As filed with the Securities and Exchange Commission on February 15,
1996
Registration No. 33-65463
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
RENTRAK CORPORATION
(Exact name of Registrant as specified in charter)
Oregon 7227 N.E. 55th Avenue 93-0780536
(State of incorporation) Portland, Oregon 97218 (I.R.S. Employer
(Address of principal executive Identification Number)
offices)
Telephone Number: (503) 284-7581
F. Kim Cox
Executive Vice President
Rentrak Corporation
7227 N.E. 55th Avenue
Portland, Oregon 97218
(Name and address of agent for
service)
Telephone Number: (503) 284-7581
Approximate date of commencement of proposed sale to public: From
time to time after this Registration Statement becomes effective.
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, please 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. [ ]
<TABLE>
CALCULATION OF ADDITIONAL REGISTRATION FEE
<CAPTION>
Proposed Proposed Amount of
Title of Each Class of Securities Amount to be Maximum Maximum Registrat
to be Registered Registered Offering Aggregate ion Fee
Price Per Offering
Share Price
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value 939,000 $4.875(2) $4,577,625 $1579
shares (1)
Preferred Share Purchase Rights 939,000(3)(4) (4) (4) $100
(1) The Registrant has previously filed for the registration of
878,000 shares for which it paid a registration fee of $1,538.
(2) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(c) on the basis of the average of the
high and low prices of the Registrant's common stock as reported
on the Nasdaq National Market on February 12, 1996.
(3) The Registrant has previously filed for the registration of
878,000 Rights for which it paid a registration fee of $100.
(4) Rights are attached to and trade with Common Stock of the Company.
The value attributable to such Rights, if any, is reflected in the
market price of the Common Stock. Fee paid represents the minimum
statutory fee pursuant to Section 6(b) of the Securities Act of
1933.
</TABLE>
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
PROSPECTUS
1,817,000 Shares
RENTRAK CORPORATION
Common Stock ($.001 par value)
This Prospectus relates to 1,817,000 shares of Common Stock (the
"Shares") of Rentrak Corporation (the "Company") to be offered from time
to time by certain shareholders of the Company named in this Prospectus
(the "Selling Shareholders"). All of the Shares offered hereunder are
to be sold on behalf of the Selling Shareholders, and the Company will
not receive any proceeds from the sale of the Shares. The Shares
covered hereby include 939,000 shares of Common Stock held by certain
Selling Shareholders issuable upon exercise of warrants held by such
persons prior to the offering made by this Prospectus; this Prospectus
does not cover such warrants, only the shares of Common Stock issuable
upon exercise thereof. The Company has been advised that the Selling
Shareholders expect to offer the Shares in the over-the-counter market
on the Nasdaq National Market, through negotiated transactions or
otherwise, or in private transactions, at market prices prevailing at
the time of sale, at prices related to such prevailing market prices, or
at prices otherwise negotiated. The aggregate proceeds to the Selling
Shareholders from the sale of the Shares will be the purchase price of
the Shares sold less the aggregate brokers' commissions, if any. By
agreement, the Company will pay substantially all of the expenses
incident to the registration of the Shares. The Company has agreed to
indemnify the Selling Shareholders against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the
"Securities Act"), in connection with the sale of the Shares hereunder.
See "Selling Shareholders" and "Plan of Distribution."
See "Risk Factors" commencing on page six for certain
considerations relevant to an investment in the common stock.
The Shares were issued by the Company to the Selling Shareholders
pursuant to (1) the Asset Purchase Agreement dated August 25, 1995 (the
"Supercenter Agreement") by and among the Company, Supercenter
Entertainment Corporation, a Delaware corporation ("Supercenter"), and
Jack Silverman, (2) the Warrant Agreement dated September 11, 1992 (the
"1992 Fox Warrant") between the Company and Twentieth Century Fox Film
Corporation ("Fox") and the Warrant Agreement dated July 22, 1994
between the Company and Fox (the "1994 Fox Warrant"), and (3) the
Warrant Agreement dated July 22, 1994 (the "Disney Warrant") between the
Company and The Walt Disney Company ("Disney"). See "The Company" and
"Selling Shareholders."
The Common Stock of the Company is traded on the over-the-counter
Nasdaq National Market under the symbol "RENT." On February 13, 1996
the last reported sale price for the Common Stock of the Company as
reported on the Nasdaq National Market was $4.625 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is February 15, 1996
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission") in accordance
therewith. Such reports, proxy statements and other information
concerning the Company are available for inspection and copying at the
public reference facilities of the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at certain of
its Regional Offices at Northwestern Atrium Center, 500 West Madison
Street, Suite 1450, Chicago, Illinois 60661 and 7 World Trade Center,
13th Floor, New York, New York 10048. Copies of such material may be
obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Company has filed a registration statement on Form S-3 (the
"Registration Statement") with the Commission under the Securities Act
concerning the Shares covered by this Prospectus. This Prospectus omits
certain information and exhibits included in the Registration Statement,
copies of which may be obtained upon payment of a fee prescribed by the
Commission or may be examined free of charge at the Commission's Public
Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company's Common Stock is traded on the over-the-counter
market on the Nasdaq National Market. Reports and other information
concerning the Company can be inspected at the offices of the National
Association of Securities Dealers, Inc., at 1735 K Street, N.W.,
Washington, D.C. 20006. The Company furnishes its shareholders with
annual reports containing financial statements audited by its
independent auditors and with quarterly reports containing unaudited
summary financial information for each of the first three quarters of
each fiscal year.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission
are incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1995.
2. The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1995.
3. The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1995.
4. The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1995.
5. The Company's 1995 Proxy Statement.
6. The Company's Current Reports on Form 8-K dated as of May
18, 1995 (filed on June 2, 1995), August 25, 1995 (filed on
September 1, 1995), August 31, 1995 (filed on September 15,
1995) and August 31, 1995 (filed on November 14, 1995).
