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As Filed With The Securities and Exchange Commission on August 30, 2000
Registration No. 333 - _________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
eUNIVERSE, INC.
(Exact Name of Registrant as Specified in Its Charter)
NEVADA 06-1556248
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.
101 NORTH PLAINS INDUSTRIAL ROAD, WALLINGFORD, CONNECTICUT 06492
(203) 265-6412
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
WILLIAM R. WAGNER
CHIEF FINANCIAL OFFICER
101 NORTH PLAINS INDUSTRIAL ROAD
WALLINGFORD, CONNECTICUT 06492
(203) 265-6412
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
CHRISTOPHER G. MARTIN, ESQ.
MARTIN, LUCAS & CHIOFFI, LLP
1177 SUMMER STREET
STAMFORD, CONNECTICUT 06905
(203) 324-4200
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: The securities
being registered on this form are to be offered and sold from time to time after
the effective date of this registration statement by the selling stockholder.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
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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, 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, check
the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Proposed
Amount Maximum Maximum Amount Of
Title Of Shares To Be Aggregate Price Aggregate Registration
To Be Registered Registered Per Unit(1) Offering Price(1) Fee
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 910,000 $7.6825 $5,454,575 $1,440.00(2)
$.001 par value
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</TABLE>
(1) Fee calculated pursuant to Rule 457(c) of the Securities Act, as amended,
based on the average of the bid and asked prices per share of eUniverse's common
stock, $.001 par value ("Common Stock") as reported on the OTC Bulletin Board on
March 21, 2000.
(2) Pursuant to Rule 429 under the Securities Act, 796,500 of the 910,000 shares
of Common Stock registered under eUniverse's Form S-1 filed on March 23, 2000
(Registration Statement No. 333-33084) are being carried forward to this
registration statement and the filing fee of $1,440.00 that is associated with
such securities was previously paid with the earlier registration statement.
The number of shares to be registered under this registration statement has
been reduced to 796,500 because 113,500 of the shares registered under
eUniverse's Form S-1 filed on March 23, 2000 have already been sold by the
selling stockholder.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933, as amended, or until this registration statement shall
become effective on such date as the Commission, acting pursuant to such section
8(a), may determine.
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PROSPECTUS
August 30, 2000
796,500 SHARES
eUNIVERSE, INC.
COMMON STOCK
($.001 PAR VALUE)
-------------------------
This prospectus relates to the offer and sale by Take-Two Interactive
Software, Inc. of 796,500 shares of eUniverse common stock, $.001 par value
("Common Stock").
eUniverse, Inc. is a Nevada corporation with its principal executive
offices at 101 North Plains Industrial Road, Wallingford, Connecticut 06492.
The Common Stock is listed on the NASDAQ Small Cap Market under the
symbol "EUNI." On August 29, 2000, the last reported sale price of the Common
Stock on the NASDAQ Small Cap Market was $5.00 per share.
The selling stockholder may sell these shares from time to time through
ordinary brokerage transactions in the over-the-counter markets, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale, at
negotiated prices and in certain other ways, as described under "Plan of
Distribution" on page 14. We will not receive any of the proceeds from the sale
of these shares.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS AUGUST 30, 2000.
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AVAILABLE INFORMATION
eUniverse has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 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 which are parts of the
registration statement. For further information with respect to eUniverse and
its common stock, see the registration statement and the exhibits and schedules
thereto. Whenever we make reference in this prospectus to any of our agreements
or other documents, you should refer to the exhibits attached to the
registration statement for copies of the actual agreement or other document.
You can read our Commission filings, including this registration
statement, through a web browser over the Internet at the Commission's web site
at URL:http://www.sec.gov. You may also read and copy any document we file with
the Commission at its public reference facilities in Washington, D.C., New York,
NY, and Chicago, IL at 450 Fifth Street, Washington, D.C. 20549, 7 World Trade
Center, Suite 1300, New York, NY 10048, and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511, respectively. You may also
obtain copies of the documents at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, Washington, D.C. 20549.
Please call the Commission at 1-800-SEC-0330 for further information on the
operation of the public reference facilities.
eUniverse is subject to the information and periodic reporting
requirements of the Securities and Exchange Act and, accordingly, files periodic
reports, proxy statements and other information with the Commission. Such
periodic reports, proxy statements and other information will be available for
inspection and copying at the Commission's public reference room, and the web
site of the Commission referred to above. Our main web site address is
www.euniverse.com.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
eUniverse hereby incorporates by reference in this prospectus the
following documents:
(1) eUniverse's Annual Report on Form 10-K for the year ended March 31, 2000;
(2) eUniverse's Quarterly Report on Form 10-Q for the quarter ended June 30,
2000; and
(3) description of the Common Stock which is contained in eUniverse's
registration statement on Form 10 filed on June 15, 1999 (Registration No.
0-26355) and filed under the Exchange Act of 1934, including amendments and
reports filed for the purpose of updating such description.
In addition, all documents filed by eUniverse pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
prospectus and prior to the termination of the offering made pursuant to the
registration statement shall be deemed to be incorporated by reference into and
to be a part of this prospectus from the date of filing of such documents. Any
statement contained in a document so incorporated by reference shall be deemed
to be modified or superseded for purposes of this prospectus to the extent that
a statement contained in this prospectus, or in any other subsequently filed
document which is also incorporated by reference, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this prospectus except as so modified or superseded.
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eUniverse will provide, without charge, to each person to whom this
prospectus is delivered, upon the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference (not including
exhibits to such documents unless such exhibits are specifically incorporated by
reference in such documents). Requests for copies of such documents should be
directed to the Office of the Secretary, eUniverse, Inc., 101 North Plains
Industrial Road, Wallingford, Connecticut 06492 (telephone number:
203-265-6412).
THE COMPANY
OVERVIEW
eUniverse operates a network of entertainment-related web sites focused
on music, filmed and interactive entertainment. eUniverse's web properties
include CD Universe, an online retailer of music products and accessories; Video
Universe, an online retailer of video cassettes, DVDs and laser discs; and Games
Universe, an online retailer of single and multiplayer computer games. We do not
offer and do not intend to offer online gambling or other activities associated
with gambling.
eUniverse also provides a unique library of proprietary community
building software technologies, named LivePlace. LivePlace combines group
browsing, chat, instant messaging and a host of other advanced features to
introduce social interaction to the web browsing and shopping experience.
