AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 30, 1999
REGISTRATION NO. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THINK NEW IDEAS, INC.
(name of small business issuer in its charter)
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<TABLE>
<CAPTION>
DELAWARE 7389 95-4578104
<S> <C> <C>
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
45 WEST 36TH STREET
NEW YORK, NEW YORK 10018
(212) 629-6800
(address and telephone number of principal executive offices)
45 WEST 36TH STREET
NEW YORK, NEW YORK 10018
(address of principal place of business or intended principal place of business)
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RONALD BLOOM
CHIEF EXECUTIVE OFFICER
THINK NEW IDEAS, INC.
45 WEST 36TH STREET
NEW YORK, NEW YORK 10018
(212) 629-6800
(name, address and telephone number of agent for service)
COPIES TO:
VICTORIA A. BAYLIN, ESQ.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
1333 NEW HAMPSHIRE AVENUE, N.W., SUITE 400
WASHINGTON, D.C. 20036
(202) 887-4000
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Approximate date of proposed sale to the public: As soon as practicable 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. [_]
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CALCULATION OF REGISTRATION FEE
- ------------------------------------------ ------------- ------------------------ -------------------------- ----------------------
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE PER SHARE OFFERING PRICE REGISTRATION FEE
- ------------------------------------------ ----------- ------------------------ -------------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 par value per share. 1,681,977 $15.50(1) $26,070,644(1) $7,248
</TABLE>
(1) The price of $15.50 per share, which was the average of the high and low
prices of the common stock of Think New Ideas, Inc. reported on The NASDAQ
National Market System(TM) on June 29, 1999, is set forth solely for the
purpose of calculating the registration fee in accordance with Rule 457(c)
of the Securities Act.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
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SUBJECT TO COMPLETION, DATED JUNE 30, 1999
PROSPECTUS
[LOGO]
THINK NEW IDEAS, INC.
1,681,977 Shares of Common Stock
These shares of common stock are being offered and sold from time to time
by two of our current stockholders. We issued the shares, or reserved the shares
for issuance, to the selling stockholders in connection with an investment that
the selling stockholders made in THINK in March 1999.
The selling stockholders may sell the shares from time to time at fixed
prices, market prices, prices computed with formulas based on market prices or
at negotiated prices and may engage a broker or dealer to sell the shares. For
additional information on the selling stockholders' possible methods of sale,
you should refer to the section of this prospectus entitled "Plan of
Distribution" on page 16. We will not receive any proceeds from the sale of the
shares by the selling shareholders.
This prospectus also covers such additional shares of common stock as may
be issuable to the selling stockholders in the event of a stock dividend, stock
split, recapitalization or other similar change in the common stock.
Our common stock trades on the NASDAQ National Market under the symbol
"THNK." The last reported sale price of common stock on June 29, 1999 was
$15.9375 per share.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 2.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is June 30, 1999
The information in this prospectus is not complete and may change. Neither Think
New Ideas, Inc. nor the selling stockholders may sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell securities and neither Think
New Ideas, Inc. nor the selling stockholders are soliciting offers to buy these
securities in any state that does not permit that offer or sale.
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. NEITHER WE
NOR THE SELLING STOCKHOLDERS ARE MAKING AN OFFER OF THESE SECURITIES IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION PROVIDED BY THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN
THE DATE ON THE FRONT OF THIS PROSPECTUS.
TABLE OF CONTENTS
Think New Ideas, Inc. 1
Corporate Information 2
Recent Developments 2
Risk Factors 2
Forward-Looking Statements 14
Selling Stockholders 15
Plan of Distribution 16
Use of Proceeds 18
Legal Matters 18
Experts 18
Where You Can Get More Information 18
Incorporation of Documents by Reference 19
(i)
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THINK NEW IDEAS, INC.
THINK is a leading provider of integrated marketing, communications and
technology solutions enabling Fortune 1000 and other sophisticated clients to
utilize the internet and other interactive technologies to enhance their
competitive position. We focus on identifying opportunities for companies to
restructure their marketing and distribution strategies around interactive
technologies and implementing creative solutions to deliver their messages with
the greatest impact. Our solutions include various technological features
containing customized interactive applications, e-commerce and e-catalog
technology, consumer modeling and response technology and database development.
We approach each client engagement utilizing our standard methodology, the THINK
Vision Process. Through this process, THINK consultants research a client's
business to determine the effectiveness of existing communications programs and
how such programs may be improved and integrated into an interactive strategy
that helps the client gain a competitive advantage in a changing business
landscape.
Founded in 1996, we have grown to include eight offices, employing
approximately 400 professionals. We currently operate an international network
of offices with headquarters in New York City and regional offices in Los
Angeles, San Francisco and Torrance, California; Seattle, Washington; Boston,
Massachusetts; Atlanta, Georgia; and London, England. We provide our integrated
solutions through multi-disciplinary teams with creative, consulting and
technological expertise combining the best practices from our network of
offices.
THE THINK SOLUTION: STRATEGIC INTEGRATION
THINK integrates its core expertise in marketing, business processes and
technology to provide integrated solutions enabling Fortune 1000 and other
sophisticated clients to enhance their competitive position by determining and
implementing their business strategies, building brand awareness and effectively
communicating information to their internal and external constituents. We
integrate our core expertise through a standardized process that begins with
strategic planning and consulting and continues through implementation and
post-implementation review and maintenance.
MARKETING EXPERTISE
Our marketing expertise helps clients identify their customers and other
target audiences, defines the process of communicating to those audiences and
analyzes the results of those communications. We apply our marketing expertise
to each integrated solution that includes extending, enhancing and developing
brands, designing corporate and product brand networks, integrating and
developing media programming and acquiring and retaining customers.
BUSINESS EXPERTISE
Our expertise in business processes helps our clients improve the entire
value chain of their businesses, from lead generation, consumer education, order
relationship management, supply chain management and inventory procurement to
the manufacturing and delivery of finished goods. We develop client-side
assessment and participation, strategy development and specification
documentation to incorporate the business process into each client's global
strategy.
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TECHNOLOGY EXPERTISE
Our technology expertise provides us with the ability to design, develop
and implement integrated marketing and communications technology solutions.
THINK is "technology agnostic," which allows us to develop secure, flexible and
innovative solutions across a wide range of networking and telecommunications
environments using third-party as well as proprietary technologies. Our
technology expertise encompasses multiple system architectures, programming
languages, broadband technologies, digital media applications and communication
networks utilizing internet, intranet and extranet technologies.
