and other open networks are relatively new and evolving, a viable commercial
marketplace on the Internet may not emerge and complementary products for
providing and carrying Internet traffic and commerce may
Page 17
not be developed. Even with the proper infrastructure, we may fail to develop a
profitable online presence or to generate any significant revenue from online
product offerings in the near future, or at all.
If the Internet does not become a viable commercial marketplace, or if
this development occurs but is insufficient to meet our needs or if such
development is delayed beyond the point where we plan to have established an
online service, our business and financial condition could suffer material harm.
SOME PROVISIONS OF OUR CHARTER DOCUMENTS MAY MAKE TAKEOVER ATTEMPTS DIFFICULT,
WHICH COULD DEPRESS THE PRICE OF OUR STOCK AND INHIBIT OUR ABILITY TO RECEIVE A
PREMIUM PRICE FOR YOUR SHARES.
Our Board of Directors has the authority, without any action by the
stockholders, to issue up to 5,000,000 shares of preferred stock and to fix the
rights and preferences of such shares. In addition, our certificate of
incorporation and bylaws contain provisions that:
o eliminate the ability of stockholders to act by written consent and to
call a special meeting of stockholders; and
o require stockholders to give advance notice if they wish to nominate
directors or submit proposals for stockholder approval.
These provisions may have the effect of delaying, deferring or
preventing a change in control, may discourage bids for our common stock at a
premium over its market price and may adversely affect the market price, and the
voting and other rights of the holders, of our common stock.
OUR STOCK PRICE IS VOLATILE.
The trading price of our common stock has previously fluctuated and
could continue to fluctuate in response to factors that are largely beyond our
control, and which may not be directly related to the actual operating
performance of our business, including:
o general conditions in the computer, software, entertainment, media or
electronics industries;
o changes in earnings estimates or buy/sell recommendations by analysts;
o investor perceptions and expectations regarding our products, plans and
strategic position and those of our competitors and customers; and
o price and trading volume volatility of the broader public markets,
particularly the high technology sections of the market.
WE DO NOT PAY DIVIDENDS ON OUR COMMON STOCK.
We have not paid any cash dividends on our common stock and do not
anticipate paying dividends in the foreseeable future.
Page 18
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed a registration statement on Form S-3 with the SEC with
respect to the Common Stock offered by this prospectus. This prospectus, which
constitutes a part of the registration statement, does not contain all of the
information set forth in the registration statement or the exhibits and
schedules that are part of the registration statement. You may read and copy any
document we file at the SEC's public reference rooms in Washington D.C. We refer
you to the registration statement and the exhibits and schedules thereto for
further information with respect to us and our Common Stock. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference room. Our SEC
filings are also available to the public from the SEC's website at www.sec.gov.
We are subject to the information and periodic reporting requirements of
the Securities Exchange Act and, in accordance with those requirements, will
continue to file periodic reports, proxy statements and other information with
the SEC. These periodic reports, proxy statements and other information will be
available for inspection and copying at the SEC's public reference rooms and the
SEC's website referred to above.
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring to those documents. We incorporate by reference the documents listed
below and any additional documents filed by us with the SEC under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this offering of
securities is terminated. The information we incorporate by reference is an
important part of this prospectus, and any information that we file later with
the SEC will automatically update and supersede this information.
The documents we incorporate by reference are:
1. Our Annual Report on Form 10-K for the year ended December 31, 2001;
2. Amendment No. 1 to our Annual Report on Form 10-K as filed on April
30, 2002;
3. Amendment No. 2 to our Annual Report on Form 10-K as filed on May 2,
2002;
4. Our Current Report on Form 8-K as filed on January 28, 2002;
5. Our Current Report on Form 8-K as filed on January 28, 2002;
6. Our Current Report on Form 8-K as filed on February 21, 2002;
7. Our Current Report on Form 8-K as filed on April 10, 2002;
8. Our Current Report on Form 8-K as filed on April 29, 2002;
9. Our Current Report on Form 8-K as filed on May 6, 2002;
10. The description of our capital stock contained in our Registration
Statement on Form 8-A; and
Page 19
11. All other reports filed by us pursuant to Section 13(a) or 15(d) of
the SEC Exchange Act since December 31, 2001.