7. The description of the Common Stock of the Company which is
contained in the Registration Statement on Form 8-A of the
Company filed pursuant to the Exchange Act, including any
amendment or reports filed for the purpose of updating such
description.
All documents and any definitive proxy statements filed by the
Company 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 of the Shares offered hereby shall be deemed
to be incorporated by reference into this Prospectus and to be a part
hereof.
Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of the
Registration Statement and this Prospectus to the extent that a
statement contained in the Registration Statement and this Prospectus or
any other subsequently filed document which also is or is deemed to be
incorporated herein by reference modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each
person to whom this Prospectus has been delivered, upon the written or
oral request of any such person, a copy of any or all of the foregoing
documents incorporated herein by reference (not including exhibits to
such documents unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates by
reference). Requests should be directed to: F. Kim Cox, Executive Vice
President, Rentrak Corporation, 7227 N.E. 55th Avenue, Portland, Oregon
97218; (503) 284-7581.
No dealer, salesman or any other person has been authorized to
give any information or to make any representation not contained in this
Prospectus, and, if given or made, such information and representation
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such offer in such state. Neither
the delivery of this Prospectus nor any sales made hereunder shall,
under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that any
information contained herein is correct as to any time subsequent to its
date.
<TABLE>
TABLE OF CONTENTS
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Information by Reference . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . 10
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . 12
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
THE COMPANY
The Company's primary business is the distribution of pre-recorded
video cassettes to home video specialty stores under its Pay Per
Transaction program. In addition, the Company operates a number of
"store within a store" retail video outlets which rent and sell video
cassettes in Wal-Mart and K-Mart stores. The Company also operates a
number of retail stores which sell professional and college licensed
sports apparel merchandise. Unless the context otherwise requires, all
references herein to the Company refer to Rentrak Corporation and its
wholly owned subsidiaries.
PPT System. The Company distributes pre-recorded video cassettes
("Cassettes") principally to home video specialty stores under its Pay
Per Transaction program (the "PPT System"). The PPT System enables home
video specialty stores and other retailers, including grocery stores and
convenience stores, who rent Cassettes to consumers ("Retailers") to
obtain Cassettes at a significantly lower initial cost than if they
purchased the Cassettes from conventional video distributors. Under the
PPT System, after the Retailer pays a processing fee (the "Processing
Fee") to the Company and is approved for participation in the PPT
System, Cassettes are leased to the Retailer for a one-time fee (the
"Handling Fee") plus a percentage of revenues generated by Retailers
from rentals or sales to consumers (the "Transaction Fee"). The Company
pays the appropriate owner of the Cassette's distributions rights,
usually motion picture producers, licensees or distributors ("Program
Suppliers") fees which are calculated based upon the Company's revenues
from Retailers. The anticipated benefit to the Retailer is a higher
volume of rental transactions, as well as a reduction in capital cost
and risk. The anticipated benefit to the Program Supplier is an
increase in the total number of Cassettes shipped, resulting in
increased revenues and opportunity for profit. The anticipated benefit
to the consumer is the potential of finding more copies of certain newly
released hit titles and a greater selection of other titles at Retailers
participating in the PPT System. The Company markets its PPT System
throughout the United States and Canada. The Company also owns a
twenty-five percent interest in a Japanese corporation which markets a
similar system to video retailers in Japan.
To participate in the PPT System, Retailers must have approved
computer software and hardware to process all of their rental and sale
transactions. The Company's Rentrak Profit Maker Software resides on
the Retailers' point of sale computer system and transmits a record of
PPT transactions to the Company over a telecommunications network and
assists the Retailer in ordering newly released titles and in managing
Cassette inventory. The Company's computer systems process these
transactions and transmit information to Retailers on new titles.
Retail Video "Store Within A Store" Outlets -- BlowOut
Entertainment. In a series of acquisitions culminating in May 1995, the
Company acquired a fifty-seven percent (57%) interest in Entertainment
One, Inc., a Delaware corporation ("E-1"). E-1 operates "store within a
store" retail video outlets which rent and sell video cassettes, video
games, computer games and programs, and CD-ROM titles in Wal-Mart
Supercenter stores under the trade name "Blowout Video." In December
1995, the Company converted approximately $3 million of E-1 debt into E-
1 common stock, increasing its interest in E-1 to approximately ninety-
three percent (93%). As of December 31, 1995, E-1 operated 78 stores in
Wal-Mart Supercenter stores, all of which are participating retailers in
the PPT System. As of December 31, 1995, only 22 of the E-1 stores had
been open for more than a year, and E-1 had not generated a profit.
On August 31, 1995, the Company acquired certain assets of
Supercenter Entertainment Corporation, a Delaware corporation
("Supercenter"), consisting of 45 retail video "store within a store"
outlets in Wal-Mart Supercenter stores and 25 retail video outlets in K-
Mart and K-Mart "SuperK" stores. Like the E-1 outlets, the acquired
stores are operated under the trade name "Blowout Video" and are
participating Retailers in the PPT System. These operations were
significantly expanded over the last year and to date have not generated
a profit.
In early 1996, the Company and E-1 intend to reorganize the
BlowOut Video retail business into a single corporation to be named
BlowOut Entertainment, Inc. ("BlowOut Entertainment"), which following
such reorganization would be owned by Rentrak and the other current
shareholders of E-1. Unless the context otherwise requires, all
references herein to BlowOut Entertainment refer to the combined "store
within a store" video operations of the Company and E-1, and assumes
that such reorganization has been effected.