CORPORATE INFORMATION
Our executive offices are located at 45 West 36th Street, New York, NY
10018. Our telephone number is (212) 629-6800. Our website is www.thinkinc.com.
Information contained in our website is not part of this prospectus.
RECENT DEVELOPMENTS
On June 24, 1999, we entered into an agreement and plan of merger with
AnswerThink Consulting Group, Inc. ("AnswerThink") pursuant to which AnswerThink
plans to acquire us. The stock-for-stock pooling-of-interests transaction, in
which our stockholders will receive 0.70 shares of AnswerThink common stock for
each share of THINK common stock, is expected to close in the fall of 1999,
subject to various conditions, including customary regulatory approvals and
approval by our stockholders. For a more complete discussion of this
transaction, please refer to THINK's current report on Form 8-K dated June 30,
1999 which is incorporated by reference.
RISK FACTORS
A purchase of our common stock involves risk. We list below some risks that
could harm our business, financial condition, operating results and stock price.
Other risks that we cannot now foresee might also hurt us. You should carefully
consider these factors and the other information in this prospectus in
evaluating THINK and deciding whether to purchase our common stock.
OUR FUTURE PROFITABILITY IS UNCERTAIN DUE TO CONTINUING OPERATING LOSSES
AND OUR LIMITED HISTORY OF COMBINED OPERATIONS
THINK was formed in January 1996, completed the acquisition of various
companies that formed its initial core business in June 1996 and has grown since
its inception both through acquisitions and, to a lesser extent, internal
growth. Although certain of the acquired businesses have been in operation for
some time, we have a limited history of combined operations. Consequently, the
historical and financial information contained in this prospectus may not be
indicative of our future financial condition and performance. We experienced
operating losses in each of the fiscal quarters ended September 30, 1998,
December 31, 1998 and March 31, 1999. For the nine months ended March 31, 1999,
we had an accumulated deficit of approximately $39,958,000. Future operating
results will depend on many factors, including:
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o the demand for our services;
o our ability to maintain our client relationships and perform services
for new clients;
o our ability to integrate successfully the many diverse businesses we
have acquired;
o our success in attracting and retaining qualified personnel; and
o our ability to respond to competitive developments.
COMPETITION COULD RENDER OUR SERVICES UNCOMPETITIVE
The market for our services is highly competitive and is characterized by
pressures to incorporate new capabilities and accelerate job completion
schedules. We face competition from a number of sources, including specialized
and integrated marketing and communication firms, information technology
consulting firms and national and regional advertising agencies. In addition,
many national advertising agencies have internally developed or acquired new
media capabilities. New competitors have also emerged that either provide
integrated or specialized services (e.g., corporate identity and packaging,
advertising services or web site design) or are technologically proficient,
especially in the new media arena. Many of our competitors or potential
competitors have longer operating histories, longer client relationships and
significantly greater financial, management, technology, development, sales,
marketing and other resources than we have.
Our business has moderately low barriers to entry. We have no technology
that would preclude or inhibit competitors from entering our market. We expect
that we will face additional competition from new market entrants. Existing or
future competitors may develop or offer marketing communication services and
products that provide significant performance, price, creative or other
advantages over those offered by us, which could have a material adverse effect
on our business, financial condition and results of operations.
WE MAY NOT BE ABLE TO MANAGE SUCCESSFULLY THE RISKS ASSOCIATED WITH OUR
EXPANSION
Our business has grown rapidly in recent periods and our customer base has
expanded significantly. In fiscal 1998, fiscal 1999 and through the date of this
prospectus, we have
o acquired companies with offices in Boston, Massachusetts; Seattle,
Washington; San Francisco and Torrance, California; Atlanta, Georgia;
Sofia, Bulgaria; and London, England; and
o continued the integration of several companies into one corporate
organization.
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We expect that the number of our employees will continue to grow and that
both existing and new management personnel will increase their responsibilities.
Our success depends on the ability of our executive officers and other members
of senior management to operate effectively, both independently and as a group.
This continued growth is expected to continue to strain our existing
operational, financial and management information systems.
Additionally, we have only two offices outside of the United States and
have little experience in managing an international network of consulting
offices and marketing services to international clients.
There are also certain risks inherent in doing business on an international
level. These risks include:
o unexpected changes in regulatory requirements;
o export and import restrictions;
o tariffs and other trade barriers;
o difficulties in staffing and managing foreign operations;
o potentially adverse differences in business customs, practices, and
norms;
o longer payment cycles;
o problems in collecting accounts receivable;
o political instability;
o fluctuations in currency exchange rates;
o software piracy;
o seasonal reductions in business activity; and
o potentially adverse tax consequences.
One or more of these factors may materially adversely affect our future
international operations and, consequently, our business, results of operations
and financial condition.
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In addition, we plan to expand our offerings of integrated marketing
communication services and products. There can be no assurance, however, that we
will be successful in identifying new services or products that will be
attractive to clients or that such services or products will ultimately generate
revenues in excess of the costs of introducing them. Difficulties in recruiting
and assimilating new personnel, enhancing our financial and operational controls
and expanding our marketing and customer support capabilities may impede our
ability to pursue our growth strategy. We may be unable to manage our recent or
any future expansions effectively. Any inability to do so would have a material
adverse effect on our business, financial condition and results of operations.
In addition, we may be unable to sustain the rates of growth that we have
experienced in the past.
Further, as part of our business strategy, we have been acquiring companies
in businesses that are complementary to our lines of business. Such acquisitions
are accompanied by risks encountered when acquiring businesses, including:
o difficulty in assimilating the operations and personnel of the
acquired businesses;
o potential disruptions in our ongoing business;
o difficulty in maintaining uniform standards, controls, procedures and
policies; and
o the impairment of relationships with our employees and clients as a
result of the integration of new management personnel.
We have eliminated and are continuing to eliminate portions of the
businesses that we have acquired that no longer fit our business model.
Consequently, our prior acquisitions may have a material adverse effect on our
business, financial condition and results of operations.
OUR TRANSITION FROM PROVIDING TRADITIONAL ADVERTISING SERVICES TO PROVIDING
INTERACTIVE MARKETING AND CONSULTING SERVICES MAY PROVE UNSUCCESSFUL
For the nine (9) months ended March 31, 1999, traditional advertising
clients accounted for thirty percent (30%) of our net revenues. The success of
our transition into the interactive marketing and communication services sector
cannot be certain. This market is characterized by extremely rapid change in
technologies and in client requirements. Our reliance on this sector could
materially affect our business, results of operations and financial condition.
