<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT ON FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
JUNE 30, 1996
THE 3DO COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 0-21336 94-3177293
(State or other jurisdiction of (Commission File No.) (I.R.S. Employer
incorporation or organization) Identification No.)
600 GALVESTON DRIVE,
REDWOOD CITY, CALIFORNIA 94063
(Address of principal executive offices)
(415) 261-3000
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 30, 1996, The 3DO Company ("Registrant") acquired certain
assets and assumed certain liabilities of New World Computing, Inc. ("NWC"), a
wholly-owned subsidiary of NTN Communications, Inc. ("NTN") pursuant to the
terms and conditions of the Agreement of Purchase and Sale of Assets dated as of
June 28, 1996, by and among Registrant, NWC, and NTN. In exchange for the assets
and the assumption of certain liabilities, Registrant has issued an aggregate of
one million seventeen thousand nine hundred fifty-three (1,017,953) shares of
Registrant's common stock (the "Shares") to NWC. Registrant has guaranteed to
NWC that the value received as consideration for the transaction will be
approximately ten million, one hundred seventy nine thousand, five hundred
thirty dollars ($10,179,530) (the "Guaranteed Amount") during a period of time
following the closing, which shall be no later than June 30, 1997. In the event
that, on the appropriate valuation date, the total value of the Shares which
have been sold by and/or which are still held by NWC as of such date is less
than the Guaranteed Amount, Registrant will be obligated to make a cash payment
to NWC for the difference.
Assets acquired include cash, accounts receivable, royalties
receivable, inventory, prepaid expenses, intangible assets and fixed assets. The
intangible assets of NWC include the workforce, certain trademarks and
tradenames, technologies, rights to products which have been developed by NWC,
rights to products which are under development by NWC, certain licensing
agreements and other miscellaneous assets. Fixed assets consist of computer
equipment, peripherals and software used in the development of multimedia
entertainment products. Current liabilities assumed included accounts payable,
accruals and short term debt. Registrant intends to continue to use the fixed
assets to continue the business of NWC in the form of a division of Registrant's
Studio 3DO. Additionally, NWC and NTN have entered into a noncompetition
agreement with 3DO with respect to the business of 3DO's NWC division for a
three (3) year term.
Prior to the acquisition there were no material relationships between
Registrant, its officers, directors, or associates and NWC, NTN, or any of its
affiliates.
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS.
Financial statements of New World Computing, Inc., the
acquired business, follow.
Balance Sheet as of December 31, 1995
Statement of Operations and Retained Earnings for
the year ended December 31, 1995
Statement of Cash Flows for the year ended December
31, 1995
Notes to Financial Statements
Independent Auditors' Report
<PAGE> 4
NEW WORLD COMPUTING, INC.
BALANCE SHEET
December 31, 1995
(in 000's, except share data)
ASSETS
<TABLE>
Current assets:
<S> <C>
Cash $ 0
Accounts receivable - trade, net of allowance for doubtful accounts and returns
of $1,573 1,865
Inventory, net of allowance for obsolescence of $41 885
Prepaid expenses and other current assets 102
------
Total current assets $2,852
Software development costs, net of accumulated amortization of $901 2,517
Fixed assets, net of accumulated depreciation of $97 77
Other assets 2
------
Total assets $5,448
======
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 878
Income taxes payable 40
Due to parent (note 3) 3,559
Short-term borrowings (note 2) 722
------
Total current liabilities $5,199
------
Shareholder's equity:
Common stock, no par value, 1,000,000 share authorized; issued and outstanding
100 shares 1
Retained earnings 248
------
Total shareholder's equity 249
------
Total liabilities and shareholder's equity $5,448
======
</TABLE>
See accompanying notes to financial statements.
<PAGE> 5
NEW WORLD COMPUTING, INC.
STATEMENT OF OPERATIONS AND RETAINED EARNINGS
For the year ended December 31, 1995
(in thousands, except shares and per share data)
<TABLE>
<S> <C>
Product sales $ 5,544
Returns and allowances (1,601)
License fees and royalties 1,495
-------
Total revenue 5,438
Cost of sales 1,882
-------
Gross profit 3,556
-------
Operating expenses:
Research and development 1,140
Sales and marketing 1,149
General and administrative 1,813
-------
Total operating expenses 4,102
-------
Operating income (loss) (546)
Interest expense 58
-------
Loss before income taxes (604)
Income taxes 40
-------
Net loss (644)
Retained earnings, beginning of year 892
-------
Retaining earnings, end of year $ 248
=======
</TABLE>
See accompanying notes to financial statements.