BlowOut Entertainment operates "store within a store" video
outlets primarily in Wal-Mart stores and K-Mart stores. BlowOut
Entertainment has entered into master leases with both Wal-Mart and K-
Mart. Each individual video outlet lease under the Wal-Mart and K-Mart
master leases is for a five-year term with an option to extend for an
additional five years. Although the master leases do not require
BlowOut Video to open additional video outlets in either Wal-Mart or K-
Mart stores, and do not require Wal-Mart or K-Mart to lease additional
video outlets to BlowOut Entertainment, BlowOut Entertainment has
committed to Wal-Mart to open video outlets within 45 Supercenters in
1996. Wal-Mart has recently announced that it intends to open
110 Supercenters during 1996. Assuming Wal-Mart consents to leasing
additional video outlets in such stores and assuming sufficient capital
resources are available, it is BlowOut Entertainment's intention to open
additional video outlets in many of such Supercenters. It is
anticipated that BlowOut Entertainment will incur substantial opening
and start-up costs in connection with the opening of additional stores
(currently estimated to be $100,000 per store) and require substantial
management resources to open each store. BlowOut Entertainment is
currently exploring the possibility of obtaining debt and equity
financing from various private investors and is working with investment
banking firms to explore these and other possible equity financings.
There can be no assurance that BlowOut Entertainment will be able to
obtain sufficient capital on reasonable terms or that it will be able to
attract and retain a sufficient number of skilled store managers to
implement its growth strategy. BlowOut Entertainment's "store within a
store" video operations have not generated a profit and there can be no
assurance that they will generate a profit in the foreseeable future.
Sports Apparel Retailing - The Pro Image, Inc. and Team Spirit,
Inc. As of December 1, 1995, the Company, through its wholly owned
subsidiaries, The Pro Image, Inc. ("TPI") and Team Spirit, Inc. ("Team
Spirit"), owned or franchised approximately 240 retail outlets which
sell sports-oriented products and apparel featuring products licensed by
college and professional sports teams. The Company's sports apparel
retail outlets are primarily nocated in 45 states and Canada. The
Company also has a limited number of franchised stores in Mexico,
Germany and Japan.
The Company currently believes it may be beneficial to operate its
retail sports apparel business and the BlowOut Entertainment business
independently of the Company's PPT operations. In this regard, the
Company is currently exploring possible alternatives to restructure the
TPI and the BlowOut Entertainment business to achieve this end. In
conjunction with any such restructuring, the Company could be required
to take substantial write downs, primarily of intangible assets.
The Company was incorporated in Oregon in 1977 and until September
1988 operated under the name "National Video, Inc." Initially, the
Company's principal business activity was the sale of franchises for the
operation of video specialty stores. In September 1988, the Company
sold its franchise operations in order to develop the PPT System, which
is now the Company's primary business. The Company's principal
executive offices are located at 7227 N.E. 55th Avenue, Portland, Oregon
97218 ((503) 284-7581).
RISK FACTORS
In addition to the material contained, or incorporated by
reference elsewhere, in this Prospectus, investors should carefully
consider the following factors.
PPT Business
Dependence on PPT System. A substantial portion of the Company's
revenues (approximately 71% in fiscal year 1995) are derived from the
PPT System. The Company began to market the program in January 1989.
Although the Company has continued to expand its distribution system,
there can be no assurance that the Company will be able to continue to
market the PPT System successfully or that the Company will realize
profits from its operations in the future.
Acquisition of Cassettes for Distribution. The Company's success
depends, among other things, on its ability to provide a sufficient
quantity and variety of Cassettes to Retailers. This in turn depends on
the willingness of Program Suppliers to supply the Company with
Cassettes on acceptable terms and conditions. The Company's existing
arrangements with Program Suppliers are of varying duration, scope and
formality. In the nine month period ended December 31, 1995, Cassettes
supplied by the Company's two largest Program Suppliers (the "Major
Suppliers") accounted for twenty-eight percent (28%) and fourteen
percent (14%) of its revenues, respectively. Cassettes from no other
Program Supplier accounted for more than ten percent (10%) of the
Company's revenues during the same period. During the last three
years, the Company has not experienced any material difficulty in
acquiring Cassettes which are suitable for the Company's markets on
acceptable terms and conditions from Program Suppliers. Moreover, the
Company continues to seek involvement of additional Program Suppliers.
Based upon existing commitments from Program Suppliers and past
experience, the Company currently has, and believes that for the
reasonably foreseeable future it will have, an adequate supply of
Cassettes, on acceptable terms and conditions, which are suitable for
the Company's markets. There can be no assurance, however, that Program
Suppliers will continue to distribute through the PPT System, continue
to have available for distribution Cassettes which the Company can
distribute on a profitable basis, or continue to remain in business. In
addition, some of the Company's agreements with Program Suppliers may be
terminated upon a relatively short notice, and any such termination or
other discontinuation of its supply of Cassettes, including with respect
to either of its Major Suppliers, could have a material adverse effect
on the revenues of the Company. Even if Cassettes are otherwise
available from Program Suppliers to the Company, there can be no
assurance that they will be made available on terms acceptable to the
Company.
Certain Program Suppliers have requested financial or performance
commitments from the Company, including advances, letters of credit or
guarantees as a condition to obtaining certain titles. In certain
cases, the Company has provided such commitments to induce Program
Suppliers to begin participation in the PPT System and to demonstrate
its financial benefits. The Company determines whether to provide such
commitments on a case-by-case basis, depending upon the Program
Supplier's success with such titles prior to home video distribution and
the Company's assessment of expected success in home rental
distribution. This practice could result in losses which may be
material.