You may request a copy of these filings, at no cost, by writing or
calling us at Interplay Entertainment Corp., 16815 Von Karman Avenue, Irvine,
California 92606, telephone number (949) 553-6655, Attention: Scott Luirette.
You should rely only on the information contained in this prospectus or
any supplement and in the documents incorporated by reference above. We have not
authorized anyone else to provide you with different information. You should not
assume that the information in this prospectus or any supplement or in the
documents incorporated by reference is accurate on any date other than the date
on the front of those documents.
USE OF PROCEEDS
The proceeds from the sale of each selling stockholder's Common Stock
will belong to that selling stockholder. We will not receive any proceeds from
such sales.
SELLING STOCKHOLDERS
Pursuant to a Common Stock Subscription Agreement dated March 29, 2001
entered into by and among us and certain investors, we sold and issued an
aggregate of 8,126,770 shares of our Common Stock to such investors for a total
purchase price of $12.7 million. In connection with this transaction, we issued
to each investor a warrant to purchase one share of our Common Stock for each
share that the investor initially purchased, at an exercise price of $1.75 per
share, with a five year term. Fifty percent (50%) of each warrant was
exercisable immediately, and the remaining fifty percent (50%) of each warrant
became exercisable on June 28, 2001 because the closing price per share of our
Common Stock as reported on the Nasdaq National Market did not exceed $2.75 for
twenty (20) consecutive trading days during the ninety (90) day period following
the issuance of the warrant. Pursuant to the Subscription Agreement, we agreed
to file the registration statement of which this prospectus is a part with the
SEC to register for resale the shares of our Common Stock we issued to those
stockholders and the shares issuable upon exercise of the warrants, and to keep
the registration statement effective until all of the registered shares are
sold.
We engaged Roth Capital Partners, Inc. to assist in the sale of our
Common Stock issued to investors pursuant to the Subscription Agreement.
Pursuant to an agreement between Roth and us, we issued Roth a Warrant to
purchase up to a maximum of 500,000 shares of our Common Stock at an exercise
price of $1.5625 per share. For its services, Roth also received a cash
commission in the amount of $0.9 million.
The Subscription Agreements provide that if we do not register for
resale the shares of our Common Stock we issued to the stockholders and the
shares issuable upon exercise of the warrants by May 31, 2001, we must pay the
stockholders on demand approximately $250,000 for each month after May 31, 2001
that we do not register the shares. As of April 30, 2002, we have accrued an
obligation to pay these stockholders an aggregate amount of approximately $2.5
million in cash.
Other than the transactions described above, we had no material
relationship with any selling stockholder during the three years preceding the
date of this prospectus.
Page 20
The following table sets forth: (1) the name of each of the stockholders
for whom we are registering shares under this registration statement; (2) the
number of shares of our Common Stock beneficially owned by each such stockholder
prior to this offering (including all shares of Common Stock issuable upon the
exercise of the Warrants or the Roth Warrant as described above, whether or not
exercisable within 60 days of the date hereof); (3) the number of shares of our
Common Stock offered by such stockholder pursuant to this prospectus; and (4)
the number of shares, and (if one percent or more) the percentage of the total
of the outstanding shares, of our Common Stock to be beneficially owned by each
such stockholder after this offering, assuming that all of the shares of our
Common Stock beneficially owned by each such stockholder are sold and that such
stockholders acquire no additional shares of our Common Stock prior to the
completion of this offering. Such data is based upon information provided by
each Selling Stockholder.