Historically, we primarily have generated revenue from merchandise
sales. We have implemented a program to generate advertising revenue through
paid third-party advertising on eUniverse's web sites and licensing revenue from
licensing our LivePlace software to third parties.
MUSIC ENTERTAINMENT
The online store (www.cduniverse.com) of eUniverse's wholly owned
subsidiary, CD Universe, Inc., currently offers Internet customers a selection
of over 240,000 individual CD titles as well as proprietary content and
features. Recently, we established a Japanese version of the CD Universe web
site that markets and sells CDs and related products to Japanese customers.
FILMED ENTERTAINMENT
eUniverse's Video Universe online store (www.videouniverse.com) offers
Internet users a selection of over 40,000 movie titles in videocassette, DVD and
laser disc formats. Additionally, the online store (www.dvdwave.com) of
eUniverse's wholly owned subsidiary, Falcon Ventures Corporation, offers a
selection of over 5,000 DVD titles. This store has recently been combined with
the CD Universe DVD store.
INTERACTIVE ENTERTAINMENT
eUniverse's Games Universe site (www.gamesuniverse.com) sells
interactive computer games and links users to eUniverse's online interactive
gaming sites operated by our subsidiaries, which include
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Case's Ladder (www.casesladder.com), an online portal to a variety of games that
provides competitive rankings for online game players and allows game players to
compete against one another in a variety of tournaments and leagues, Gamer's
Alliance (www.gagames.net), a network of online gaming editorial web sites
devoted to interactive PC games, and The Big Network (www.bignetwork.com), a
site offering classic board and card games (e.g., chess, checkers, backgammon,
spades). eUniverse also operates other entertainment web sites, including:
Pokemonvillage.com, an online community for enthusiasts of Pokemon,
computer/video games, and other collectibles;
JustSayWow.com, and funone.com, web sites that provide online
greetings, cartoons, joke lists and gags. Subscribers can receive weekly jokes
and send fun electronic greetings to their friends;
Forumnation.com, a youth focused web site allowing the users to discuss
a variety of subjects, such as music, comics, and games that are of interest to
them; and
ReserveAuction.com, a site that allows the owners of Pokemon cards,
comics, and other collectibles to meet and auction their items.
EXPANSION
eUniverse intends to continue to broaden and deepen its
entertainment-focused network through acquisition of, and affiliation with,
content-oriented web sites that have experienced high growth in unique monthly
visitors and which have attractive demographics. Concurrently with its
acquisition strategy, eUniverse is actively adding to and improving upon the
existing content and functionality of its web sites.
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING AN
INVESTMENT DECISION. OUR BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS
COULD BE HARMED BY ANY OF THE FOLLOWING RISKS. THE TRADING PRICE OF OUR COMMON
STOCK COULD DECLINE DUE TO ANY OF THE FOLLOWING RISKS, AND YOU MIGHT LOSE ALL OR
PART OF YOUR INVESTMENT.
RISKS RELATED TO OUR BUSINESS
WE ARE IN NEED OF ADDITIONAL FUNDS. eUniverse currently has low balances of cash
reserves and working capital surplus to fund its operations and its ability to
meet its obligations in the ordinary course of business is dependent upon its
ability to raise additional financing through public or private equity
financings, establish profitable operations, enter into collaborative or other
arrangements with corporate sources, or secure other sources of financing to
fund operations. Since March 31, 2000 eUniverse received short term loans of
$2.178 million from new investors. On April 26, 2000, eUniverse received a loan
of $1,000,000 with a maturity date of July 26, 2000, which the lender has agreed
to extend until August 25, 2000. Management intends to raise additional working
capital through additional equity and/or debt financings in the upcoming year
and has entered into a letter of intent to sell 2,500,000 shares of common stock
for $15,000,000 (see Note 16). In
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connection with this pending transaction, the new investor through its
affiliates has made short term loans totaling $1,178,000 with maturity dates of
the earlier of (1) August 31, 2000, (2) the date that the transactions
contemplated in the letter of intent are consummated or (3) several earlier
dates in the event that certain other transactions are not completed during the
interim period. The investors have certain preferred conversion rights in the
event of a default under their respective promissory notes. The cash from these
short term loans have been and are to be used principally to finance working
capital requirements. As additional consideration for the loans made by the
affiliates of the new investor, eUniverse, in exchange for up to $75,000,
assigned its right to purchase up to 850,000 shares of Common Stock from Charles
Beilman at an exercise price of $1.675. A total of 100,000 of those shares have
been purchased by the investor. In the event that the Beilman option is not
extended beyond July 31, 2000, eUniverse is required to sell the remaining
shares at the prices indicated above. All of the 850,000 shares that may be
purchased by the investors include the requirement that eUniverse register all
such shares for resale on or prior to November 30, 2000. eUniverse believes it
will close the sale of stock to the new investor in the near future, and use the
proceeds of the sale to pay back all of the short term loans; however, there can
be no assurance that such financing can be successfully completed on terms
acceptable to eUniverse.
The matters discussed above raise substantial doubt about eUniverse's
ability to continue as a going concern.
OUR PROSPECTS FOR FINANCIAL SUCCESS ARE DIFFICULT TO FORECAST BECAUSE WE HAVE A
LIMITED OPERATING HISTORY. IF WE FAIL TO MEET THE EXPECTATIONS OF OUR INVESTORS
AND OF PUBLIC MARKET ANALYSTS, THE MARKET PRICE OF OUR COMMON STOCK MAY DECLINE.