Turnover of Retailers; Compliance with PPT System Policies;
Retailer Financing Program. The video retail market is subject to a
significant turnover of Retailers each year due to such factors as
business failure, consolidation or acquisition. In addition, Retailers
who remain in business may experience adverse operating results which
would affect their ability to make payments to the Company. There can
be no assurance that changes adverse to Retailers may not occur which
might have a material adverse effect on the Company's operations.
Moreover, certain Retailers in the past have failed to follow the
Company's policies for handling Cassettes, rental transactions and
reporting. Although the Company has compliance standards, audit
procedures and computerized transaction monitoring which can lead to the
expulsion of a non-complying participating Retailer from the PPT System,
there can be no assurance that such procedures will adequately guard
against abuses of the Company's policies. The inability to adequately
prevent such abuses could have a material adverse effect on the
Company's operations.
The Company has established a retailer financing program whereby
the Company will provide financing on a selective basis to certain
Retailers which the Company believes demonstrate prospects for
substantial growth in the industry. In connection with these
financings, the Company typically makes a loan and/or equity investment
in the Retailer. Each loan or investment generally ranges from $200,000
to $2.0 million. As part of such financing, the Retailer typically
agrees to cause all of its current and future retail locations to
participate in the PPV System for a designated period of time. The
Board of Directors has authorized up to $14 million to be used in
connection with the Company's retailer financing program, and as of
December 31, 1995, the Company had loaned or invested approximately
$7.1 million. At this time, the Company does not anticipate making
additional loans or investments under this program. These financings
are speculative in nature and involve a high degree of risk, and no
assurance can be given that the Company will earn a satisfactory return,
if any, from such investments. As of December 31, 1995, the Company had
reserved approximately $1.9 million, or 26% of the total amount the
Company had made in loans and investments under its retailer financing
program. In this regard, the Company's acquisition of its initial
interest in E-1 resulted from an investment made pursuant to its
retailer financing program.
Seasonality of the Home Video Industry. Program Suppliers tend to
introduce hit titles during two periods of the year, the early summer
and the Christmas holiday season. Since the release to home video
usually follows the theatrical release by approximately six months
(though significant variations do occur with respect to certain titles),
the seasonal peaks for home video also generally occur during the early
summer and the Christmas holiday season. The Company believes that its
volume of rental transactions reflects, in part, this seasonal pattern,
although growth in the numbers of Program Suppliers, titles available to
the Company and participating Retailers may tend to obscure any seasonal
effect. The Company believes that such seasonal variations may be
reflected in future quarterly patterns of its revenues and earnings.
Competition in the Video Distribution Industry. The home video
industry is highly competitive. The Company has one direct competitor
presently distributing cassettes on a basis similar to the PPT System,
SuperComm, Inc., a wholly-owned subsidiary of The Walt Disney Company,
which has thus far concentrated its efforts primarily in the supermarket
industry. In addition, the Company faces substantial competition from
conventional distributors. Many of the Company's competitors, including
SuperComm, Inc., have existing distribution networks, long-standing
relationships with Program Suppliers and Retailers, and/or significantly
greater financial resources than the Company.
Competition from Alternative Delivery Technologies. In addition
to the direct competition described above, the Company faces indirect
competition from alternative delivery technologies which are intended to
provide video entertainment directly to the consumer. These
technologies include: (1) direct broadcast satellite transmission
systems, which broadcast movies in digital form direct from satellites
to small antennas in the home; (2) cable systems which may transmit
digital format movies to the home over cable systems employing fiber
optic technology; and (3) pay cable television systems which may employ
digital data compression techniques to increase the number of channels
available and hence the number of movies which can be transmitted.
Another source of indirect competition comes from Program Suppliers
releasing titles intended for "sell-through" rather than rental to
consumers at approximately $10 to $30. To date, such "sell-through"
pricing has generally been limited to certain newly released hit titles
with wide general family appeal. As the Company's business is dependent
upon the existence of a home video rental market, a substantial shift in
the video business to alternative technologies or "sell-through"
policies could have a material adverse effect on the Company's
operations.
Dependence on Computerization. The success of the PPT System
depends, among other things, on the ability of the Company to track each
rental or sale of Cassettes which are in the PPT System. The Company
continues to expand and refine its computer system. There can be no
assurance that the Company will not experience future problems with
computer software or hardware, and such problems could have a material
adverse effect on the Company's operations.
Retail Video Business
Expansion Strategy; Lack of Profitability. BlowOut Entertainment
is following an aggressive expansion and growth strategy for opening
additional "store within a store" outlets in Wal-Mart and K-Mart stores
in 1996. Substantial capital outlays are required to open each new
store. The Company does not anticipate that its current credit
facilities will be sufficient to fund all of the planned expansion, and
as a result BlowOut Entertainment may have to obtain other debt or
equity financing or expand less aggressively.
BlowOut Entertainment is currently exploring the possibility of
obtaining debt and equity financing from various private investors and
is working with investment banking firms to explore these and other
possible equity financings. There can be no assurance that any such
financing will be available on terms acceptable to BlowOut Entertainment
or that BlowOut Entertainment will be able to acquire such additional
financing as quickly as may be required to successfully implement
BlowOut Entertainment's current growth plans. In addition, management
resources will be required to expand these operations. There can be no
assurance that BlowOut Entertainment will be able to attract and retain
a sufficient number of skilled store managers to implement this growth
strategy. Furthermore, the BlowOut Entertainment business has not
operated at a profit, and there can be no assurance that it will be able
to meet the demands of a growth strategy and operate at a profit at any
time in the foreseeable future.
Dependence on Wal-Mart and K-Mart. BlowOut Entertainment has
entered into master leases with Wal-Mart and K-Mart, respectively, for
its stores. The master leases provide for an initial five-year term for
each new store, with an additional five-year optional renewal term.