WE ARE SUSCEPTIVE TO GENERAL ECONOMIC CONDITIONS
Our revenues and results of operations will be subject to fluctuations
based upon the general economic conditions. If there were to be a general
economic downturn or a recession in the United States, then we expect that
business enterprises, including our clients and potential clients, will
substantially and immediately reduce their advertising and marketing budgets. In
the event of such an economic downturn, there can be no assurance that our
business, operating results and financial condition would not be materially and
adversely affected.
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OUR QUARTERLY OPERATING RESULTS AND MARGINS MAY CONTINUE TO FLUCTUATE
Our quarterly operating results have fluctuated in the past and may
fluctuate in the future as a result of a variety of factors, including:
o the timing of the completion or cancellation of, or a material
reduction in, major projects;
o the loss of a major client;
o the timing of the receipt of new business;
o the timing of the hiring or loss of personnel;
o the timing of the opening or closing of an office;
o the relative mix of high margin creative projects as compared to lower
margin production projects;
o changes in the pricing strategies or business model of THINK or its
competitors;
o capital expenditures and other costs relating to the expansion of
operations; and
o other factors that are outside of our control.
Operating results could also be materially adversely affected by increased
competition in our markets. Our operating margins may fluctuate from quarter to
quarter depending on the relative mix of lower cost, full time employees as
compared to higher cost, independent contractors.
We experience some seasonality in our business which results from timing of
product introductions and business cycles of our clients. Our revenues may be
somewhat higher during certain quarters of our fiscal year reflecting the trends
of our clients preparing marketing campaigns for products launched in
anticipation of fall trade shows and the holiday season. As a result of the
foregoing and other factors, we anticipate that we may experience material and
adverse fluctuations in future operating results on a quarterly or annual basis.
Therefore, we believe that period to period comparisons of our revenues and
operating results are not necessarily meaningful and that such comparisons
cannot be relied upon as indicators of future performance.
DEPENDENCE ON KEY ACCOUNTS
Our four largest clients accounted for twenty-seven percent (27%) of our
revenues for the eleven months ended May 31, 1999, with fluctuations in the
amount of revenue contribution from each such client from quarter to quarter.
Our two largest clients during the eleven months ended May 31, 1999, each
accounted for approximately seven percent (7%) of our revenues during the
period. Since our clients generally retain us on a project by project basis, a
client from whom we generate substantial revenue in one period may not be a
substantial source of revenue in a subsequent period. To the extent that our
major clients do not remain a significant source of revenues, and we are unable
to replace these clients, there could be a direct and immediate material adverse
effect on our business, financial condition and operating results. Our typical
project lasts from two to four weeks in the case of smaller projects and up to
five months in the case of larger projects. Once a project is completed there
can be no assurance that a client will engage us for further services. In
addition, our clients may unilaterally reduce their use of our services or
terminate existing projects without penalty. The termination of our business
relationship with any of our significant clients or a material reduction in the
use of our services by a significant client would have a material adverse effect
on our business, financial condition and operating results.
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WE RELY ON OUR PROPRIETARY TECHNOLOGIES
THINK regards certain of its products and technologies, including its
software applications, as proprietary. THINK relies upon a combination of
trademark, copyright and trade secret law, together with non-disclosure and
invention assignment agreements, to establish and protect its proprietary
rights. Much of our proprietary information may not be patentable, and THINK
does not currently possess any patents. Our current intellectual property rights
may not afford meaningful protection and our competitors may independently
develop technologies that are substantially equivalent or superior to our
technologies. Others may infringe our proprietary rights or assert claims that
THINK's technologies infringe their proprietary rights. Litigation concerning
the alleged violation of intellectual property rights is inherently uncertain
and could result in significant costs to THINK, even if any such claims are not
valid.
OUR BUSINESS IS SUBJECT TO RAPID TECHNOLOGICAL CHANGE
The market for marketing and communication services is characterized by
rapid technological change, changes in user and client requirements and
preferences, frequent new product and service introductions and evolving
industry standards and practices. Any of these factors could render our existing
service practices and methodologies obsolete. Our success will depend, in part,
on our ability to improve our existing services, develop new services and
solutions that address the increasingly sophisticated and varied needs of our
current and prospective clients. We may not respond quickly, cost-effectively or
sufficiently to these developments. If we are unable, for technical, financial
or other reasons, to adapt in a timely manner in response to changing market
conditions or client requirements, our business, results of operations and
financial condition would be materially adversely affected.
OUR INTERNET INFRASTRUCTURE IS VULNERABLE
We currently operate servers and maintain Internet connectivity from many
of our offices. Although THINK has implemented network security measures, such
as limiting physical and network access to its routers, THINK's Internet
infrastructure could be vulnerable to computer viruses, break-ins and similar
disruptive problems. Computer viruses, break-ins or other security problems
could lead to interruption, delays or cessation in service to THINK's Internet
customers. Further, inappropriate use of the Internet could also potentially
jeopardize the security of confidential information stored in the computer
systems of THINK's customers and other entities connected to the Internet. This
may deter customers and give rise to potential liability to users whose security
or privacy has been infringed.
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OUR COMPUTER SYSTEMS AND EQUIPMENT COULD FAIL
Our success depends on our ability to deliver high quality, uninterrupted
internet hosting. Therefore, we must protect our computer equipment and the
information stored in our servers against damage by fire, natural disaster,
power loss, telecommunications failures, unauthorized intrusion and other
catastrophic events. Any damage or failure that causes interruptions in our
operations could have a material adverse effect on our business, results of
operations and financial condition. In particular, a failure at our New York
office, if prolonged, could result in reduced revenues, loss of customers and
damage to our reputation. We have an aggressive and stable back-up plan that
encompasses daily full backups of all server platforms - both inter-company and
hosting devices. We have contracted an off-site storage vendor to store the
backup off-site in an elements-proof storage facility outside the New York City
area. This rotation occurs on a weekly basis. We have the ability to retrieve at
any time the data back onsite if a need to do so should ever arise. This
facility also provides multiple network environments if ever the need arose to
duplicate a server at their location due to the inability to do so at THINK
(fire, flood, etc.). The automated backup process is accessible by only the most
senior members of our corporate technology services department. Any of these
events could have a material adverse effect on our business, results of
operations and financial condition. Although we carry property and business
interruption insurance to cover our operations, the coverage may not be adequate
to compensate the losses that may occur.
OUR FIXED-PRICE CONTRACTS INVOLVE FINANCIAL RISK
We generate most of our project revenues on a fixed fee-for-service basis.