Given that eUniverse's business, as currently operated, commenced in April 1997,
when the operations of our predecessor, CD Universe, began, we have a limited
operating history upon which an evaluation of eUniverse and its prospects can be
based. Neither eUniverse nor any of its subsidiaries has ever made a profit in
any fiscal quarter. Our prospects for financial success must be considered in
light of the risks, expenses and difficulties frequently encountered by
companies in new, unproven and rapidly evolving markets, such as the Internet
market. To address these risks, eUniverse must, among other things, expand its
customer base, respond effectively to competitive developments, continue to
attract, retain and motivate qualified employees and continue to upgrade its
technologies. If eUniverse is not successful in further developing and expanding
its music, video and interactive entertainment business, including sales of
advertising on its web sites and development of related business opportunities,
its ability to achieve profitability may not be realized and our market price
may decline.
IF WE ARE UNABLE TO MAINTAIN OUR STRATEGIC PARTNERSHIPS, TRAFFIC TO OUR WEB SITE
MAY BE REDUCED AND OUR REVENUES COULD DECREASE. ADDITIONALLY, IF OUR NETWORK
INFRASTRUCTURE IS NOT SUFFICIENT TO SERVICE OUR CUSTOMERS, WE COULD LOSE
CUSTOMERS AND OUR REVENUES COULD BE REDUCED. Although eUniverse's ability to
generate additional revenue from Internet commerce may depend on increased site
traffic, purchases and advertising that eUniverse expects to generate through
strategic partnerships, there can be no assurance that its existing
relationships will be maintained through their initial terms or that additional
third-party partnerships will be available to eUniverse on acceptable commercial
terms or at all. The inability to enter into new, and to maintain any one or
more of its existing, strategic partnerships, such as with Linkshare (see "Sales
and Marketing"), could result in decreased traffic to our web sites and our
product and service sales revenue could decrease. Even if we can maintain our
strategic partnerships, there can be no assurance that our infrastructure of
hardware and software will be sufficient to handle the potential increased
traffic and sales volume from these partnerships.
IF WE ARE UNABLE TO EXPAND OUR WEB PRESENCE INTERNATIONALLY, WE MAY SEE AN
INCREASE IN OPERATING EXPENSES AND NO INCREASE IN REVENUES. eUniverse's web
sites are accessible throughout the world. If eUniverse is not able to
successfully market, sell and distribute its products in international markets
due to a variety of legal, contractual and practical considerations and the
risks inherent in doing business on a global level, such as unexpected changes
in regulatory requirements (such as those that may prohibit access to our web
sites), export restrictions, tariffs and other trade barriers, difficulties in
staffing and managing foreign operations, difficulties in protecting
intellectual property rights, longer payment cycles, problems in collecting
accounts receivable, political instability, fluctuations in currency exchange
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rates and potentially adverse tax consequences, eUniverse's business, prospects,
financial condition and results of operations from successful international
operations will not be realized and our gross profits will not increase.
BECAUSE WE MAY NOT SUCCESSFULLY IDENTIFY AND ACQUIRE OTHER SUITABLE EXISTING
INTERNET-BASED BUSINESSES AND WEB SITES, OUR OPERATING EXPENSE COULD INCREASE
WHILE OUR REVENUES COULD BE REDUCED. eUniverse's growth and future profitability
may depend in part upon its ability to identify companies that are suitable
acquisition candidates, to acquire those companies upon appropriate terms and to
effectively integrate and expand their operations within its own infrastructure.
We may not be able to identify additional candidates that are suitable for
acquisition or to consummate desired acquisitions on favorable terms.
Acquisitions involve a number of special risks, including the diversion of
management's attention to the assimilation of the operations and personnel of
the acquired companies, adverse short-term effects on eUniverse's operating
results and the potential inability to integrate financial and management
reporting systems. A significant portion of eUniverse's capital resources could
be used for these acquisitions. Accordingly, eUniverse may require additional
debt or equity financing for future acquisitions, which may not be available on
terms favorable to eUniverse, if at all. Moreover, eUniverse may not be able to
successfully integrate an acquired business into eUniverse's business or to
operate an acquired business profitably. If we are not able to integrate and
expand the operations of acquired companies, without excessive costs, delays or
other adverse developments, our revenues could decrease.
IF WE ARE UNABLE TO USE NEW TECHNOLOGIES EFFECTIVELY OR ADAPT OUR WEB SITES,
PROPRIETARY TECHNOLOGY AND TRANSACTION-PROCESSING SYSTEMS TO CUSTOMER
REQUIREMENTS OR EMERGING INDUSTRY STANDARDS, CUSTOMERS MAY NOT VISIT OUR WEB
SITES OR PURCHASE PRODUCTS FROM US, WHICH COULD RESULT IN A DECREASE IN OUR
REVENUES. To remain competitive, eUniverse must continue to enhance and improve
the responsiveness, functionality and features of its web sites and develop new
features to meet customer needs. The Internet is characterized by rapid
technological change, changes in user and customer requirements and preferences,
frequent new product and service introductions and the emergence of new industry
standards and practices that could render eUniverse's existing web network and
sites, technology and systems obsolete. eUniverse's success will depend, in
part, on its ability to license leading technologies useful in its business,
enhance its existing products and services, develop new products, services and
technology that address the needs of its customers, and respond to technological
advances and emerging industry standards and practices on a cost-effective and
timely basis.
IF WE ARE UNABLE TO PROTECT OUR TRADEMARKS AND PROPRIETARY RIGHTS, OUR
REPUTATION AND BRAND COULD BE IMPAIRED AND WE COULD LOSE CUSTOMERS. eUniverse
regards its trademarks, trade secrets and similar intellectual property as
valuable to its business, and relies on trademark and copyright law, trade
secret protection and confidentiality and/or license agreements with its
employees, partners and others to protect its proprietary rights. There can be
no assurance that the steps taken by eUniverse will be adequate to prevent
misappropriation or infringement of its proprietary property. eUniverse
currently has two service marks registered with the United States Patent and
Trademark Office: CD Universe and Video Universe. While eUniverse is currently
applying for registration of a number of its trademarks and service marks, we
may not be able to successfully prosecute our applications for these trademarks.
WE COULD LOSE ONE OR MORE OF THE KEY MEMBERS OF OUR MANAGEMENT TEAM, WHICH COULD
IMPAIR OUR BUSINESS OPERATIONS. We depend on the continued service of our
executive officers and key technical and marketing personnel, including, in
particular, Brad D. Greenspan, our Chairman, William R. Wagner, our Chief
Financial Officer, James Haiduck, our Vice President of Sales and Stephen D.