<PAGE> 6
NEW WORLD COMPUTING, INC.
STATEMENT OF CASH FLOWS
For the year ended December 31, 1995
(in thousands)
Cash flows from operating activities:
<TABLE>
<S> <C>
Net earnings (loss) $ (644)
Adjustments to reconcile net loss to net cash provided (used by) operating
activities
Depreciation and amortization 941
Provision for doubtful accounts and allowance for returns and
allowances 2,455
(Increase) decrease in:
Accounts receivable (2,238)
Accounts receivable - officers 219
Inventory (205)
Prepaid expenses and other assets (71)
Increase (decrease) in:
Accounts payable and accrued liabilities 94
Income taxes payable 40
-------
Net cash provided by operating activities 591
-------
Cash flows from investing activities:
Additions to fixed assets (29)
Payments for software development costs (1,689)
-------
Net cash used in investing activities (1,718)
-------
Cash flows from financing activities:
Advances from parent 826
Proceeds from short term borrowings 277
-------
Net cash provided by financing activities 1,103
-------
Net decrease in cash (24)
Cash at beginning of year 24
-------
Cash at end of year $ 0
=======
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 58
=======
</TABLE>
See accompanying notes to financial statements.
<PAGE> 7
NEW WORLD COMPUTING, INC.
NOTES TO FINANCIAL STATEMENTS
For the year ended December 31, 1995
(in thousands)
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
New World Computing, Inc. ("The Company") was organized under the laws
of the state of California in 1984 for the purpose of developing and
distributing interactive video game software. In 1993 the Company
became a wholly owned subsidiary of NTN Communications, Inc.
The Company operates under several distribution and license agreements
in the United States, United Kingdom, Australia, Germany, France and
Switzerland. The products are sold primarily to wholesale distributors.
Royalties result from licensing rights sold to foreign publishers.
DEPRECIATION
Depreciation of fixed assets is computed using the straight-line method
over the estimated useful lives of the assets (generally five years).
INVENTORY
Inventory is valued at the lower of cost (first-in, first-out) or
market and consists principally of finished goods and component
materials.
REVENUE RECOGNITION
Product Sales: Revenue is recognized when the product is shipped.
Subject to limitations, the Company permits customers to obtain
exchanges within certain specified periods, and provides price
protection on certain unsold merchandise. The Company provides an
allowance for returns.
License Revenue: For those agreements which provide the customers the
right to multiple copies in exchange for guaranteed amounts, revenue is
recognized upon execution of the agreement since the Company has no
remaining obligations or incremental costs. Per copy royalties on sales
that exceed the guarantee are recognized as earned.
INCOME TAXES
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases, and operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.
<PAGE> 8
NEW WORLD COMPUTING, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SOFTWARE DEVELOPMENT COSTS
The Company capitalizes costs related to the development of certain
software products. In accordance with Statement of Financial Accounting
Standards No. 86, capitalization of costs begins when technological
feasibility has been established and ends when the product is available
for general release to customers. Amortization of costs for specific
products is recognized on the relative value basis over the estimated
economic life of each specific product, generally within one year.
Amounts expensed in 1995 was $920.
ADVERTISING COSTS
The Company accounts for advertising costs in accordance with SOP No.
93-7, Reporting on Advertising Costs. Direct response advertising is
capitalized only if customer sales can be directly correlated to the
advertising costs and if future benefit can be demonstrated.
Capitalized advertising costs are amortized using the straight-line
method over the estimated benefit period. Advertising expense for 1995
was $422. Amounts capitalized at December 31, 1995 was $56.
USE OF ESTIMATES
Management of the Company has made a number of estimates and
assumptions relating to the reporting of assets and liabilities,
revenue and expenses, and the disclosure of contingent assets and
liabilities to prepare these financial statements in conformity with
generally accepted accounting principles. Actual results could differ
from those estimates.
(2) SHORT-TERM BORROWINGS
Short-term borrowings consists of a $750 variable rate line of credit,
which matures in October 1996. The line bears interest at the 30-day
commercial paper rate plus 2.9% (8.93% at December 31, 1995) and is
secured by accounts receivable. The amount outstanding at December 31,
1995 was $722.
(3) DUE TO PARENT
Due to parent consists of advances provided by the Company's parent,
NTN Communications, Inc. The advances are due upon demand and do not
bear interest. The amount outstanding at December 31, 1995 was $3,236.