Either party to the Wal-Mart lease can elect to close stores which fail
to generate a minimum level of revenues, and any such closure at the
request of BlowOut Entertainment would require BlowOut Entertainment to
pay Wal-Mart a termination fee (equal to $3,000) for each store closed.
BlowOut Entertainment does not have any exclusive right to open stores
or any control over the geographic area or market in which the new
stores will be located. The master leases also allow Wal-Mart or K-
Mart, under certain conditions, to restrict the ability of BlowOut
Entertainment to sell videocassette titles which are being sold in
particular Wal-Mart or K-Mart stores, respectively.
BlowOut Entertainment is highly dependent on its relationships
with its host stores. There can be no assurance that Wal-Mart or K-Mart
will open additional stores in locations which are commercially viable
for retail video operations, or that the number of future stores opened
by Wal-Mart or K-Mart will meet BlowOut Entertainment's current
expansion plans. Either host store could change its development or
operation plans at any time, and there can be no assurance that BlowOut
Entertainment will be able to operate stores within either the Wal-Mart
or K-Mart stores for any period of time following the terms provided in
the master leases. Furthermore, if either Wal-Mart or K-Mart terminates
its relationship with BlowOut Entertainment, there can be no assurance
that BlowOut Entertainment could find a suitable national retail mass
merchant with sufficient stores to support their "store within a store"
retail concept. At the present time, BlowOut Entertainment is the only
video rental retailer operating "store within a store" video outlets in
Wal-Mart stores. Management believes that Wal-Mart's strategy is to
have more than one vendor operating these types of outlets, and
therefore, there can be no assurance that Wal-Mart will not lease space
to one or more additional video retailers.
Geographic Diversity; Efficiencies of Operations. BlowOut
Entertainment operates "store within a store" outlets in 21 different
states. The geographic diversity of these states poses special
challenges with respect to store management, inventory controls and
communications. The opening of additional stores in new states or
regions could lead to redundancies and inefficiencies in operations.
Competition. The video rental industry is highly competitive,
with numerous national, regional and local video operators. Competitors
such as Blockbuster Video have substantially greater financial resources
and marketing capabilities. Because a majority of the Wal-Mart and
K-Mart stores in which BlowOut Entertainment operates retail video
outlets are located in rural areas, the video operations also face
competition from supermarket rental operations, one of the fastest
growing segments of the video rental market. In addition, BlowOut
Entertainment competes with a number of other leisure and retail
entertainment providers, including television, movie theaters, bowling
alleys and sporting events.
Alternative Delivery Technologies. BlowOut Entertainment's retail
video operations are subject to the same competition from alternative
delivery technologies for home video entertainment as the PPT System.
See the Risk Factor "Alternative Delivery Technologies" under PPT
Business for further information.
Quarterly Fluctuations. Future operating results may be affected
by the number and timing of store openings, the quality of new release
titles available for rental and sale, weather and other special and
unusual events. Spending on entertainment items such as video rentals
and purchases is discretionary and may be particularly susceptible to
regional and national economic conditions. In addition, any
concentration of new store openings and related new store pre-opening
costs near the end of a fiscal quarter could have an adverse effect on
the financial results for that quarter. Operating results for BlowOut
Entertainment's retail video operations may also be affected by seasonal
fluctuations in the release of home video titles. See the Risk Factor
"Seasonality of the Home Video Industry" under PPT Business for further
information.
Integration of Retail Video Operations into Rentrak. Through its
acquisition of the Supercenter operations and a controlling interest in
E-1, the Company has significantly increased the overall level and scope
of its business operations. The expansion in the scope of the Company's
operations has resulted in a need for a significant investment in
infrastructure and systems. The challenges of BlowOut Entertainment's
expansion are expected to be magnified with the opening of additional
outlets. These challenges include, without limitation, securing
adequate financial resources to successfully integrate and manage the
operation, retention of key employees, integration of the outlets into
the PPT Program and consolidation of certain operations, each of which
could pose significant challenges. BlowOut Entertainment's inability to
meet these challenges could adversely affect their ability to expand or
attain profitability for the retail video operations.
Sports Apparel Business
Competition. The Company's sports apparel business faces intense
competition for customers and for suitable store locations from a
variety of retailers. TPI and Team Spirit compete with traditional and
specialty retailers (regional chains, specialty stores, local operators
and mail order companies), mass merchandisers (discount stores and
department stores) and large format retailers (warehouse and superstore
operators). Some of these competitors have substantially greater
resources than the Company.
Seasonality. The sports apparel businesses is heavily dependent
upon the Christmas holiday selling season. It is estimated that
approximately between 30% to 40% of the Company's revenues from its
sports apparel business and substantially all of its profits are
generated during that time period. Any substantial decrease in sales
for such period could have a material adverse effect on the
profitability of the Company's sports apparel business. Sales during
the 1995 Christmas holiday selling season at retail sports apparel
stores owned or franchised by the Company were lower than sales during
such season in recent years.
Economic Conditions. The retail sports apparel industry is
dependent upon the economic environment and the level of consumer
spending. Spending on items sold in the Company's sports apparel
business is discretionary and may be particularly susceptible to
regional and national economic conditions. There can be no assurance
that a prolonged economic recession would not have a material adverse
effect on the Company's sports apparel business.
Dependence on Key Personnel
The Company's future success depends on the continued
contributions of Ron Berger, the Company's founder and Chief Executive
Officer. The loss of Mr. Berger's services could have a material
adverse effect on the Company's operations. There can be no assurance
that the Company could find a suitable replacement in a timely manner.
The Company maintains a $5.0 million "key man" life insurance policy on
Mr. Berger and has entered into an employment agreement with Mr. Berger
that expires on May 31, 1999.