Sellers, our Vice President of Business Affairs and Business Development.
eUniverse has employment agreements with Messrs. Wagner, Haiduck and Sellers.
However, these employment agreements do not assure the services of these
employees. Despite employment agreements with these members of management,
eUniverse's employees may voluntarily terminate their employment with eUniverse
at any time. eUniverse's success also depends on its ability to attract and
retain additional qualified employees. Competition for qualified personnel is
intense and there
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are a limited number of persons with knowledge of and experience in commercial
application of the Internet and retail sales of music and entertainment related
products. There can be no assurance that eUniverse will be able to attract and
retain highly qualified personnel to fill critical managerial and operational
positions.
OUR FUTURE OPERATING RESULTS MAY FLUCTUATE. IF WE ARE UNABLE TO MEET THE
EXPECTATIONS OF INVESTORS AND PUBLIC MARKET ANALYSTS, THE MARKET PRICE OF OUR
COMMON STOCK MAY DECREASE. eUniverse expects to experience fluctuations in
future quarterly and long-term operating results that may be caused by a variety
of factors, many of which are outside eUniverse's control. Factors that may
affect eUniverse's quarterly operating results include, without limitation,
- eUniverse's ability to retain existing customers, attract new customers
at a steady rate and maintain customer satisfaction,
- the announcement or introduction of new or enhanced web sites, products and
strategic partnerships by eUniverse and its competitors,
- the mix of products sold by eUniverse,
- seasonality of the recorded music industry (namely, the fact that sales of
recorded music traditionally peak during the Christmas season),
- seasonality of advertising sales,
- eUniverse promotions and sales programs,
- price competition or higher recorded music prices in the industry,
- the level of use of the Internet and increasing consumer acceptance of the
Internet for the purchase of consumer products, such as those offered by
eUniverse,
- eUniverse's ability to upgrade and develop its systems and infrastructure
in a timely and effective manner,
- the amount and timing of operating costs and capital expenditures relating to
expansion of eUniverse's business, operations and infrastructure and the
implementation of marketing programs, key agreements and strategic partnerships,
and general economic conditions and economic conditions specific to the
Internet, online commerce, and the recorded music and prerecorded videocassette
industries.
OUR REVENUES AND GROSS PROFITS MAY BE REDUCED IF WE ARE UNABLE TO FULFILL OUR
CUSTOMERS' ORDERS. eUniverse currently accepts orders only over the Internet.
Product orders received by CD Universe are accepted, verified, batched and
electronically sent on a daily basis to our suppliers, including Valley Media,
Inc. of Woodland Hills, California, eUniverse's primary supplier. Shipments from
our suppliers are received at eUniverse's fulfillment center in Wallingford,
Connecticut. Employees break down bulk shipments into the individual orders to
be sent to customers. This arrangement allows eUniverse to offer customers a
wide variety of CD and video titles while maintaining virtually no inventory. It
also reduces product returns by allowing eUniverse to only order products for
which it has received orders. eUniverse typically fills over 80% of its orders
by the next business day, and approximately 90% of its orders within one week.
eUniverse believes that the speed of order fulfillment is an important factor to
its customers, and accordingly has a significant impact on its ability to
increase revenues from retail sales.
At the present time, Valley Media supplies approximately 80% of the music and
video products and accessories sold by CD Universe. There is no written
agreement between eUniverse and Valley Media. We may not be able to maintain a
relationship with Valley Media or to find an alternative supplier that will
provide products and services on terms satisfactory to eUniverse should our
relationship with Valley Media terminate. Therefore, an unanticipated
termination of eUniverse's relationship with Valley Media, particularly during
the fourth quarter of the calendar year, in which a high percentage of recorded
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music and video product sales is made, could cause our revenues to decline for
the quarter in which the termination occurred, even if eUniverse were able to
establish a relationship with an alternative supplier. To date, Valley Media has
satisfied eUniverse's requirements on a timely basis. However, to the extent
that Valley Media is unable to continue to satisfy eUniverse's increasing
product requirements, these constraints may result in decreased revenue and have
a material adverse effect on eUniverse's business, results of operations and
financial condition.
COMPETITION IN ONLINE COMMERCE IS INTENSE. IF WE ARE UNABLE TO COMPETE
SUCCESSFULLY AGAINST CURRENT AND FUTURE COMPETITORS, OUR REVENUES COULD DECLINE.
The online commerce market is new, rapidly evolving and intensely competitive,
and eUniverse expects that competition will further intensify in the future.
Barriers to entry are minimal, and current and new competitors can launch new
sites at a relatively low cost. With respect to recorded music sales, eUniverse
currently competes with numerous Internet retailers, including music retail
chains, record labels, independent retailers with web sites on the Internet and
online stores retailing music and video titles, such as Amazon.com. In addition,
eUniverse competes with traditional music retailers, as well as megastores, mass
merchandisers, consumer electronics stores and music clubs.
The primary competitive factors in providing music, video and other
entertainment products and services via the Internet are name recognition,
variety of value-added services, ease of use, price, quality of service,
availability of customer support and technical expertise. eUniverse's prospects
for achieving its business objectives will depend heavily upon its ability to
provide high quality, entertaining content, along with user-friendly web site
features and value-added Internet services. Other factors that will affect
eUniverse's prospects for success include its ability to attract experienced and
qualified personnel, particularly in the areas of management, sales and
marketing, and web site design. If eUniverse is unable to compete successfully
in its retailing businesses, there will be a material adverse impact on its
business, results of operations and financial condition due to decreased
revenue. In addition, the competition for advertising revenues, both on Internet
web sites and in more traditional media, is intense. If eUniverse fails to
attract and retain significant sources of revenue from paid advertisements and
sponsorships on its web sites, eUniverse's business, results of operations and
financial condition will be materially adversely affected by the decreased
revenue.