We assume greater financial risk on fixed-price type contracts than on either
time-and-material or cost-reimbursable contracts. Failure to document the
project properly, anticipate technical problems, estimate costs accurately or
control costs during performance of a fixed-price contract may reduce our profit
or cause a loss. However, if we do not accurately anticipate the progress of a
number of significant revenue-generating projects, our business, results of
operations and financial condition could be materially adversely affected.
WE MAY HAVE CONFLICTS OF INTEREST
Conflicts of interest are inherent in certain segments of the marketing
communications industry, particularly in advertising. THINK has in the past and
will in the future be unable to pursue potential advertising and other
opportunities because such opportunities will require THINK to provide services
to direct competitors of existing THINK clients. In addition, THINK risks
alienating or straining relationships with existing clients each time THINK
agrees to provide services to indirect competitors of existing THINK clients.
Conflicts of interest may jeopardize the stability of revenues generated from
existing clients and preclude access to business prospects, either of which
developments could have a material adverse effect on THINK's business, financial
condition and results of operations.
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WE MAY BE SUBJECT TO LEGAL LIABILITY TO OUR CLIENTS
Many of our consulting engagements involve the development, implementation
and maintenance of applications that are critical to the operations of our
clients' businesses. Our failure or inability to meet a client's expectations
could injure our business reputation or result in a claim for substantial
damages against us, whether or not we are responsible for such failure. We
attempt to limit contractually our damages arising from negligent acts, errors,
mistakes or omissions in rendering our services. These contractual protections
may not, however, be enforceable in all instances and may not otherwise fully
protect us from liability for damages. We maintain general liability insurance
coverage, including coverage for errors and omissions. Nevertheless, this
coverage may not continue to be available on reasonable terms and may not be
available in amounts sufficient to cover one or more large claims. In addition,
the insurer may disclaim coverage as to any future claim. Our business, results
of operations and financial condition may be materially adversely affected if
one or more large claims are asserted against us that are uninsured, exceed
available insurance coverage or result in changes to our insurance policies,
including premium increases.
LOSS OF KEY MANAGEMENT PERSONNEL COULD ADVERSELY AFFECT OUR BUSINESS
THINK's operations depend on the continued efforts of its senior
management, including Ronald Bloom, THINK's chairman and chief executive
officer. Mr. Bloom performs significant marketing, sales and product development
functions. The loss of the services of any of THINK's officers could be
detrimental to THINK. Mr. Bloom and certain other members of senior management
have entered into employment agreements with THINK. Several of these agreements
contain noncompete provisions that may not be enforceable in certain states.
Qualified employees are in great demand and are likely to remain a limited
resource for the foreseeable future. Competition for skilled creative and
technical talent is intense. THINK may not be successful in attracting and
retaining such personnel. In addition, our ability to generate revenues relates
directly to the number and expertise of the personnel that are available to work
on our projects. Any failure by THINK to retain existing employees or to hire
new employees when necessary could have a material adverse effect upon THINK's
business, financial condition and results of operations.
IMPACT OF YEAR 2000
We are currently working to evaluate and resolve the potential impact of
the Year 2000 ("Y2K") on our processing of date sensitive information and
network systems. The Y2K issue is the result of computer programs being written
using two digits, rather than four, to define the applicable year. Any of our
computer programs that have date sensitive software may cause system failures or
miscalculations if data entry of "00" is recognized as the year 1900 rather than
2000. We have instituted a plan to assess our state of readiness for Y2K, to
remediate those systems that are non-compliant and to ensure that material third
parties will be Y2K compliant.
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STATE OF READINESS. We are assessing all mainframe, operating and
application systems for Y2K readiness, giving highest priority to those
information technology ("IT") systems that are considered critical to our
business operations. At present, approximately eighty percent (80%) of our IT
systems have been remediated. Our primary focus is the state of readiness of the
Internet infrastructure and working with the Internet Engineering Task Force (of
which we are a member), Cisco Systems and Worldcom to ensure mitigation of risk
with redundant and Y2K compliant infrastructure. We addressed our state of
readiness and expect our systems to be Y2K compliant during calendar 1999.
Extensive testing of the remediated systems will be performed throughout 1999
for implementation during the year.
We have completed an inventory of non-systemic "desktop" applications, in
order to assess these end-user applications for Y2K readiness. A questionnaire,
project plan, and database of remediated desktop applications, prepared by those
offices that have already completed Y2K assessments, will be leveraged by other
company locations where this work is still ongoing. Our assessment of all
end-user applications will be completed during calendar 1999.
We have compiled an inventory of our non-IT systems, which includes those
systems containing embedded chip technology commonly found in buildings and
equipment connected with a building's infrastructure. These systems are now
being prioritized and assessed for compliance. Preliminary investigations of the
embedded chip systems indicate that Y2K will not effect systems such as heating,
ventilation, and security. On-going testing and implementation of any
remediation required for the non-IT systems will be completed by the end of
September 1999.
MATERIAL THIRD PARTIES. Key clients, vendors and service providers have
been identified, and management has provided them with the tools needed to
perform their Y2K compliance initiatives. To the extent problems are identified,
we will implement corrective procedures where necessary, then test the
applications for Year 2000 compliance. We expect to complete this project by
January 1, 2000. Because our computer systems are state of the art, no hardware
upgrade will be required.
We have begun a formal audit of all application systems developed and
maintained for clients, including systems that interface with client IT systems
or the IT systems of client enlisted service providers and vendors. Highest
priority for remediation will be given to those client systems that are
considered critical to client business operations or to our material maintenance
commitment to each client. Our assessment of client systems will be completed
during calendar 1999. Extensive testing of the remediated systems will be
performed throughout 1999 for implementation during the year.
Y2K COSTS. We are utilizing both internal and external resources to address
the Y2K issue. Internal resources reflect the reallocation of IT personnel to
the Y2K project from other IT projects. In the opinion of management, the
deferral of such other projects will not have a significant adverse effect on
continuing operations. Based on preliminary data, our estimate is that the Y2K
effort will have a nominal cost impact on our results of operations or financial
condition, although we can make no assurance as to the ultimate cost of the Y2K
effort or the total cost of information systems. Such costs will be expensed as
incurred except for the purchase or lease of capital equipment. We expect to
make some of the necessary modifications through our ongoing investment in
system upgrades. We believe that our exposure to this issue, based on our
internal systems, is limited by the fact that substantially all of our existing
systems have been purchased or replaced after 1996.