COMMON STOCK
BEING PERCENTAGE OF
COMMON STOCK OFFERED COMMON STOCK COMMON STOCK
OWNED PRIOR PURSUANT TO OWNED UPON OWNED UPON
TO THE THIS COMPLETION OF COMPLETION OF
NAME OFFERING PROSPECTUS THIS OFFERING THIS OFFERING
- ----------------------------------------- ------------ ------------- -------------- -------------
SS Technology Fund (1) 796,400 300,000 496,400 *
SS Private Equity Fund (2) 800,000 800,000 0 *
SS Fund III (3) 2,094,500 1,725,000 369,500 *
SS Cayman Fund (4) 695,290 575,000 120,290 *
Fidelity Advisor Series I (5) 2,702,530 2,701,540 990 *
Endeavor Asset Management, L.P. (6) 172,960 172,960 0 *
Stevan Allen Birnbaum 128,000 128,000 0 *
Oxcal Venture Fund (7) 128,000 128,000 0 *
Edward Kitchen 64,000 64,000 0 *
Managed Risk Trading, L.P. (8) 300,000 300,000 0 *
Ram Capital Resources, LLC (9) 36,000 36,000 0 *
Redwood Partners, LLC (10) 240,000 240,000 0 *
Pat Allen 128,000 128,000 0 *
RLR Partners, L.P. (11) 200,000 200,000 0 *
Watson Small-Cap Partners, I, L.P. (12) 311,808 311,808 0 *
Watson Small-Cap Partners II, L.P. (13) 100,576 100,576 0 *
Watson Small-Cap Fund, Ltd. (14) 1,827,616 1,827,616 0 *
Watson Investment Partners, L.P. (15) 124,576 124,576 0 *
Watson Investment Partners II, L.P. (16) 18,016 18,016 0 *
Watson Offshore Fund, Ltd. (17) 177,408 177,408 0 *
Lagunitas Partners LP (18) 700,000 700,000 0 *
Gruber & McBaine International (19) 240,000 240,000 0 *
Jon D. Gruber 200,000 200,000 0 *
J Patterson McBaine 60,000 60,000 0 *
Johnson Capital Group, Inc. (20) 128,000 128,000 0 *
Peter Hitch 128,000 128,000 0 *
Spinner Global Technology Fund, Ltd. (21) 1,000,000 1,000,000 0 *
Roth Capital Partners, Inc. (22) 3,142,000 500,000 2,642,000 *
<FN>
* less than 1%
- ---------------------
(1) Marcs Greenhouse and David Greenhouse exercise shared voting and
investment authority over 796,400 shares held of record by SS Technology Fund.
Each disclaims beneficial
Page 21
ownership of such shares. SS Technology Fund's address is 153 East 53rd Street,
55th Floor, New York, New York 10022.
(2) Marcs Greenhouse and David Greenhouse exercise shared voting and
investment authority over 800,000 shares held of record by SS Private Equity
Fund. Each disclaims beneficial ownership of such shares. SS Private Equity
Fund's address is 153 East 53rd Street, 55th Floor, New York, New York 10022.
(3) Marcs Greenhouse and David Greenhouse exercise shared voting and
investment authority over 2,094,500 shares held of record by SS Fund III. Each
disclaims beneficial ownership of such shares. SS Fund III's address is 153 East
53rd Street, 55th Floor, New York, New York 10022.
(4) Marcs Greenhouse and David Greenhouse exercise shared voting and
investment authority over 695,290 shares held of record by SS Cayman Fund.
Each disclaims beneficial ownership of such shares. SS Cayman Fund's address is
153 East 53rd Street, 55th Floor, New York, New York 10022.
(5) Fidelity Management & Research Company ("Fidelity"), 82 Devonshire
Street, Boston, Massachusetts 02109, a wholly-owned subsidiary of FMR Corp., and
an investment advisor registered under Section 203 of the Investment Advisers
Act of 1940, is the beneficial owner 2,702,530 shares held of record by Fidelity
Advisor Series I: Fidelity Advisor Value Strategies Fund (the "Fund") as a
result of acting as investment adviser to the Fund. Edward C. Johnson 3d,
Chairman of FMR Corp., and FMR Corp., each through its control of Fidelity, has
sole power to dispose of the shares owned directly by the Fund. Neither FMR Corp
nor Edward C. Johnson 3d has the sole power to vote or direct the voting of the
shares owned directly by the Fund, which power resides with the Fund's Board of
Trustees (the "Board"). Fidelity carries out the voting of the shares held by
the Fund under written guidelines established by the Board. Fidelity Advisor
Series I's address is 3 Hanover Street, Ground Floor, New York, New York 10005.