SELLING SHAREHOLDERS
The following table identifies each of the Selling Shareholders
and provides certain information with respect to the Shares beneficially
held and to be offered under this Prospectus from time to time by each
Selling Shareholder.
<TABLE>
<CAPTION>
Number of Shares to
Number of be Acquired Upon
Name Shares Held Warrant Exercise
<S> <C> <S>
Jack Silverman 600,000 -----
James Robert Silverman 50,000 -----
Linda Ann Carlquist 50,000 -----
Robert Joel Silverman 50,000 -----
Steven Charles Silverman 50,000 -----
David A. Silverman 50,000 -----
Rita A. Brown 26,000 -----
Paul Gerson 1,000 -----
Harold W. Heyer, Jr. 1,000 -----
The Walt Disney Company ----- 569,500 (1)
Twentieth Century Fox
Film Corporation ----- 369,500 (2)
Total 878,000 939,000
__________________________
(1) Disney obtained warrants to acquire 2,673,750 shares of
Common Stock from the Company on July 22, 1994 pursuant to the Disney
Warrant, of which warrants to acquire a total of 569,500 Shares are
currently exercisable. The exercise price under the Disney Warrant is
$7.13 per share. In connection with the Disney Warrant, the Company
agreed to file a registration statement with the Commission covering the
Shares issuable to Disney upon exercise of such warrants and to
indemnify Disney against claims made against it arising out of, among
other things, statements or omissions made in such registration
statement, including the prospectus contained therein. The Company and
Disney entered into the Disney Warrant in connection with the Company's
execution of a pay-per-transaction agreement with Buena Vista Pictures
Distribution, Inc. in July 1994 (the "Buena Vista Agreement"). In
addition to the 569,500 Shares beneficially held by Disney covered by
this Prospectus, under the Disney Warrant, warrants to acquire an
additional 854,250 shares of Common Stock will become exercisable over
the next three years, warrants to acquire up to an additional 750,000
shares of Common Stock will become exercisable in the event that certain
performance targets under the Buena Vista Agreement are met, and
warrants to acquire an additional 500,000 shares of Common Stock will
become exercisable in the event the Buena Vista Agreement is renewed,
subject to certain terms and conditions. The additional shares of
Common Stock underlying such warrants are not covered by this
prospectus. Except for the foregoing, the Company is unaware of any
material relationship between Disney and the Company in the past three
years.
(2) Fox obtained warrants to acquire 800,000 shares of Common
Stock from the Company on September 11, 1992 pursuant to the 1992 Fox
Warrant and warrants to acquire 423,750 shares of Common Stock from the
Company on July 22, 1994 pursuant to the 1994 Fox Warrant. Of the
warrants issued pursuant to the 1992 Fox Warrant, warrants to acquire
800,000 shares of Common Stock are currently exercisable. Of the
warrants issued pursuant to the 1994 Fox Warrant, warrants to acquire
169,500 shares of Common Stock are currently exercisable. The 369,500
Shares being registered hereunder on behalf of Fox represent 200,000
Shares issuable pursuant to the 1992 Fox Warrant plus 169,500 Shares
issuable pursuant to the 1994 Fox Warrant. The exercise price under the
1992 Fox Warrant is $7.14 per share and the exercise price under the
1994 Fox Warrant is $7.13 per share. In connection with both Fox
Warrants, the Company agreed to file a registration statement with the
Commission covering the Shares issuable to Fox upon exercise of such
warrants and to indemnify Fox against claims made against it arising out
of, among other things, statements or omissions made in such
registration statement, including the prospectus contained therein. The
Company and Fox entered into the 1992 Fox Warrant in connection with the
Company's execution of the Pay-Per-Transaction Agreement dated as of
September 11, 1992 with FoxVideo, Inc. (the "Fox Agreement"). The
Company and Fox entered into the 1994 Fox Warrant pursuant to the 1992
Fox Warrant and in connection with the Company's execution of the Buena
Vista Agreement. In addition to the 369,500 Shares beneficially held by
Fox covered by this Prospectus, (i) under the 1992 Fox Warrant, warrants
to acquire an additional 600,000 shares of Common Stock are exercisable
and the shares underlying such warrants were previously registered with
the Commission and warrants to purchase an additional 200,000 shares of
Common Stock will be issued and become exercisable on September 11, 1997
in the event the Fox Agreement is renewed, subject to certain terms and
conditions, and (ii) under the 1994 Fox Warrant, warrants to acquire an
additional 254,250 shares of Common Stock will become exercisable over
the next three years. The additional shares of Common Stock underlying
such warrants are not covered by this prospectus. Except for the
foregoing, the Company is unaware of any material relationship between
Fox and the Company in the past three years.
</TABLE>
All of the Shares offered hereby are to be sold on behalf of the
Selling Shareholders, and the Company will not receive any proceeds from
the sale of the Shares. Because the Selling Shareholders may sell all
or part of their Shares pursuant to this Prospectus, and this Offering
is not being underwritten, no estimate can be given as to the number of
and percentage of Shares that will be held by the Selling Shareholders
upon termination of this Offering. If all the Shares listed below are
sold, the Selling Shareholders will not hold any shares of the Company's
Common Stock upon termination of this Offering (other than pursuant to
the warrants described in Notes (1) and (2) above.)