10
<PAGE>
As of March 31, 1999, we had incurred nominal costs in respect to our Y2K
conversion effort. We have not deferred any other information systems project
due to the Y2K efforts. We expect that the source of funds for Y2K costs will be
cash on hand. Accordingly, we are devoting the necessary resources to resolve
all significant Y2K issues.
CONTINGENCY PLAN/RISKS. We are in the process of developing contingency
plans for those areas that might be affected by Y2K. Although the full
consequences are unknown, the failure of either our critical systems or those of
our material third parties to be Y2K compliant would result in the interruption
of our business, which could have a material adverse effect on the results of
our operations or financial condition.
THE MARKET PRICE OF OUR COMMON SHARES MAY BE HIGHLY VOLATILE
The trading price of THINK's Common Stock has been and is expected to
continue to be subject to extreme fluctuations. This may result from
business-related issues such as:
o quarterly variations in operating results;
o the timing of commencement or completion of client projects;
o reductions or increases in client spending on marketing and
communication services;
o announcements or new services or business acquisitions by THINK or its
competitors; or
o the gain or loss of client accounts.
This may also result from stock market-related influences, such as:
o changes in estimates of securities analysts;
o the presence or absence of short-selling of THINK's common stock; and
o events affecting other companies that the market deems to be
comparable to THINK.
In addition, the stock market has from time to time experienced extreme
price and volume fluctuations that have particularly affected the market price
of many technology-oriented companies and that often have been unrelated or
disproportionate to the operating performance of these companies. These broad
market fluctuations may adversely affect the market price of THINK's common
stock. As a result, the trading price of our common stock may not remain at or
near its current level.
11
<PAGE>
FUTURE SALES OF COMMON STOCK COULD DILUTE THE OUTSTANDING COMMON SHARES AND
THEREBY CAUSE OUR STOCK TO DECLINE
Existing stockholders can sell outstanding shares of common stock and
shares that may be issued on exercise of outstanding options and warrants under
Rule 144 of the Securities Act or through the exercise of outstanding
registration rights. These sales, or the perception that these sales could
occur, could have an adverse effect on the price of our common stock. In
addition to the 1,681,977 shares of common stock offered hereby, shares of
common stock will be eligible for sale in the public market under Rule 144 based
on THINK's obligation to make certain earnout payments in connection with our
previous acquisitions or with the acceleration of earnout payments pursuant to
the agreement and plan of merger between THINK and AnswerThink Consulting Group,
Inc.
ANTI-TAKEOVER PROVISIONS COULD MAKE A THIRD-PARTY ACQUISITION DIFFICULT
THINK's certificate of incorporation authorizes the issuance of up to
5,000,000 shares of preferred stock with such rights and preferences as may be
determined from time to time by our board of directors. Accordingly, our board
of directors may issue shares of preferred stock with dividend, liquidation,
conversion, voting or other rights without stockholder approval. This could
adversely affect the voting power or other rights of the holders of common
stock. Although we do not currently intend to issue any shares of preferred
stock, we may do so in the future.
In addition, our certificate of incorporation and bylaws contain provisions
that may discourage certain transactions involving an actual or threatened
change in control of THINK. The bylaws prescribe the manner in which stockholder
proposals may be presented for consideration at meetings of stockholders. THINK
is also subject to a Delaware statute regarding business combinations. Any of
these provisions may make it more difficult, or discourage an acquisition or
change in control of THINK.
WE DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE
THINK has not paid any dividends on its common stock since its
incorporation. THINK anticipates that, for the foreseeable future, working
capital and earnings, if any, will be retained for use in THINK's business
operations and in the expansion of its business.
RISKS RELATING TO THE ANSWERTHINK MERGER
On June 24, 1999, we entered into an agreement and plan of merger with
AnswerThink Consulting Group, Inc. We expect to close the merger in the fall of
1999. The closing is subject to conditions, including customary regulatory
approvals, approval by our stockholders and AnswerThink's stockholders. There
are numerous risks associated with the AnswerThink transaction:
THE VALUE OF THE ANSWERTHINK COMMON STOCK OUR STOCKHOLDERS WILL RECEIVE IN
THE MERGER COULD BE REDUCED IF THE MARKET VALUE OF ANSWERTHINK'S COMMON STOCK
DECREASES.
When we complete the merger, each share of our common stock will be
exchanged for 0.70 of a share of AnswerThink common stock. This exchange ratio
is fixed and will not be adjusted if the market price of AnswerThink's common
stock changes. Before the merger's closing, if AnswerThink's stock price
decreases, our stockholders will receive less value for their shares of our
common stock that are exchanged in the merger. Also, we are not permitted to
abandon the merger or resolicit our stockholders' approval solely because of
changes in the market price of AnswerThink common stock. Accordingly, the
specific value of AnswerThink common stock our stockholders will receive upon
the merger's completion may decrease.
WE MAY NOT REALIZE THE MERGER'S POTENTIAL BENEFITS.
We entered into the merger agreement with AnswerThink with the expectation
that the merger will result in benefits and potential cost savings. We can only
achieve these benefits and savings if we can integrate our technology,
operations and personnel timely and efficiently. If we fail to do this, we may
lose customers or key employees. This integration could also divert our
management's attention from operations. Among the challenges involved in this
integration is demonstrating to our customers that the merger will not result in
adverse changes in client service standards or business focus, and persuading
our personnel that our business cultures are compatible. We may not be able to
integrate successfully with AnswerThink and may not be able to realize any of
the merger's anticipated benefits or cost savings. The failure to do so could
impair AnswerThink's finances and business prospects after the merger.
12
<PAGE>
OUR EXECUTIVE OFFICERS AND DIRECTORS HAVE DIFFERENT INTERESTS FROM OUR
SHAREHOLDERS IN CONNECTION WITH THE MERGER.
Our directors and executive officers have interests in the merger and
participate in certain arrangements that are different from, or are in addition
to, those of our stockholders generally. These include continuing
indemnification against certain liabilities. Also, Ronald Bloom, our Chairman
and Chief Executive Officer, will become a director of AnswerThink if the merger
closes. As a result, these directors and executive officers could be more likely
to vote to approve the merger agreement and the merger than if they did not hold
these interests.
WE MAY LOSE RIGHTS UNDER OUR CONTRACTS WITH THIRD PARTIES IF WE DO NOT
OBTAIN CONSENTS AND WAIVERS.
