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As Filed with the Securities and Exchange Commission on August __, 1996.
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------------------
THE 3DO COMPANY
(Exact name of Registrant as specified in its charter)
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DELAWARE 94-3177293
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization
600 GALVESTON DRIVE
REDWOOD CITY, CA 94063
(415) 261-3000
(Address, including zip code, and telephone number, including area code
of registrant's principal executive offices)
--------------------
JAMES ALAN COOK
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
THE 3DO COMPANY
600 GALVESTON DRIVE
REDWOOD CITY, CA 94063
(415) 261-3000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
Copy to:
NEIL J. WOLFF
WILSON, SONSINI, GOODRICH & ROSATI
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304
(415) 493-9300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 (the "Securities Act"), other than securities offered
only in connection with dividend or interest reinvestment plans, please check
the following box. [x]
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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>
<CAPTION>
Title Of Each Class Of Amount Proposed Maximum Proposed Maximum Amount Of
Securities To Be To Be Registered Offering Price Per Aggregate Offering Registration Fee
Registered Share (1) Price (1)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per share 1,609,953
shares 7.875 12,678,379.88 4,371.86
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the
amount of the registration fee. The average of the high and low prices
reported on The Nasdaq Stock Market was $7.875 on August 21, 1996.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT 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.
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PROSPECTUS
1,609,953 SHARES
THE 3DO COMPANY
COMMON STOCK
This Prospectus relates to an aggregate of 1,609,953 shares (the
"Shares") of common stock, par value $.01 per share ("Common Stock"), of The 3DO
Company, a Delaware corporation (the "Company"), which may be offered (the
"Offering") for sale by persons (the "Selling Stockholders") who have acquired
such shares in certain acquisitions of businesses by the Company not involving a
public offering. The Shares are being registered under the Securities Act of
1933, as amended (the "Securities Act"), on behalf of the Selling Stockholders,
in order to permit the public sale or other distribution of the Shares.
The Shares may be sold or distributed from time to time by or for the
account of the Selling Stockholders through underwriters or dealers, through
brokers or other agents, or directly to one or more purchasers, at market prices
prevailing at the time of sale or at prices otherwise negotiated. The Company
has agreed to indemnify the Selling Stockholders against certain liabilities,
including liabilities under the Securities Act. The Company will receive no
portion of the proceeds from the sale of the Shares offered hereby and will bear
certain expenses incident to their registration. See "Selling Stockholders" and
"Plan of Distribution."
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The Common Stock is traded on The Nasdaq Stock Market -- National
Market ("Nasdaq") under the symbol "THDO." On August 28, 1996, the last reported
sales price for the Common Stock as reported by Nasdaq was $8.125 per share.
-----------------------------------------------------
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH
UNDER THE CAPTION "RISK FACTORS" LOCATED ON PAGE 4 OF THIS PROSPECTUS.
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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 August 29, 1996.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder, and, in accordance therewith, files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission"). These reports, proxy and
information statements and other information concerning the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; and at
the Commission's regional offices located at Suite 1400, 500 West Madison
Street, Chicago, Illinois 60661 and at Seven World Trade Center, New York, New
York 10048. Copies of such material can also be obtained from the Commission at
prescribed rates through its Public Reference Section at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The SEC also maintains a site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC.
The Common Stock is traded on Nasdaq. Information filed by the Company with
Nasdaq may be inspected at the offices of Nasdaq at 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act with respect to the Shares offered hereby
(including all amendments and supplements thereto, the "Registration
Statement"). This Prospectus, which forms a part of the Registration Statement,
does not contain all of the information set forth in the Registration Statement,
certain parts of which have been omitted in accordance with the rules and
regulations of the Commission. Statements contained herein concerning the
provisions of certain documents are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference. The Registration
Statement and the exhibits thereto can be inspected and copied at the public
reference facilities and regional offices of the Commission and at the offices
of Nasdaq referred to above.