(6) Patrick Tully, Mark Fain, and Chad Comiteau exercise shared voting
and investment authority over 172,960 shares held of record by Endeavor Asset
Management, L.P. Each disclaims beneficial ownership of such shares. Endeavor
Asset Management, L.P.'s address is 39 Broadway, 32nd Floor, New York, New York
10006.
(7) Stevan Allen Birnbaum and Glover Wickersham exercise shared voting
and investment authority over 128,000 shares held of record by Oxcal Venture
Fund. Each disclaims beneficial ownership of such shares. Oxcal Venture Fund's
address is 17308 Avenida De La Herradura, Pacific Palisades, California 90272.
(8) Andrew Burton exercises sole voting and investment authority over
300,000 shares held of record by Managed Risk Trading, L.P. He disclaims
beneficial ownership of such shares. Managed Risk Trading, L.P. is a registered
broker-dealer and may engage in short sales of the Company's stock. Managed Risk
Trading, L.P.'s address is 120 Broadway, Suite 1050 New York, New York 10271.
(9) Michael Fein exercises sole voting and investment authority over
36,000 shares held of record by Ram Capital Resources, LLC. He disclaims
beneficial ownership of such shares. Ram
Page 22
Capital Resources, LLC may engage in short sales of the Company's Stock. Ram
Capital Resources, LLC's address is 45 Rockefellar Plaza, Suite 2038, New York,
New York 10111.
(10) Michael Schwartz exercises sole voting and investment authority
over 240,000 shares held of record by Redwood Partners, LLC. He disclaims
beneficial ownership of such shares. Redwood Partners, LLC is a registered
broker-dealer and may engage in short sales of the Company's stock. Redwood
Partners, LLC's address is 111 Broadway, 2nd Floor, New York, New York 10006.
(11) Ronald Rotter exercises sole voting and investment authority over
200,000 shares held of record by RLR Partners, L.P. He disclaims beneficial
ownership of such shares. RLR Partners, L.P.'s address is 120 Broadway, Suite
1050 New York, New York 10271.
(12) Stephen Watson exercises sole voting and investment authority over
311,808 shares held of record by Watson Small-Cap Partners I, L.P. He disclaims
beneficial ownership of such shares. Watson Small-Cap Partners I, L.P.'s address
is 237 Park Avenue, Suite 801, New York, New York 10017.
(13) Stephen Watson exercises sole voting and investment authority over
100,576 shares held of record by Watson Small-Cap Partners II, L.P. He disclaims
beneficial ownership of such shares. Watson Small-Cap Partners II, L.P.'s
address is 237 Park Avenue, Suite 801, New York, New York 10017.
(14) Stephen Watson exercises sole voting and investment authority over
1,827,616 shares held of record by Watson Small-Cap Fund, Ltd. He disclaims
beneficial ownership of such shares. Watson Small-Cap Fund, Ltd.'s address is
237 Park Avenue, Suite 801, New York, New York 10017.
(15) Stephen Watson exercises sole voting and investment authority over
124,576 shares held of record by Watson Investment Partners, L.P. He disclaims
beneficial ownership of such shares. Watson Investment Partners, L.P.'s address
is 237 Park Avenue, Suite 801, New York, New York 10017.
(16) Stephen Watson exercises sole voting and investment authority over
18,016 shares held of record by Watson Investment Partners II, L.P. He disclaims
beneficial ownership of such shares. Watson Investment Partners II, L.P.'s
address is 237 Park Avenue, Suite 801, New York, New York 10017.
(17) Stephen Watson exercises sole voting and investment authority over
177,408 shares held of record by Watson Offshore Fund, Ltd. He disclaims
beneficial ownership of such shares. Watson Offshore Fund, Ltd.'s address is 237
Park Avenue, Suite 801, New York, New York 10017.
(18) Jon D. Gruber, J. Patterson McBaine, Thomas O. Lloyd-Butler and
Eric B. Swergold exercise shared voting and investment authority over 700,000
shares held of record by Lagunitas Partners, L.P. Each disclaims beneficial
ownership of such shares. Lagunitas Partners, L.P.'s address is 50 Osgood Place,
San Francisco, California 94133.