We have contracts with many of our suppliers, customers, licensors,
licensees, and other business partners. Under some of these contracts, we have
to obtain the consent, waiver, or approval of these other parties in connection
with the merger agreement. If we cannot do so, we and AnswerThink may lose the
right to use intellectual property or other rights that are necessary for the
operation of our business. We have agreed to use all reasonable efforts to
secure the necessary consents, waivers and approvals. However, we cannot assure
you that we will be able to obtain all of the necessary consents, waivers, and
approvals. Our failure to do so could impair AnswerThink's finances and business
prospects.
FAILURE TO COMPLETE THE MERGER.
If we do not complete the merger, we may be subject to a number of material
risks, including the following:
o we may be required to pay AnswerThink a termination fee of either $6
million or $3 million, depending on the circumstances;
o an option we granted to AnswerThink to purchase 2,008,288 shares of
our common stock for $18.50 per share may become exercisable; and
o the market price of our common stock may decline to the extent that
its current market price reflects a market assumption that the merger
will be completed.
Also, the public announcement of our failure to complete the merger could have
an adverse effect on:
o our sales and operating results;
o our ability to attract and retain key management, marketing, and
technical personnel; and
13
<PAGE>
o progress of certain development projects.
You should note that we will have to pay the costs related to the merger, such
as legal, accounting, and financial advisor fees, even if we do not close the
merger.
If the merger is terminated and our board of directors determines to seek
another merger or business combination, we cannot assure you that we will be
able to find a partner willing to pay an equivalent or more attractive price
than the merger consideration. In addition, while the merger agreement is in
effect and subject to exceptions, we are prohibited from soliciting, initiating,
knowingly encouraging, or entering into extraordinary transactions such as a
merger, sale of assets, or other business combination with any party other than
AnswerThink. Furthermore, if the merger agreement is terminated and AnswerThink
exercises its option to purchase our common stock, we may not be able to account
for future transactions as a "pooling of interests." Consequently, this
inability to obtain pooling of interests accounting treatment could adversely
affect our ability to enter into future transactions.
FORWARD-LOOKING STATEMENTS
This prospectus contains statements about activities, events or
developments which we expect or anticipate will or may occur in the future,
including:
o business strategies; o acquisitions of assets and businesses;
o industry trends; o financial performance; and
o market potential; o other matters
14
<PAGE>
We also use in this prospectus the words "intend to," "anticipate,"
"expect," and similar expressions to identify those types of forward-looking
statements. These statements are based on certain assumptions and analyses we
have made in light of our perception of historical trends, current business and
economic conditions and expected future developments as well as other factors.
However, whether actual results and developments will conform with our
expectations and predictions is subject to a number of risks and uncertainties
beyond our control, including:
o the risk factors discussed o business opportunities, or lack
in this prospectus; thereof, that may be presented to us; and
o general economic, market o other factors.
or business conditions;
o changes in laws or regulations;
Consequently, we cannot assure you that the actual results or developments
we anticipate will be realized or, even if substantially realized, that they
will have the expected consequences to or effects on us.
SELLING STOCKHOLDERS
The selling stockholders each currently beneficially own approximately 6.8%
of our outstanding common stock. The selling stockholders acquired the shares of
our common stock as well as options and warrants to purchase additional shares
of common stock pursuant to the securities purchase agreement dated March 4,
1999 by and among THINK, Marshall Capital Management, Inc. and Capital Ventures
International. Under the terms of the securities purchase agreement, we sold
871,142 shares of our common stock and warrants to purchase an additional
174,230 shares of our common stock for an aggregate purchase price of $6
million. The securities purchase agreement also gave the selling stockholders
the option, for a one-year period, to purchase up to an additional 530,504
shares of our common stock and warrants to acquire up to 106,101 shares of
common stock for a maximum aggregate purchase price of $5 million.
The table below sets forth as of June 30, 1999:
o the name of each selling stockholder who may sell our common stock
pursuant to this prospectus;
o the number of shares of common stock beneficially owned by such
selling stockholder prior to the offering;
o the number of shares of common stock to be offered by the selling
stockholder pursuant to this prospectus; and
o the number and percentage of shares of common stock to be beneficially
owned by the selling stockholder after the offering.
15
<PAGE>
<TABLE>
<CAPTION>
- ------------------------- ----------------------- ----------------------- ------------------ -----------------
NAME OF SELLING NUMBER OF SHARES NUMBER OF NUMBER OF SHARES PERCENTAGE OF
STOCKHOLDER BENEFICIALLY OWNED SHARES TO BE OFFERED1,2 TO BE SHARES TO BE
PRIOR TO THE BENEFICIALLY BENEFICIALLY
OFFERING1,2 OWNED AFTER OWNED AFTER
OFFERING3 OFFERING3
- ------------------------- ----------------------- ----------------------- ------------------ -----------------
<S> <C> <C> <C> <C>
Capital Ventures 700,823 700,823 0 0
International
- ------------------------- ----------------------- ----------------------- ------------------ -----------------
Marshall Capital 700,823 700,823 0 0
Management, Inc.
- ------------------------- ----------------------- ----------------------- ------------------ -----------------
</TABLE>
1 Beneficial ownership is determined in accordance with rule 13d-3(d)
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended. Shares not outstanding but deemed
beneficially owned by virtue of the right of a person or group to acquire
them within 60 days are treated as outstanding only for purposes of
determining the number of shares and percent owned by such person or group.
2 Neither selling stockholder is entitled to exercise the warrants acquired
or which may be acquired by such selling stockholder under the securities
purchase agreement by and among THINK and the selling shareholders to the
extent that the shares of common stock to be received by the selling
stockholder upon such exercise would cause such selling stockholder to
beneficially own more than 4.99% of our common stock. Therefore, the number
of shares set forth herein and which may be sold by the selling
stockholders pursuant to this prospectus may exceed the number of shares of
common stock such selling stockholder would otherwise beneficially own
pursuant to Section 13(d) of the Exchange Act.
3 Assumes that all shares of our common stock to be offered are sold in the
offering.
PLAN OF DISTRIBUTION
We are registering the shares being offered hereunder in connection with
the securities purchase agreement dated March 4, 1999 by and among THINK,
Marshall Capital Management, Inc. and Capital Ventures International. In
connection with this securities purchase agreement, both we and the selling
stockholders have agreed to indemnify the other against certain liabilities,
including liabilities under the Securities Act.
The selling stockholders (and their respective pledgees, transferees,
donees or other successors in interest) may offer and sell the shares of our
common stock covered by this prospectus from time to time as follows:
o in the open market;
o on the NASDAQ National Market;
16
<PAGE>
o in privately negotiated transactions;
o in an underwritten offering; or
o a combination of such methods or any other legally available means.