Many of eUniverse's current and potential competitors in the area of
online music, video and other entertainment retailing, such as Amazon.com, have
longer operating histories, significantly greater financial, technical and
marketing resources, greater name recognition and larger existing customer bases
than eUniverse. These competitors may be able to respond more quickly than
eUniverse to new or emerging technologies and changes in the economy or the
marketplace affecting the products and services that eUniverse offers. In
addition, some of eUniverse's competitors can be expected to devote greater
resources, both human and financial, to the development, promotion and sale of
music, video and other entertainment products and services. Accordingly, there
can be no assurance that eUniverse will be able to compete successfully and
achieve its objectives with respect to growth in revenue and profit.
RISKS ASSOCIATED WITH THE YEAR 2000 ISSUE
The Year 2000 issue (Y2K) is the result of computer programs written using two
digits rather than four to define the applicable year. Any of eUniverse's
computer and telecommunications programs that have date sensitive software may
recognize a date using "00" as the year 1900 instead of 2000. This could result
in system failure or miscalculations causing disruptions in operations,
including the ability to process transactions, send invoices, or engage in
similar normal business activities.
During 2000, we may experience a Y2K issue, which could negatively affect our
operating results or financial condition because our costs to remedy the issue
would increase. We believe, however, that our most reasonably likely worst-case
scenario would relate to problems with the systems of third parties rather than
with our internal systems, including disruption of product delivery from
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wholesalers, inability to charge purchases to credit cards, temporary power
outages, delayed transportation of products by third parties, and lost or
delayed customer purchases due to non-compliant personal computers. We are
limited in our abilities to address the Y2K issue as it relates to third parties
and are relying solely on the assurances of these third parties as to their Year
2000 preparedness.
RISKS RELATED TO THE INTERNET INDUSTRY
OUR FUTURE RESULTS AND GROWTH MAY NOT BE REALIZED IF THE USE OF THE INTERNET
DOES NOT CONTINUE TO INCREASE. Our market, users of the global computer network
known as the Internet, is new and rapidly evolving. Our business could suffer if
Internet usage does not continue to grow. Internet usage may be inhibited for a
number of reasons, including:
- inadequate network infrastructure;
- security concerns;
- inconsistent quality of service;
- lack of availability of cost-effective and high-speed service; and
- changes in government regulation of the Internet.
If Internet usage grows, the Internet infrastructure might not be able to
support the demands placed on it by this growth or its performance and
reliability may decline. In addition, future outages and other interruptions
occurring throughout the Internet could lead to decreased use of our network of
web sites and would therefore harm our business.
WE COULD BE SUED FOR INFORMATION RETRIEVED FROM THE INTERNET. Due to the fact
that material may be downloaded from web sites and may be subsequently
distributed to others, there is a potential that claims will be made against
eUniverse under legal theories, such as defamation, negligence, copyright or
trademark infringement or other theories based on the nature and content of the
material. These claims have been brought, and sometimes successfully pressed,
against on-line services in the past. In addition, we could be exposed to
liability with respect to the material that may be accessible through our
products and web sites, including claims asserting that, by providing hypertext
links to web sites operated by third parties, we are liable for wrongful actions
by those third parties through the web sites. Although eUniverse carries general
liability insurance, its insurance may not cover potential claims of this type,
or the level of coverage may not be adequate to fully protect eUniverse against
all liability that may be imposed. Any costs or imposition of liability or legal
defense expenses that are not covered by insurance or in excess of insurance
coverage could reduce our working capital and have a material adverse effect on
eUniverse's business, results of operations and financial condition. Also, the
legal effectiveness of our terms and conditions of use is uncertain. We
currently are not aware of any claims that can be expected to have a material
adverse impact on our financial condition or our ability to conduct our
business.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES COULD INCREASE OUR COSTS AND RISKS
TO DOING BUSINESS ON THE INTERNET. There are currently few laws or regulations
that specifically regulate communications or commerce on the Internet. However,
laws and regulations may be adopted in the future that address issues, such as
user privacy, pricing, taxation and the characteristics and quality of products
and services. For example, the Communications Decency Act of 1996 prohibits
obscene and other unlawful information and content from being transmitted over
the Internet. Several other nations have taken actions to restrict the free flow
of material deemed to be objectionable on the Internet. On October 21, 1998,
President Clinton signed the Internet Tax Freedom Act placing a three year
moratorium, beginning October 1, 1998 through October 21, 2001, on Internet
access taxes, multiple taxes on electronic commerce, and discriminatory taxes on
electronic commerce. In addition, local telephone carriers have argued before
the Federal Communications Commission that Internet service providers and online
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service providers should be required to pay fees for access to local telephone
networks in a manner similar to long distance telephone carriers. Although the
FCC has informally stated that it has no intention of assessing per-minute
charges on Internet traffic or changing the way consumers obtain and pay for
access to the Internet, if the efforts of the local telephone carriers are
successful, costs for Internet access and usage could increase sharply.
Moreover, it may take years to determine the extent to which existing laws
relating to issues, such as property ownership, libel, taxation and personal
privacy are applicable to the Internet. Any new laws or regulations relating to
access to or use of the Internet could harm our business.
IF WE ARE UNABLE TO PROTECT OUR DOMAIN NAMES, OUR REPUTATION AND BRAND COULD BE
IMPAIRED AND WE COULD LOSE CUSTOMERS. We own the Internet domain names
"euniverse.com," "cduniverse.com", "videouniverse.com", "gamesuniverse.com",
"casesladder.com" and "gagames.com" as well as numerous other domain names in
the United States. National and international Internet regulatory bodies
generally regulate the registration of domain names. The regulation of domain
names in the United States and in other countries is subject to change.
Regulatory bodies could establish additional top-level domains, appoint
additional domain name registrars or modify the requirements for holding domain
names. As a result, we might not acquire or maintain the "euniverse.com,"
"cduniverse.com", "videouniverse.com", "gamesuniverse.com", "casesladder.com",
"gagames.com" or comparable domain names in all the countries in which we
conduct business, which could harm our business. Furthermore, the relationship
between regulations governing domain names and laws protecting trademarks and
similar proprietary rights is unclear and still evolving. Therefore, we might be
unable to prevent third parties from acquiring domain names that infringe or
otherwise decrease the value of our trademarks and other proprietary rights.