(19) Jon D. Gruber, J. Patterson McBaine, Thomas O. Lloyd-Butler and
Eric B. Swergold exercise shared voting and investment authority over 240,000
shares held of record by Gruber &
Page 23
McBaine International. Each disclaims beneficial ownership of such shares.
Gruber & McBaine International's address is 50 Osgood Place, San Francisco,
California 94133.
(20) Guy K. Johnson exercises sole voting and investment authority over
128,000 shares held of record by Johnson Capital Group, Inc. Each disclaims
beneficial ownership of such shares. Johnson Capital Group's address is 18500
Von Karman Avenue, Suite 500, Irvine, California 92612.
(21) Arthur C. Spinner exercises sole voting and investment authority
over 1,000,000 shares held of record by Spinner Global Technology Fund, Ltd. He
disclaims beneficial ownership of such shares. Spinner Global Technology Fund,
Ltd.'s address is 450 Park Avenue, Suite 2102, New York, New York 10022.
(22) Gordon Roth exercises sole voting and investment authority over
3,142,000 shares held of record by Roth Capital Partners, Inc. He disclaims
beneficial ownership of such shares. Roth Capital Partners, Inc.'s address is 24
Corporate Plaza Drive, Newport Beach, California 92660.
</FN>
PLAN OF DISTRIBUTION
The shares of our Common Stock offered pursuant to this prospectus may
be offered and sold from time to time by the selling stockholders listed in the
preceding section, or their donees, transferees, pledgees or other successors in
interest that receive such shares as a gift or other non-sale related transfer.
These selling stockholders will act independently of us in making decisions with
respect to the timing, manner and size of each sale. All or a portion of the
Common Stock offered by this prospectus may be offered for sale from time to
time on the Nasdaq National Market or on one or more exchanges, or otherwise at
prices and terms then obtainable, or in negotiated transactions. The
distribution of these securities may be effected in one or more transactions
that may take place on the over-the-counter market, including, among others,
ordinary brokerage transactions, privately negotiated transactions or through
sales to one or more dealers for resale of such securities as principals, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The selling stockholders may
also offer to sell and sell the Common Stock offered by this prospectus in
options transactions. The selling stockholders may pay usual and customary or
specifically negotiated brokerage fees or commissions.
The selling stockholders may also engage in short sales against the box,
puts and calls and other transactions in our securities or derivatives of our
securities and may sell or deliver shares in connection with these trades. The
selling stockholders may pledge their shares to their brokers under the margin
provisions of customer agreements. If a selling stockholder defaults on a margin
loan, the broker may, from time to time, offer and sell the pledged shares. The
selling stockholders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or broker-
dealers regarding the sale of their shares other than ordinary course brokerage
arrangements, nor is there an underwriter or coordinating broker acting in
connection with the proposed sale of shares by the selling stockholders.
We will not receive any part of the proceeds from the sale of Common
Stock. The selling stockholders and intermediaries through whom such securities
are sold may be deemed "underwriters" within the meaning of the Securities Act,
in which event commissions received by such intermediary may be deemed to be
underwriting commissions under the Securities Act. We will pay all expenses of
the registration of securities covered by this prospectus. The selling
stockholders will pay any applicable underwriters' commissions and expenses,
brokerage fees or transfer taxes.
Page 24
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
on by Akin, Gump, Strauss, Hauer & Feld, L.L.P., Los Angeles, California.
EXPERTS
The consolidated financial statements and schedule of Interplay
Entertainment Corp. at December 31, 2001, and for the year then ended appearing
in Interplay Entertainment Corp.'s Annual Report (Form 10-K) for the year ended
December 31, 2001, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon (which contains an explanatory paragraph
describing conditions that raise substantial doubt about the Company's ability
to continue as a going concern as described in Note 1 to the consolidated
financial statements) included therein and incorporated herein by reference, and
is included in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
The consolidated financial statements and schedules included in this
prospectus and elsewhere in the registration statement, to the extent and for
the periods indicated in their report, has been audited by Arthur Andersen LLP,
independent public accountants, and is included herein in reliance upon the
authority of said firm as experts in giving said reports. Reference is made to
said report, which includes an explanatory paragraph with respect to the
uncertainty regarding the Company's ability to continue as a going concern as
discussed in Note 15 to the consolidated financial statements .