<PAGE> 9
NEW WORLD COMPUTING, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(4) INCOME TAXES
The Company's deferred income taxes resulted primarily from the
differences between financial statement carrying amounts and the
respective tax bases for accounts receivable, inventory and capitalized
software development costs. The Company has no net taxable temporary
differences which would require recognition of deferred tax
liabilities, and due to the uncertainty of future realizability has
reserved for all deferred tax assets for deductible temporary
differences and tax operating loss carryforwards, and accordingly, no
deferred taxes are contained in the accompanying consolidated financial
statements.
The following table summarizes the tax effects of temporary differences
that give rise to significant portions of the deferred tax assets and
deferred tax liabilities at December 31, 1995:
<TABLE>
<S> <C>
Deferred tax assets:
Net operating loss carryforwards $ 1,200
Provision for doubtful accounts and returns 330
Provision for inventory obsolescence 16
Vacation accrual 18
-------
Gross deferred tax assets 1,564
Valuation allowance (542)
-------
Net deferred tax assets 1,022
-------
Deferred tax liabilities:
Software development costs 982
Depreciation 40
-------
Gross deferred tax liabilities 1,022
-------
Net deferred taxes $ 0
=======
</TABLE>
The Company has recorded a valuation allowance against any deferred tax
assets for deductible temporary differences and tax operating loss
carryforwards. The Company increased its valuation allowance by
approximately $40 for the year ended December 31, 1995 primarily as a
result of the increase in tax operating loss carryforwards.
At December 31, 1995, the Company has net operating loss carryforwards
for federal income tax purposes of approximately $3,100 which are
available to offset future federal taxable income, if any through 2010
and net operating loss carryforwards for state income tax purposes of
approximately 50% of the federal amounts which are available to offset
future state taxable income, if any, through 2000. Upon the sale of
assets as described in Note 10, the net operating loss carryforwards
will be absorbed. The Company has historically filed consolidated
returns with its parent and therefore no taxes have been paid and no
cash has been received related to income taxes. Income tax expense of
$40 is based upon alternative minimum tax calculations.
<PAGE> 10
NEW WORLD COMPUTING, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(5) EMPLOYEE BENEFIT PLAN
The Company's employees are included in the parent company's 401(k)
Employee savings Plan, (the Plan) which is available to substantially
all full-time employees over the age of 21. The Plan was implemented
effective in 1994. There have been no discretionary contributions
through December 31, 1995.
(6) FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments", defines the fair value of a
financial instrument as the amount at which the instrument could be
exchanged in a current transaction between willing parties. The Company
believes that the fair value of financial instrument assets and
financial instrument liabilities approximate their carrying value. The
following methods and assumptions were used to estimate the fair value
of financial instruments:
The carrying value of cash, accounts receivable, other assets, accounts
payable and accrued liabilities, short-term borrowings and due to
parent approximates fair value because of the short maturity of those
instruments.
(7) LEGAL ACTIONS
The Company believes, based in part on the advice of outside,
independent legal counsel, that the costs of defending and prosecuting
pending actions will not have a material adverse effect on the
Company's financial position or results of operations and that any
adverse outcome of the litigation also will not result in a material
adverse effect on the Company's financial position or results of
operations.
(8) LIQUIDITY
The Company's ability to meet its obligations when they become due is
dependent upon its ability to generate additional cash flow from
operations or to receive additional advances from its parent.
(9) COMMITMENTS AND CONTINGENCIES
The Company leases office and production facilities and equipment under
agreements which expire at various dates. Certain leases contain
renewal provisions and generally require the Company to pay utilities,
insurance, taxes and other operating expenses. Lease expense under
operating leases totaled $269 in 1995.
<PAGE> 11
NEW WORLD COMPUTING, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Future minimum lease obligations under noncancelable operating leases
at December 31, 1995 are as follows:
<TABLE>
<CAPTION>
YEARS ENDING
- -------------------------------------
<S> <C>
1996 $ 288
1997 210
1998 164
1999 162
2000 161
Thereafter 12
-------------------
Total $ 997
===================
</TABLE>
The Company provides product to third party distributors primarily
throughout the United States. In addition, the Company licenses its
technology and products to licensees outside of the United States.
Concentration of credit risk with respect to trade receivables is
considered moderate due to the small number of relatively large
customers comprising the Company's customer base. In substantially all
cases, collateral is not required from customers in granting credit.
The Company performs ongoing credit evaluations of its customers
financial condition. At December 31, 1995, the Company had no
significant concentrations of credit risk. For the year ended December
31, 1995, the Company received approximately 20% of its revenue from
one customer located in the United Kingdom.