WE MAY BE NOT ABLE TO KEEP PACE WITH RAPID TECHNOLOGICAL CHANGES IN THE INTERNET
INDUSTRY, WHICH COULD CAUSE US TO LOSE CUSTOMERS AND REVENUE. Rapid
technological developments, evolving industry standards and user demands, and
frequent new product introductions and enhancements characterize the market for
Internet products and services. These market characteristics are exacerbated by
the emerging nature of the market and the fact that many companies are expected
to introduce new Internet products and services in the near future. Our future
success will depend on our ability to continually improve our content offerings
and services. In addition, the widespread adoption of developing
multimedia-enabling technologies could require fundamental and costly changes in
our technology and could fundamentally affect the nature, viability and
measurability of Internet-based advertising, which could harm our business.
OUR COMPUTER NETWORK SECURITY MEASURES COULD BE CIRCUMVENTED RESULTING IN LOSS
OF CUSTOMER DATA. eUniverse accepts credit cards, personal checks or money
orders as payment for customer orders. The CD Universe web site enables
customers to store their credit card information in a personal account, thereby
avoiding the need to re-enter this information when making future purchases.
Customers are offered several shipping options, including overnight delivery.
eUniverse confirms each order by e-mail communication to the customer promptly
after the order is placed, and subsequently confirms shipment of the order by
e-mail. In addition, the CD Universe web site includes a feature that enables
customers to check on the status of their order. Use of the Internet by
consumers is at an early stage of development, and market acceptance of the
Internet as a medium for commerce is still by no means certain. eUniverse's
future success will depend on its ability to significantly increase revenues,
which will require the development and widespread acceptance of the Internet as
a medium for commerce, particularly as a channel of retail distribution. The
Internet may not prove to be a viable commercial marketplace because of
inadequate development of the necessary infrastructure, such as reliable network
backbones, or complementary services, such as high-speed modems and security
procedures for financial transactions. The viability of the Internet may prove
uncertain due to delays in the development and adoption of new standards and
protocols to handle increased levels of Internet activity or due to increased
government regulation. If use of the Internet for the purposes envisioned by
eUniverse does not continue to grow, or if the necessary Internet infrastructure
is not further developed and maintained, eUniverse's business, results of
operations and financial condition could be materially adversely affected due to
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decrease or loss of traffic.
Despite eUniverse's implementation of network security measures, its
infrastructure is potentially vulnerable to computer break-ins and similar
disruptive problems caused by individuals with a variety of objectives.
eUniverse learned on Saturday January 8, 2000 that customer data stolen from CD
Universe was posted on the Internet and immediately notified the FBI, which
caused the site to be shut down the same day.
Consumer concern over Internet security has been, and could continue to
be, an impediment to the expansion of commercial activities that require
consumers to transmit their credit card information and other personal
information over the Internet. In addition, computer viruses, break-ins or other
security problems could lead to misappropriation of proprietary information and
interruptions, delays or cessation in service to eUniverse's customers. Until
more comprehensive and reliable security technologies are developed and
implemented, the security and privacy concerns of existing and potential
customers may inhibit the growth of the Internet as a merchandising medium.
RISKS RELATED TO THIS OFFERING
OUR STOCK PRICE COULD BE VOLATILE, WHICH COULD RESULT IN SUBSTANTIAL LOSSES TO
INVESTORS. Our common stock is currently traded on the NASDAQ Small Cap Market.
We cannot predict the extent to which investor interest in eUniverse will
develop in the trading market or how liquid any trading market might become.
The stock market has experienced extreme price and volume fluctuations and the
market prices of securities of technology companies, particularly
Internet-related companies, have been highly volatile. In the past, following
periods of volatility in the market price of a company's securities, securities
class action litigation has often been instituted against a company. This
litigation could result in substantial costs and a diversion of our management's
attention and resources.
OUR STOCK OWNERSHIP WILL BE CONCENTRATED IN A SMALL NUMBER OF PEOPLE WHO COULD
NEGATIVELY AFFECT THE RIGHTS OF OUR OTHER STOCKHOLDERS. As of August 18, 2000,
the present directors, executive officers, greater than 5% stockholders and
their affiliates beneficially owned approximately 59% of our outstanding common
stock. As of August 18, 2000, Brad D. Greenspan beneficially owned approximately
44% of our outstanding common stock. As a result of his beneficial ownership,
Mr. Greenspan, acting alone or with others, will be able to control all matters
requiring stockholder approval, including the election of directors and approval
of significant transactions. This concentration of ownership may also have the
effect of delaying or preventing a change in control of eUniverse.
SHARES ELIGIBLE FOR PUBLIC SALE AFTER THIS OFFERING COULD CAUSE OUR STOCK PRICE
TO FALL. As of August 18, 2000, approximately 16,569,283 shares of our common
stock are restricted shares that may be sold only in the event that the shares
are registered, or exempted from registration, under the Securities Act.
Although a large number of our common stock is restricted, these shares may be
available for resale in the near future under Rule 144 or under one or more
registrations filed with the SEC statement, such as this registration statement
under which 796,500 shares are available for resale.
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES AND ADDRESS, AMONG OTHER THINGS, EUNIVERSE'S BUSINESS STRATEGY,
PROJECTED CAPITAL EXPENDITURES, POSSIBLE BUSINESS RELATIONSHIPS, AND POSSIBLE
EFFECTS OF CHANGES IN GOVERNMENT REGULATION. THESE STATEMENTS MAY BE FOUND UNDER
"RISK FACTORS" AS WELL AS IN THE PROSPECTUS GENERALLY. THESE STATEMENTS RELATE
TO OUR FUTURE PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS. THESE STATEMENTS
MAY BE IDENTIFIED BY THE USE OF WORDS, SUCH AS "EXPECTS," "ANTICIPATES,"
"INTENDS," "PLANS," AND SIMILAR EXPRESSIONS. ACTUAL EVENTS OR RESULTS MAY DIFFER
MATERIALLY FROM THOSE DISCUSSED IN FORWARD-LOOKING STATEMENTS AS A RESULT OF
VARIOUS FACTORS, INCLUDING THOSE FACTORS DISCUSSED ABOVE AND SET FORTH IN THIS
PROSPECTUS GENERALLY.