Such sales may be made at varying prices determined by reference to, among
other things:
o market prices prevailing at the time of the sale
o prices related to the then-prevailing market price; or
o negotiated prices.
Negotiated transactions may include:
o purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which a broker
solicits purchasers; or
o block trades in which a broker-dealer so engaged will attempt to sell
the shares as agent but may take a position and resell a portion of
the block as principal to facilitate the transaction.
In connection with distributions of our common stock, either selling
stockholder may enter into hedging transactions with broker-dealers and the
broker-dealers may engage in short sales of our common stock in the course of
hedging the positions they assume with the selling stockholders. Either selling
stockholder may also sell our common stock short and deliver the common stock to
close out such short positions. Either selling stockholder may also enter into
option or other transactions with broker-dealers that involve the delivery of
our common stock to the broker-dealers, which may then resell or otherwise
transfer such common stock. Either selling stockholder also may loan or pledge
our common stock to a broker-dealer which may then sell our common stock so
loaned or upon a default may sell or otherwise transfer the pledged common
stock.
Broker dealers may receive commissions or discounts from the selling
stockholders in amounts to be negotiated immediately prior to the sale. The
selling stockholders and any broker executing selling orders on behalf of the
selling stockholders may be deemed to be an "underwriter" within the meaning of
the Securities Act. Commissions received by any such broker may be deemed to be
underwriting commissions under the Securities Act.
17
<PAGE>
USE OF PROCEEDS
The shares of common stock offered through this prospectus are being
registered for the account of the selling stockholders. Accordingly, we will not
receive any proceeds from the sale of the shares of common stock. The principal
reason for this offering is to enable the selling stockholders to resell the
common stock acquired, and to be acquired, under the securities purchase
agreement between THINK, Marshall Capital Management, Inc. and Capital Ventures
International.
LEGAL MATTERS
The validity of the common stock being offered hereby will be passed upon
for us by Akin, Gump, Straus, Hauer, & Feld, L.L.P. of Washington, D.C.
EXPERTS
The consolidated financial statements of THINK New Ideas, Inc.'s Annual
Report (Form 10-KSB) for the year ended June 30, 1998 have been audited by Ernst
& Young L.L.P., independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given on the authority of such firm as experts in accounting and
auditing.
Our consolidated financial statements included or incorporated by reference
in our Annual Report on Form 10-KSB for the year ended June 30, 1997 have been
audited by BDO Seidman L.L.P., independent public accountants, as indicated in
their reports with respect thereto and are incorporated herein on reliance upon
the authority of BDO Seidman as experts in giving said reports.
WHERE YOU CAN GET MORE INFORMATION
We have filed a registration statement with the Securities and Exchange
Commission relating to the offering described in this prospectus. As allowed by
the Securities and Exchange Commission's rules, this prospectus does not contain
all of the information that you can find in the registration statement. You are
referred to the registration statement and the exhibits thereto for further
information. This prospectus is qualified in its entirety by such other
information. A copy of the registration statement, including the exhibits and
schedules thereto, may be inspected without charge at the public reference
facilities of the Securities and Exchange Commission described below, and copies
of such material may be obtained from such office upon payment of the fees
prescribed by the Securities and Exchange Commission.
We file reports, proxy statements and other information with the Securities
and Exchange Commission. Such reports, proxy statements and other information
can be inspected and copied at the public reference facilities maintained by the
Securities and Exchange Commission at the following locations:
18
<PAGE>
Judiciary Plaza New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, NY 10048 Suite 1400
Chicago, IL 60661
Copies of such material can also be obtained from the Public Reference
Section of the Securities and Exchange Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of prescribed rates. Furthermore, the
Securities and Exchange Commission maintains a web site at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Securities and Exchange
Commission.
You may also obtain information on the operation of the Securities and
Exchange Commission's Public Reference Room by calling the Securities and
Exchange Commission at 1-800-SEC-0330.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" information into this prospectus by referring you to another document
filed separately with the Securities and Exchange Commission. The information
incorporated by reference is deemed to be part of this prospectus except for any
information superseded by information in this prospectus. This prospectus
incorporates by reference the documents set forth below that have been
previously filed with the Securities and Exchange Commission. These documents
contain important information about us:
(1) our annual report on Form 10-KSB for the fiscal year ended June 30,
1998;
(2) our quarterly reports on Form 10-QSB for the quarters ended September
30, 1998, December 31, 1998 and March 31, 1999;
(3) our current reports on Form 8-K and 8-KA dated July 13, 1998, August
14, 1998, September 11, 1998, March 12, 1999, March 29, 1999 and June
30, 1999;
(4) our proxy statement for the fiscal 1998 annual meeting of the
stockholders; and
(5) the description of the common stock contained in our registration
statement filed under Section 12 of the Securities Exchange Act on
Form 8-A on November 21, 1996, as incorporated by reference from our
registration statement on Form SB-2 filed on September 26, 1996,
Registration No. 333-12795 and any amendment or report filed for the
purpose of updating such description.
19
<PAGE>
This prospectus also incorporates by reference all documents that may be
filed by us pursuant to Sections 12, 13(a), 13(c) 14 or 15(d) of the Securities
Exchange Act of 1934 between the date of this prospectus and prior to the filing
of a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities remaining unsold. Any
statement contained in this prospectus or in a document incorporated by
reference herein shall be deemed modified or superseded for all purposes to the
extent that a statement contained in this prospectus or in any other document
which is also incorporated by reference herein modifies or supersedes such
statement.
We will provide you, upon your written or oral request, a copy of any and
all of the information that has been or may be incorporated by reference in this
prospectus, excluding any exhibits unless the exhibit is specifically
incorporated by reference into such documents. Your requests should be directed
to Think New Ideas, Inc., Attention: Melvin Epstein, Secretary, 45 W. 36th
Street, 12th Floor, New York, New York 10018. Mr. Epstein's telephone number is
(212) 629-6800.
20
<PAGE>
1,681,977 SHARES
[LOGO]
THINK NEW IDEAS, INC.