(10) SUBSEQUENT EVENT (UNAUDITED)
On June 28, 1996 the Company and its parent entered into a definitive
agreement to sell all of the assets and business of the Company to The
3DO Company (3DO). In consideration of the sale, 3DO issued to the
Company 1,017,953 shares of common stock of 3DO and assumed
approximately $1,650 of liabilities of the Company. 3DO will be
obligated to make a cash payment to the Company in the event that the
value fo the 3DO stock issued in the transaction falls below an amount
equal to approximately $10 per share during a period following the
closing date.
<PAGE> 12
INDEPENDENT AUDITORS' REPORT
The Board of Directors
New World Computing, Inc.:
We have audited the accompanying balance sheet of New World Computing, Inc. as
of December 31, 1995, and the related statements of operations and retained
earnings, and cash flows for the year then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of New World Computing, Inc. as of
December 31, 1995, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
San Diego, California
April 12, 1996
<PAGE> 13
(b) THE 3DO COMPANY AND NEW WORLD COMPUTING, INC.
PRO FORMA COMBINED FINANCIAL INFORMATION
(UNAUDITED)
The following pro forma combined financial information gives effect to the
acquisition of New World Computing, Inc. ("NWC") by The 3DO Company (the
"Company" or "3DO") on a purchase accounting basis and assumes the transaction
was effected at the beginning of each period presented.
The pro forma statements of operations combine the Company's statements of
operations for the year ended March 31, 1996, and for the three months ended
June 30, 1996, with NWC's statements of operations and retained earnings for the
year ended December 31, 1995, and for the three months ended June 30, 1996,
respectively. NWC's operating results for the three months ended March 31, 1996
have been omitted from the pro forma financial information. During the three
months ended March 31, 1996. NWC's revenue and net income were $1,244,000 and
$28,000, respectively.
The pro forma combined statements of operations are not necessarily indicative
of the future results of operations of the Company or the results of operations
which would have resulted had the Company and NWC been combined during the
periods presented. In addition, the pro forma results are not intended to be a
projection of future results.
The pro forma combined financial information are based upon the attached
historical financial statements of NWC and the historical consolidated financial
statements of the Company included in its annual report on Form 10-K for the
fiscal year ended March 31, 1996 and quarterly report on Form 10-Q for the
fiscal quarter ended June 30, 1996, and should be read in conjunction with those
financial statements and related notes. Certain amounts have been reclassified
to conform to the pro forma presentation.
<PAGE> 14
THE 3DO COMPANY AND NEW WORLD COMPUTING, INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, December 31,
1996 1995
--------------------------------------------------------------
3DO NWC Pro Forma Pro Forma
Adjustments Combined
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Royalties and license fees $ 24,074 $ -- $ -- $ 24,074
Software publishing 7,330 5,438 -- 12,768
Developer products and other 6,514 -- -- 6,514
--------------------------------------------------------------
Total revenues $ 37,918 $ 5,438 $ -- $ 43,356
--------------------------------------------------------------
Cost of revenues:
Royalties and license fees 694 -- -- 694
Software publishing 3,989 1,882 680(b) 6,551
Developer products and other 3,231 -- -- 3,231
--------------------------------------------------------------
Total cost of revenues 7,914 1,882 680 10,476
--------------------------------------------------------------
Gross profit 30,004 3,556 (680) 32,880
--------------------------------------------------------------
Operating expenses:
Research and development 41,184 1,140 -- 42,324
Sales and marketing 6,837 1,149 -- 7,986
Market development advertising 924 -- -- 924
General and administrative 9,535 1,813 237(b) 11,585
--------------------------------------------------------------
Total operating expenses 58,480 4,102 237 62,819
--------------------------------------------------------------
Operating loss (28,476) (546) (917) (29,939)
Net interest and other income (expense) 684 (58) -- 626
--------------------------------------------------------------
Loss before income
and foreign withholding taxes (27,792) (604) (917) (29,313)
Income and foreign
withholding taxes 6,876 40 -- 6,916
--------------------------------------------------------------
Net loss $(34,668) $ (644) $ (917) $(36,229)
==============================================================
Net loss per share $ (1.36) $ (1.37)
======== ========
Shares used in computing per share amounts 25,456 1,018(a) 26,474
======== ===========================
</TABLE>
See accompanying notes to unaudited pro forma combined financial information
<PAGE> 15