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USE OF PROCEEDS
eUniverse will not receive any portion of the proceeds from the sale of
shares of Common Stock by the selling stockholder under this prospectus.
SELLING STOCKHOLDER
The following table sets forth information regarding the beneficial
ownership of eUniverse Common Stock as of August 18, 2000 by Take-Two
Interactive Software, Inc. ("Take-Two"), which acquired shares of Common Stock
in connection with eUniverse's acquisition of Falcon Ventures Corporation from
Take-Two in February 2000.
The shares are being registered to permit public secondary trading of
these shares. The selling stockholder listed below may, under this prospectus,
from time to time offer and sell the number of shares of common stock set
opposite its name below.
<TABLE>
<CAPTION>
Beneficial Ownership Percentage of
of Shares of Shares
Common Stock Shares to be Sold Shares Owned After Owned After
Selling Stockholder Prior to Offering in the Offering the Offering the Offering
------------------- ----------------- --------------- ------------ ------------
<S> <C> <C> <C> <C>
Take-Two Interactive
Software, Inc. 796,500 796,500(1) 0 0%
Inc.
(1) eUniverse agreed to register all of the shares of Common Stock beneficially
owned by Take-Two for resale. As of the date hereof, the selling stockholder has
agreed not to sell more than 250,000 shares of Common Stock. However, that
agreement may be amended to allow Take-Two to sell up to all of the shares of
Common Stock beneficially owned by it under this registration statement.
PLAN OF DISTRIBUTION
The shares being offered under this prospectus may be sold from time to
time by the selling stockholder, or by pledgees, donees, transferees or other
successors in interest. These sales may be made on one or more exchanges or in
the over-the-counter market, or otherwise at prices and at terms then prevailing
or at prices related to the then current market price, or in negotiated
transactions. The shares may be sold by one or more of the following: (a) a
block trade in which the broker or dealer so engaged will attempt to sell the
shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction; (b) purchases by the broker or dealer as
principal and resale by the broker or dealer for its account under this
prospectus; (c) an exchange distribution in accordance with the rules of the
exchange, and (d) orders brokerage transactions and transactions in which the
broker solicits purchasers. From time to time the selling stockholder may engage
in short sales, short sales versus the box, puts and calls and other
transactions in securities of the issuer or derivatives of the securities, and
may sell and deliver the shares under these transactions.
The selling stockholder may effect the transactions directly, or
indirectly through underwriters, broker-dealers or agents acting on their
behalf, and under these sales, the broker-dealers or agents may receive
compensation in the form of commissions, concessions, allowances or discounts
from the selling
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stockholder and/or the purchasers of the shares for whom they may act as agent
or to whom they sell shares as principal or both (which commissions,
concessions, allowances or discounts might be in excess of customary amounts).
To the extent required, the names of any agents, broker-dealers or underwriters
and applicable commissions, concessions, allowances or discounts and any other
required information with respect to any particular offer of the shares by the
selling stockholder, will be set forth in a supplement to this prospectus. Any
statement contained in this prospectus will be deemed to be modified or
superseded by any inconsistent statement contained in any prospectus supplement.
Unless this prospectus is accompanied by a prospectus supplement stating
otherwise, offers and sales may be made under this prospectus only in ordinary
broker's transactions made on the NASDAQ Small Cap Market or any other exchange
or market in which the stock is listed in transactions involving ordinary and
customary brokerage commissions.
In affecting sales, brokers or dealers engaged by the selling
stockholder may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from selling stockholder in
amounts to be negotiated immediately prior to the sale. The selling stockholder
and agents who execute orders on their behalf may be deemed to be underwriters
as that term is defined in Section 2(11) of the Act and a portion of any
proceeds of sales and discounts, commissions or other compensation may be deemed
to be underwriting compensation for purposes of the Act.
In the event the selling stockholder engages an underwriter to sell the
shares, to the extent required, a prospectus supplement will be distributed,
which will set forth the number of shares being offered and the terms of the
offering, including the names of the underwriters, any discounts, commissions
and other items constituting compensation to underwriters, dealers or agents,
the public offering price with any discounts, commissions or concessions allowed
or reallowed or paid by underwriters to dealers.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for
eUniverse by Martin, Lucas & Chioffi, LLP, Stamford, Connecticut.
EXPERTS
The consolidated financial statements of eUniverse and related schedule
included and/or incorporated by reference in the eUniverse's Annual Report on
Form 10-K for the year ended March 31, 2000 and incorporated by reference in
this prospectus have been audited by Merdinger, Fruchter, Corso & Rosen, PC,
independent auditors, as stated 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 upon the
authority of such firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a statement of the expenses to be incurred by
eUniverse in connection with the registration of the securities being registered
under this registration statement.
Amount
------
Securities and Exchange Commission registration fee $1,440
Printing fees 2,500
Legal fees and expenses 2,500
Accounting fees and expenses -0-
Miscellaneous -0-
------
Total $6,440
Except for the SEC registration fee, all expenses are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS AND LIMITATION OF
LIABILITY.
NEVADA LAW
Sections 78.751 et seq. of the Nevada Revised Statutes allow a company
to indemnify its officers, directors, employees, and agents from any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, except under certain circumstances.
Indemnification may only occur if a determination has been made that the
officer, director, employee, or agent acted in good faith and in a manner which
such person believed to be in the best interests of eUniverse. A determination
may be made by the stockholders, by a majority of the directors who were not
parties to the action, suit, or proceeding confirmed by opinion of independent
legal counsel; or by opinion of independent legal counsel in the event a quorum
of directors who were not a party to such action, suit, or proceeding does not
exist.
ARTICLES OF INCORPORATION
Article Twelfth of the Articles of Incorporation of eUniverse provide
as follows with respect to indemnification of Directors and Officers:
"TWELFTH. INDEMNIFICATION: The corporation shall indemnify and hold
harmless the Officers and Directors of the Corporation from any and all
liabilities or claims to the fullest extent now, or hereafter from time to time,
permitted under the general corporation Law of the state of Nevada."