COMMON STOCK
---------------
PROSPECTUS
---------------
June 30, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be incurred by THINK in connection with the
issuance and distribution of the securities being registered pursuant to this
registration statement, other than underwriting discounts and commissions, are
estimated as follows:
SEC Registration Fee.......................................... $ 7,248
Listing Fees.................................................. $ 0
Printing Expenses............................................. $ 0
Legal Fees and Expenses....................................... $25,000
Accountant's Fees and Expenses................................ $ 1,000
Miscellaneous Expenses........................................ $ 500
----------
Total......................................................... $33,748
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law empowers a corporation
to indemnify its directors and officers and to purchase insurance with respect
to liability arising out of their capacity or status as directors and officers
provided that this provision shall not eliminate or limit the liability of a
director:
o for any breach of the director's duty of loyalty to the corporation or
its stockholders;
o for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
o arising under Section 174 of the Delaware General Corporation Law; or
o for any transaction from which the director derived an improper
personal benefit.
The Delaware General Corporation Law further provides that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under the
corporation's bylaws, any agreement, vote of stockholders or otherwise.
Article Seven of THINK's Certificate of Incorporation eliminates the
personal liability of directors to the fullest extent permitted by Section
102(b)(7) of the Delaware General Corporation Law.
Article XI of the THINK's Bylaws states that we may advance costs incurred
by officers and directors in their defense of any civil, criminal,
administrative or investigative action or proceeding arising out of their
capacity or status as directors and officers.
The effect of the foregoing is to require us to indemnify our officers and
directors for any claim arising against any such person in their official
capacities if such person acted in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
II-1
<PAGE>
ITEM 16. EXHIBITS
Exhibit No.
4.1 Securities purchase agreement dated March 4, 1999 by and among THINK,
Marshall Capital Management, Inc. and Capital Ventures International
(1)
4.2 Registration rights agreement dated March 4, 1999 by and among THINK,
Marshall Capital Management, Inc. and Capital Ventures International
(1)
5.1 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
23.1 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in
Exhibit 5.1)
23.2 Consent of Ernst & Young, L.L.P., Independent Accountants
23.3 Consent of BDO Seidman, L.L.P., Independent Accountants
24 Power of Attorney (set forth on the signature page hereto)
- --------------------------------------------------------------------------------
(1) Incorporated by reference to the Current Report on Form 8-K, as filed
on March 12, 1999.
ITEM 17. UNDERTAKINGS.
(A) We hereby undertake:
(1) To file, during any period in which we offer or sell securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the Securities
Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
registration statement.
(iii) Include any additional or changed material information on the plan of
distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
II-2
<PAGE>
(B) We hereby undertake to supplement the prospectus, for purposes of
determining any liability under the Securities Act, each filing of our annual
report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities 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 the initial bona fide
offering.
(C) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of THINK to the
foregoing provisions, or otherwise, we have been advised that in the opinion of
the Securities and Exchange 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 THINK of expenses incurred or paid by a director, officer or
controlling person of THINK 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, THINK 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.
II-3
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, THINK
hereby certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing Form S-3 and authorizes this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on June 30, 1999.
Think New Ideas, Inc.
By: /s/ MELVIN EPSTEIN
-------------------
(Melvin Epstein)
Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ronald Bloom, and Melvin Epstein, and each of
them, with full power to act without the other, such person's true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign this registration statement, any and all amendments thereto
(including post-effective amendments), any subsequent registration statements
pursuant to Rule 462 of the Securities Act of 1933, as amended, and any
amendments thereto and to file the same, with exhibits and schedules thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
necessary or desirable to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
In accordance with the requirements of the Securities Act, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Ronald Bloom Chief Executive Officer June 30, 1999
- ---------------------- and Director, (Principal
(Ronald Bloom) Executive Officer)
/s/ Adam Curry Chief Technology Officer and June 30, 1999
- ---------------------- Director
(Adam Curry)
/s/ Melvin Epstein Chief Financial Officer, (Principal June 30, 1999
- ---------------------- Financial and Accounting Officer)
(Melvin Epstein)
/s/ Barry Wagner Director June 30, 1999
- ----------------------
(Barry Wagner)
/s/ Richard Char Director June 30, 1999
- ----------------------
(Richard Char)
/s/ Larry Kopald Chief Creative Officer and Director June 30, 1999
- ----------------------
(Larry Kopald)
/s/ Scott Metcalf Director June 30, 1999
- ----------------------
(Scott Metcalf)
/s/ Ken Orton Director June 30, 1999
- ----------------------
(Ken Orton)
II-4
</TABLE>
Exhibit 5.1
June 30, 1999
Think New Ideas, Inc.
45 West 36th Street
New York, New York 10018
Ladies and Gentlemen:
We have acted as counsel for Think New Ideas, Inc. (the "Company") in
connection with the filing of the registration statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933 (the "Act") covering
871,142 shares of common stock, par value $.0001 per share, of the Company (the
"Shares") and 810,835 shares of common stock issuable upon exercise of options
and warrants (the "Option and Warrant Shares"), which Shares, options and
warrants were issued pursuant to a Securities Purchase Agreement dated as of
March 4, 1999 by and among the Company and the purchasers party thereto (the
"Agreement").
In connection with this opinion, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of the Registration
Statement and such other documents and records as we deemed necessary. We have
assumed that as of the date of the issuance of this letter (i) the Registration
Statement, and any amendments thereto, will have become effective; and (ii) the
Shares have been and the Option and Warrant Shares will be issued in compliance
with applicable federal and state securities laws.
Based upon the foregoing, in our opinion, the Shares and the Option and
Warrant Shares to be registered under the Registration Statement have been duly
authorized for issuance by the Company, and upon issuance and delivery in
accordance with the Agreement, the Shares and the Option and Warrant Shares will
be validly issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of our name under the caption "Experts." In giving this
consent, we do not admit that we are acting within the category of persons whose
consent is required under Section 7 of the Act.
Very truly yours,
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
Re: THINK New Ideas, Inc.
Registration Statement on Form S-3
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 ) and related Prospectus of THINK New Ideas,
Inc. for the registration of 1,681,977 shares of its common stock and to the
incorporation by reference therein of our report dated August 5, 1998, with
respect to the consolidated financial statements THINK New Ideas, Inc. included
in its Annual Report (Form 10-KSB) for the year ended June 30, 1998, filed with
the Securities and Exchange Commission.
Ernst & Young, L.L.P.
New York, New York
June 30, 1999
Exhibit 23.3
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
THINK New Ideas, Inc.
New York, New York
We hereby consent to the incorporation by reference in the Registration
Statement of THINK New Ideas, Inc. (the "Company") on Form S-8 dated July 17,
1997 and Form S-3 of our report dated September 19, 1997 relating to the
consolidated financial statements and schedules of the Company appearing in the
Company's Annual Report on Form 10-KSB for the year ended June 30, 1997.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
BDO Seidman, LLP
New York, New York
June 30, 1999