THE 3DO COMPANY AND NEW WORLD COMPUTING, INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the three months ended June 30, 1996
--------------------------------------------------------------
3DO NWC Pro Forma Pro Forma
Adjustments Combined
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Royalties and license fees $ 14,178 $ -- $ -- $ 14,178
Software publishing 892 841 -- 1,733
Developer products and other 259 -- -- 259
--------------------------------------------------------------
Total revenues $ 15,329 $ 841 $ -- $ 16,170
--------------------------------------------------------------
Cost of revenues:
Royalties and license fees 186 -- -- 186
Software publishing 133 748 170(b) 1,051
Developer products and other 813 -- -- 813
--------------------------------------------------------------
Total cost of revenues 1,132 748 170 2,050
--------------------------------------------------------------
Gross profit 14,197 93 (170) 14,120
Operating expenses:
Research and development 9,290 536 -- 9,826
In-process research and development 7,700 -- (7,700)(c) --
Sales and marketing 1,144 424 -- 1,568
General and administrative 2,780 423 59(b) 3,262
--------------------------------------------------------------
Total operating expenses 20,914 1,383 (7,641) 14,656
--------------------------------------------------------------
Operating income (loss) (6,717) (1,290) 7,471 (536)
Net interest and other income (expense) 326 (21) -- 305
--------------------------------------------------------------
Income (loss) before income
and foreign withholding taxes (6,391) (1,311) 7,471 (231)
Income and foreign
withholding taxes 4,000 -- -- 4,000
==============================================================
Net income (loss) $(10,391) $ (1,311) $ 7,471 $ (4,231)
===============================================================
Net loss per share $ (0.39) $ (0.15)
======== ========
Shares used in per share computation 26,618 1,018(a) 27,636
======== ===========================
</TABLE>
See accompanying notes to unaudited pro forma combined financial information
<PAGE> 16
THE 3DO COMPANY AND NEW WORLD COMPUTING, INC.
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION
(UNAUDITED)
On June 30, 1996, The 3DO Company (the "Company" or "3DO") effected the purchase
of New World Computing, Inc. (NWC) by issuing 1,017,953 shares of common stock
for all outstanding shares of NWC common stock. Under the terms of the
acquisition agreement, the Company will be obligated to make a cash payment to
NWC if the value of the Company's common stock, issued as consideration, is less
than approximately $10 per share during a period after the closing date. In the
event the contingent right to receive additional cash is triggered, the Company
will account for the payment as an adjustment to the value of the securities
initially issued in the acquisition.
The acquisition of NWC will be accounted for using the purchase method of
accounting. The pro forma financial information reflects an assumed purchase
price of approximately $10.5 million, based on the guaranteed value of the
Company's common stock. The purchase price was assigned to the fair value of the
net assets acquired, including $0.8 million to net tangible assets acquired,
$7.7 million to in-process research and development, $0.8 million to purchased
technology and $1.2 million to goodwill and other intangible assets.
The following adjustments were applied to the historical consolidated financial
statements of 3DO and NWC to arrive at the pro forma combined statements of
operations.
(a) Reflects the issuance of common stock as consideration for the purchase
of NWC.
(b) Reflects the amortization of goodwill and other intangible assets using
the straight-line method over the estimated useful life of 5 years and
reflects the amortization of purchased technology using the
straight-line method over the estimated useful life of 15 months.
(c) Eliminates the nonrecurring write off of in-process research and
development directly attributable to the acquisition of NWC.
<PAGE> 17
(c) EXHIBITS.
23.1 Consent of Independent Auditors
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE 3DO COMPANY
/s/ PAUL J. MILLEY
------------------
Dated: August 22, 1996 Paul J. Milley
Chief Financial Officer
(Principal Financial Officer
and Principal Accounting Officer)
(Duly authorized officer)
<PAGE> 18
EXHIBIT INDEX
Pursuant to Item 601 of Regulation S-K
Exhibit No. Description of Exhibit
23.1 Consent of Independent Auditors
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
The 3DO Company
We consent to the incorporation by reference in registration statements (Nos.
33-71620, 33-80872, 33-84250 and 33-84248) on Form S-8 of The 3DO Company of our
report dated April 12, 1996, relating to the balance sheet of New World
Computing, Inc. as of December 31, 1995 and their related statements of
operations and retained earnings and cash flows for the year then ended, which
report appears in Form 8-K/A, Amendment No. 1 of The 3DO Company dated August
22, 1996.
KPMG Peat Marwick LLP
San Diego, California
August 22, 1996