All of the Selling Shareholders other than Fox and Disney received
the Shares in connection with the Company's acquisition of certain
assets of Supercenter in August 1995 (the "Acquisition"). Jack
Silverman, one of the Selling Shareholders, is the sole shareholder of
Supercenter. In connection with such acquisition, the Company agreed to
file this Registration Statement with the Commission covering the Shares
offered hereby and to indemnify each such Selling Shareholder against
claims made against them arising out of, among other things, statements
or omissions made in this Registration Statement, including this
Prospectus. Except for the Supercenter Agreement and the transactions
contemplated thereby, the Company is unaware of any material
relationship between any of such respective Selling Shareholders and the
Company or its affiliates in the past three years.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling
Shareholders directly or through brokers, agents or dealers who may
receive compensation in the form of commissions. The Shares may be sold
in the over-the-counter market on the Nasdaq National Market, through
negotiated transactions or otherwise, or in private transactions, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at prices otherwise negotiated. Any such
brokers, agents or dealers who effect a sale of the Shares may be deemed
to be "underwriters" within the meaning of the Securities Act.
The Company has advised each Selling Shareholder that he or she
and any such brokers, dealers or agents who effect a sale of the Shares
are subject to the prospectus delivery requirements under the Securities
Act. The Company also has advised each Selling Shareholder that in the
event of a "distribution" of his Shares, such Selling Shareholder and
any broker, dealer or agent who participates in such distribution may be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including without limitation Rule 10b-6.
The Company will pay substantially all of the expenses incident to
the registration of the Shares, estimated to be approximately
$73,000.00, as generally required pursuant to the agreements referred to
elsewhere herein setting forth the Company's obligations to register the
respective Shares owned by the Selling Shareholders. In addition, under
such agreements, the Selling Shareholders will generally be indemnified
by the Company against certain liabilities, including liabilities under
the Securities Act.
The Company's Common Stock is traded over-the-counter on the
Nasdaq National Market. The last reported sale of the Company's Common
Stock as of a recent date is set forth on the cover page of this
Prospectus. Prospective purchasers should obtain current information
regarding the trading price of the Common Stock.
LEGAL MATTERS
The legality of the Shares offered hereby is being passed upon for
the Company by Garvey, Schubert & Barer, Portland, Oregon.
EXPERTS
The consolidated financial statements and schedule included in the
Company's 1995 Annual Report on Form 10-K for the year ended March 31,
1995 and the financial statements of Supercenter Entertainment
Corporation as of December 31, 1994 and 1993 and for the years then
ended included in the Company's Form 8-K dated August 31, 1995, which
are incorporated by reference herein, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated by reference in
reliance upon the authority of said firm as experts in giving said
reports.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses relating to the registration of the Shares will be
borne by the Company. Such expenses are estimated to be as follows:
<TABLE>
<S> <C>
SEC Registration Fee $ 3,217
Accountant's fees* 15,000
Legal fees* 50,000
Miscellaneous/Blue Sky* 4,783
Total $ 73,000
* Estimated
</TABLE>
Item 15. Indemnification of Directors and Officers.
Article VIII, Section 2 of the Company's amended and restated
articles of incorporation ("Article VIII") and Article X of the
Company's restated bylaws ("Article X") require the Company to indemnify
officers, directors and employees to the fullest extent authorized by
the Oregon Business Corporation Act ("the Act"). The effect of these
provisions is summarized below but the description is qualified in its
entirety by reference to the Act, Article VIII and Article X.
Indemnification is granted in respect to any action, suit or
proceeding (other than an action by or in the right of the corporation)
against all expense, liability and loss reasonably incurred (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and
amounts paid in settlement), if the indemnitee's conduct was in good
faith, the indemnitee reasonably believed that his conduct was in the
best interests of the Company, or at least not opposed to its best
interests, and, with respect to any criminal proceeding, the indemnitee
had no reasonable cause to believe his conduct was unlawful.
Indemnification is not permitted in connection with a proceeding in
which a person is adjudged liable on the basis that personal benefit was
improperly received, unless indemnification is permitted by a court upon
a finding that the person is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances.
In addition, indemnification is granted in respect to any
proceeding by or in the right of the Company against the expenses
(including attorneys' fees) actually and reasonably incurred if the
person acted in good faith and a manner reasonably believed to be in, or
not opposed to, the best interests of the Company. No right of
indemnity is granted if the person is adjudged liable to the Company,
unless permitted by the court.
Termination of a proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent is not,
of itself, determinative that the person did not meet the standard of
conduct described above. If wholly successful on the merits of a
proceeding, a person is entitled to indemnity as a matter of right.
Because the limits of indemnity under Oregon law are not clearly
defined, Article VIII and Article X may provide indemnity broader than
that described above.
Article VIII and Article X provide that the right of
indemnification is a contract right and include the right to be paid by
the Company the expenses incurred in defending a proceeding in advance
of its final disposition; provided that, if required by Oregon law, the
person seeking advances provides to the Company an undertaking to repay
advanced amounts if it is determined by a final adjudication that the
recipient is not entitled to indemnity. Any person claiming indemnity
is explicitly authorized to sue the Company for payment and the Company
will have the burden of proving the claimant failed to meet the
standards of conduct making indemnity permissible. If the person
claiming indemnity is successful in whole or in part in such a suit (or
in a suit brought by the Company to recover an advancement of expenses),
the person claiming indemnity shall also be entitled to be paid the
expense of prosecuting (or defending) the suit.
Article VIII and Article X also provide that the Company may
maintain insurance to protect itself and its directors, officers,
employees or agents against any expense, liability or loss whether or
not the Company has the power to indemnify such person against such
expense, liability or loss under Oregon law. The Company currently has
liability insurance to indemnify its directors and officers against
expense, liability or loss arising from claims by reason of their acts
or omissions as officers and directors.
The rights of indemnification described above are not exclusive of
any other rights of indemnification to which the persons indemnified may
be entitled under any agreements, statute, vote of shareholders, action
of directors or otherwise.
Item 16. List of Exhibits.