Page 25
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following sets forth the costs and expenses, all of which shall be
borne by the Registrant, in connection with the offering of the shares of Common
Stock pursuant to this Registration Statement:
Securities and Exchange Commission Fee........... $5,584
Accounting Fees and Expenses*.................... $30,000
Legal Fees and Expenses*......................... $25,000
Printing Costs*.................................. $2,000
Miscellaneous Expenses*.......................... $2,000
------
Total.................................... $64,584
=======
---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) As permitted by the Delaware law, the Registrant's amended and
restated certificate of incorporation eliminates the liability of directors to
the Registrant or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent otherwise required by Delaware law. The
Registrant also carries directors and officers liability insurance.
(b) The Registrant's amended and restated certificate of incorporation
provides that the Registrant will indemnify each person who was or is made a
party to any proceeding by reason of the fact that such person is or was its
director or officer against all expense, liability and loss reasonably incurred
or suffered by such person in connection therewith to the maximum extent
authorized by Delaware law. The Registrant's bylaws provide for a similar
indemnity to its directors and officers to the fullest extent authorized by
Delaware law.
(c) The Registrant has entered into indemnification agreements with each
of its directors and officers providing for the indemnification of its directors
and officers against any and all expenses, judgments, fines, penalties and
amounts paid in settlement, to the fullest extent permitted by law.
ITEM 16. EXHIBITS.
4.1 Common Stock Subscription Agreement dated March 29, 2001 between the
Company and the investors thereto.*
4.2 Form of Warrant to Purchase Common Stock issued pursuant to the
Common Stock Subscription Agreement.*
4.3 Form of Warrant to Purchase Common Stock issued to Roth Capital
Partners, Inc.*
5.1 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.*
23.1 Consent of Arthur Andersen LLP, independent public accountants.
23.2 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in
Exhibit 5.1).*
23.3 Consent of Ernst & Young, LLP, independent auditors.
24.1 Power of Attorney (included on signature page).*
* Previously Filed.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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.
(c) 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 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant 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 Registrant will, unless in the opinion of
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 Act and will be governed by the final
adjudication of such issue.
(d) (1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new
Page ii
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.
Page iii
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it has met
all of the requirements for filing on Form S-3 and has caused this Amendment No.
4 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Irvine, State of California, on the
6th day of May, 2002.
INTERPLAY ENTERTAINMENT CORP.
By: /S/ HERVE CAEN
-------------------------------------
Herve Caen, Chief Executive Officer
and President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 4 to Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE
/S/ HERVE CAEN Chief Executive Officer, President May 6, 2002
- -----------------------------
Herve Caen and Director
(Principal Executive Officer)
* Chief Financial Officer May 6, 2002
- -----------------------------
Jeffrey Gonzalez (Principal Financial Officer and
Principal Accounting Officer)
* Director May 6, 2002
- -----------------------------
Eric Caen
* Director May 6, 2002
- -----------------------------
Nathan Peck
* Director May 6, 2002
- -----------------------------
Michel Henri Vulpillat
* Director May 6, 2002
- -----------------------------
Michel Welter
Director May 6, 2002
- -----------------------------
Parker Jones
* Director May 6, 2002
- -----------------------------
Maren Stenseth
* /S/ HERVE CAEN
---------------------------
Herve Caen
As Attorney In Fact
Page iv
EXHIBIT INDEX
Exhibit
Number Description
4.1 Common Stock Subscription Agreement dated March 29, 2001 between
the Company and the investors thereto. *
4.2 Form of Warrant to Purchase Common Stock issued pursuant to the
Common Stock Subscription Agreement.*
4.3 Form of Warrant to Purchase Common Stock issued to Roth Capital,
Partners, Inc.*
5.1 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.*
23.1 Consent of Arthur Andersen LLP, independent public accountants.
23.2 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included
in Exhibit 5.1).*
23.3 Consent of Ernst & Young, LLP, independent auditors.
24.1 Power of Attorney (included on signature page).*
* Previously Filed.
Page i