BYLAWS
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Article XII of the Bylaws of eUniverse provide as follows with respect
to indemnification of Officers and Directors:
"Section 1. Exculpation. No Director or Officer of the Corporation
shall be liable for the acts, defaults, or omissions of any other Director or
Officer, or for any loss sustained by the Corporation, unless the same has
resulted from his own willful misconduct, willful neglect, or gross negligence.
"Section 2. Indemnification. Each Director and Officer of the
Corporation and each person who shall serve at the Corporation's request as a
director or officer of another corporation in which the Corporation owns shares
of capital stock or of which it is a creditor shall be indemnified by the
Corporation to the fullest extent permitted from time to time by the Nevada
Revised Statutes against all reasonable costs, expenses and liabilities
(including reasonable attorneys' fees) actually and necessarily incurred by or
imposed upon him in connection with, or resulting from any claim, action, suit,
proceeding, investigation, or inquiry of whatever nature in which he may be
involved as a party or otherwise by reason of his being or having been a
Director or Officer of the Corporation or such director or officer of such other
corporation, whether or not he continues to be a Director or Officer of the
Corporation or a director or officer of such other corporation, at the time of
the incurring or imposition of such costs, expenses or liabilities, except in
relation to matters as to which he shall be finally adjudged in such action,
suit, proceeding, investigation, or inquiry to be liable for willful misconduct,
willful neglect, or gross negligence toward or on behalf of the Corporation in
the performance of his duties as such Director or Officer of the Corporation or
as such director or officer of such other corporation. As to whether or not a
Director or Officer was liable by reason of willful misconduct, willful neglect,
or gross negligence toward or on behalf of the Corporation in the performance of
his duties as such Director or Officer of the Corporation or as such director or
officer of such other corporation, in the absence of such final adjudication of
the existence of such liability, the Board of Directors and each Director and
Officer may conclusively rely upon an opinion of independent legal counsel
selected by or in the manner designated by the Board of Directors. The foregoing
right to indemnification shall be in addition to and not in limitation of all
other rights which such person may be entitled as a matter of law, and shall
inure to his legal representatives' benefit.
"Section 3. Liability Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation or who is or was serving at the request of
the Corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, association, or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not he is indemnified
against such liability by this article XII."
Provided the terms and conditions of the applicable provisions under
Nevada law, eUniverse's Articles of Incorporation and Bylaws are met, officers,
directors, employees, and agents of eUniverse may be indemnified against any
cost, loss, or expense arising out of any liability under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
eUniverse, eUniverse has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy and is,
therefore, unenforceable.
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We intend to enter into indemnity agreements with each of our directors
and executive officers to give them additional contractual assurances regarding
the scope of the indemnification described above and to provide additional
procedural protections. In addition, we have obtained directors' and officers'
insurance providing indemnification for our directors, officers and certain
employees for certain liabilities. We believe that these indemnification
provisions and agreements are necessary to attract and retain qualified
directors and officers.
The limitation of liability and indemnification provisions in our
Amended and Restated Certificate of Incorporation and Bylaws may discourage
stockholders from bringing a lawsuit against directors for breach of their
fiduciary duty. They may also reduce the likelihood of derivative litigation
against directors and officers, even though such an action, if successful, might
otherwise benefit our stockholders and us. Furthermore, a stockholder's
investment may be adversely affected to the extent we pay the costs of
settlement and damage awards against directors and officers under these
indemnification provisions.
ITEM 16. EXHIBITS.
</TABLE>
<TABLE>
<CAPTION>
Exhibit
-------
Number Exhibit Title/Description
------ -------------------------
<S> <C>
5 Opinion of Martin, Lucas & Chioffi, LLP regarding legality of
securities being registered.
23.01 Consent of Merdinger, Fruchter, Corso & Rosen, PC.
23.02 Consent of Martin, Lucas & Chioffi, LLP (included in Exhibit 5).
24.01 Power of Attorney included in the signature page of this
registration statement.
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
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<PAGE>
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment of the registration statement) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the commission under Rule 424 (b) if, in the aggregate,
the changes in volume and price represent no more than a 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1) (i) and (1) (ii) do not apply if the
registration statement is on From S-3, Form S-8 or Form F-3, and the information
required to be, included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by
eUniverse under Section 13 or Section 15 (d) of the Securities Exchange Act of
1934 that are incorporated by reference 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.
(4) 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 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.
(5) Insofar as indemnification for liabilities raising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant under the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit 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 its counsel the matter has been settled by controlling precedent,
submit to a
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court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Wallingford, State of Connecticut, on August 30,
2000.
eUniverse, Inc.
By: /s/ Brad D. Greenspan
----------------------------------
Brad D. Greenspan
Chairman of the Board
The undersigned officers and directors of the registrant hereby
severally constitute and appoint Brad D. Greenspan and William R. Wagner, and
each of them, our true and lawful attorney with full power to sign for us and in
our names in the capacities indicated below, any and all pre-effective and
post-effective amendments to the registration statement on Form S-3 filed
herewith and any additional registration statements filed under Rule 462(b) to
register additional shares, and generally to do all such things in our names and
behalf in our capacities as officers and directors to enable the registrant to
comply with the provisions of the Securities Act of 1933, hereby ratifying and
confirming our signatures as they may be signed by our said attorney to any and
all amendments to said registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on August 30, 2000.
/s/ Brad D. Greenspan
------------------------------------------
Brad D. Greenspan
Chairman of the Board of Directors
(principal executive officer)
/s/ William R. Wagner
------------------------------------------
William R. Wagner
Chief Financial Officer
(principal financial officer and principal accounting officer)
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/s/ Charles Beilman
------------------------------------------
Charles Beilman
Vice President, Special Projects and Director
/s/ Leland N. Silvas
------------------------------------------
Leland N. Silvas
Director
------------------------------------------
Gordon N. Landies
Director
/s/ Daniel Mosher
------------------------------------------
Daniel Mosher
Director
21