<TABLE>
<CAPTION>
Exhibit Number Description
<C> <S>
2 Asset Purchase Agreement, dated as of August 25, 1995,
among Rentrak Corporation, Supercenter Entertainment
Corporation and Jack Silverman, and the principal
exhibits thereto (the "Asset Purchase Agreement").1
3.1 Amended and Restated Articles of Incorporation of the
Company and amendments thereto.2
3.2 By-laws of the Company.3
5 Opinion re: legality.
23.1 Consent of Attorneys (incorporated in Exhibit 5
hereof).
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (previously filed).
1. Filed as an exhibit to the Company's Current Report on Form 8-K
dated August 25, 1995 (filed September 1, 1995), and incorporated
by reference herein.
2. Filed as Exhibit 3.1 to the Company's Registration Statement on
Form S-3 filed on November 21, 1994, and incorporated by reference
herein.
3. Filed as Exhibit 10.8 to the Company's 1991 Annual Report on Form
10-K filed on May 6, 1991, and incorporated by reference herein.
</TABLE>
Item 17. Undertakings.
(a) 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;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or most recent post-
effective amendment thereof) which individually
or in the aggregate, represent a fundamental
change in the information set forth in the
registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously
discussed in the registration statement or any
material change to such information in the
registration statement.
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information
required to be included in a post-effective
amendment by those paragraphs is contained in
periodic reports filed by registrant pursuant to
Sections 13 or 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.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 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.
(h) Insofar as indemnification for liabilities under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant
to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrant 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 of 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 court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
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 Amendment to Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Portland,
State of Oregon on February 15, 1996.
Registrant: Rentrak
Corporation
By /s/ Ron Berger
Ron Berger,
Chairman of the
Board, Chief
Executive Officer
and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <S> <S>
* Chairman of the Board, Chief Executive February 15, 1996
Officer and President
Ron Berger (Principal Executive Officer)
/s/ F. Kim Cox Executive Vice President-Finance and February 15, 1996
Chief Financial Officer
F. Kim Cox (Principal Financial Officer and Chief
Accounting Officer)
* Director February 15, 1996
James P. Jimirro
* Director February 15, 1996
Muneaki Masuda
* Director February 15, 1996
Peter Dal Bianco
* Director February 15, 1996
Bill LeVine
* Director February 15, 1996
Stephen Roberts
* The undersigned, by signing his name hereto, does sign and
execute this Amendment to Registration Statement pursuant to a Power of
Attorney executed on behalf of the above-named officers and directors
and heretofore filed with the Securities and Exchange Commission.
</TABLE>
Date: February 15, 1996 /s/ F. Kim Cox
F. Kim Cox
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
<S> <S>
2 Asset Purchase Agreement, dated as of
August 25, 1995, among Rentrak
Corporation, Supercenter Entertainment
Corporation and Jack Silverman, and
the principal exhibits thereto (the
"Asset Purchase Agreement").1
3.1 Amended and Restated Articles of
Incorporation of the Company and
amendments thereto.2
3.2 By-laws of the Company.3
5 Opinion re: legality.
23.1 Consent of Attorneys (incorporated in
Exhibit 5 hereof).
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (previously filed).
1. The Asset Purchase Agreement was filed as an exhibit to the Company's
Current Report on Form 8-K dated August 25, 1995 and is incorporated
by reference herein.
2. Filed as Exhibit 3.1 to the Company's Registration Statement on Form
S-3 filed on November 21, 1994, and incorporated herein by reference.
3. Filed as Exhibit 10.8 to the Company's 1991 Annual Report on Form 10-
K filed on May 6, 1991, and incorporated by reference herein.
</TABLE>
(TEXT>
Voice Mail Ext. 3107
February 15, 1996
Rentrak Corporation
7227 N.E. 55th Avenue
Portland, OR 97218
Re: Legality of 939,000 Shares of Common Stock
to be registered on Amendment No. 1 to Form S-3 Registration
Statement
Dear Sirs:
We have been requested by you to render this opinion in connection
with the proposed registration of 939,000 shares of common stock (the
"Shares"), par value $.001 per share, pursuant to Amendment No. 1 to
Registration Statement on Form S-3 (the Registration Statement ) to be
filed with the Securities and Exchange Commission on or about
February 15, 1996. We have acted as counsel to you in connection with
the registration of the Shares, which Shares will be issued upon the
exercise of the Warrant Agreement dated September 11, 1992 between you
and Twentieth Century Fox Film Corporation ("Fox") and the Warrant
Agreement dated July 22, 1994 between you and Fox, and the Warrant
Agreement dated July 22, 1994 between you and The Walt Disney Company
(collectively, the "Warrants").
We have reviewed the Registration Statement, Articles of
Incorporation of Rentrak Corporation, as amended, and such other
documents, corporate records, and other instruments as we have deemed
necessary for purposes of this opinion. As to matters of fact which
have not been independently established, we have relied on
representations of officers of the Company.
Based on such review, we are of the opinion that under the
corporate laws of Oregon, the 939,000 Shares of the Company's common
stock being registered in connection with the Warrants will, when issued
pursuant to the exercise of the Warrants and paid for as contemplated
therein, be legally issued, fully paid and non-assessable shares of
common stock.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to our firm under the
heading Legal Matters in the Registration Statement and related
Prospectus.
Sincerely,
/S/ Garvey, Schubert & Barer
Garvey, Schubert & Barer
84788/30086.00717
Consent Of Independent Public Accountants
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-3,
File No. 33-65463 of our reports dated May 26, 1995 included in Rentrak
Corporation s Form 10-K for the year ended March 31, 1995, and our
reports dated October 16, 1995, relating to the financial statements of
Supercenter Entertainment Corporation as of December 31, 1994 and 1993,
appearing in Rentrak Corporation s Form 8-K dated August 31, 1995, and
to all references to our firm included in this Registration Statement.
/S/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Portland, Oregon,
February 9, 1996