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THE COMPANY
The 3DO Company ("3DO" or the "Company") designs, integrates, licenses
and sells interactive technologies and applications software products. The
Company is focused on creating technologies and entertainment products for the
advanced 64-bit market and is engaged in the development of software titles for
multiple hardware platforms including the IBM-compatible PC-CDROM platform (the
"PC"), the 64-bit M2 platform to be developed by Matsushita Electric Industrial
Co., Ltd. ("Matsushita"), and the Internet, and enhancing and leveraging the
Company's existing technologies beyond the video game console market to the
personal computer and digital video markets.
The Company's initial business model was as a licensor of technology to
hardware manufacturers and software developers to enable the establishment of a
new interactive video entertainment platform, the 3DO Interactive Multiplayer
system (the "3DO Multiplayer"). The 3DO Multiplayer was launched in October
1993, and was the first 32-bit, CDROM-based, video game console product to
market. During the last half of calendar 1995 and the first five months of
calendar 1996, consumer demand waned for the 3DO Multiplayer and third-party
developers and the Company have discontinued development of software titles for
this platform.
The Company developed a next generation 64-bit technology (the "M2
Technology") and licensed this technology to Matsushita, on an exclusive basis,
in December 1995, for an upfront license fee of $100 million plus certain
ongoing royalties. This license provides Matsushita with exclusive rights to use
and sublicense 3DO's M2 Technology. In the video game console market Matsushita
was granted and has retained the exclusive rights to develop and manufacture
video game console products using the M2 Technology, and Matsushita will control
the timing of any product launch, the pricing and marketing of any such
products, and any third-party licensing activities pertaining to such products.
The Company has undertaken a diversification plan to design, integrate,
license and sell products directed at the 64-bit interactive entertainment
market. The Company has been reorganized into two principal business units: a
technology development and licensing group called "3DO Systems" and an
entertainment software development and publishing group called "Studio 3DO."
The Company was incorporated as SMSG, Inc., under the laws of
California, in September 1991; commenced operations in October 1991; and changed
its name to The 3DO Company in September 1992. The Company is a successor to a
California general partnership named Medio, which was formed in October 1990 and
dissolved in September 1991. In April 1993, the Company reorganized as a
Delaware holding company. In April 1993, the Company acquired a California
partnership named NTG, L.P., and one of its partners, NTG, Inc., in exchange for
3DO common stock and cash. The Company's common stock became publicly traded on
the Nasdaq National Market in May 1993 under the symbol "THDO." The Company has
subsidiaries in Japan and the United Kingdom. The Company acquired the business
of Cyclone Studios in November 1995; Archetype Interactive Corporation in May
1996; and New World Computing, Inc. in June 1996. References to "3DO" or the
"Company" mean The 3DO Company, a Delaware corporation, and its subsidiaries and
predecessor entities. The Company's executive offices are located at 600
Galveston Drive, Redwood City, CA 94063, and its telephone number is (415)
261-3000.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
Certain statements and information under the captions "The Company,"
and "Risk Factors," and elsewhere in this Prospectus (including documents
incorporated herein by reference, see "Incorporation of Certain Documents by
Reference"), constitute "forward-looking statements" within the meaning of the
Federal Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance, or achievements of the Company
to be materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Such factors include
the extent to which the Company will receive and/or recognize revenue from the
M2 Technology Licensing Agreement with Matsushita; the extent to which the
Company will receive and/or recognize revenue from its Joint Development and
License Agreement with Cirrus Logic, Inc. ("Cirrus Logic"); the Company's
ability to successfully leverage its core technologies into other markets; the
Company's ability to develop software products for new platforms and the
timeliness and cost of, and market demand for, such products
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created as part of its software development activities; the effect of
competitive factors in the marketplace, including the market acceptance of
certain formats and the timing and release of competitors' products; competition
in the Company's existing and potential future lines of business; the ability to
integrate and successfully operate acquired businesses and the risks associated
with such businesses; and other factors referenced in this Prospectus.
Forward-looking statements which may be incorporated in this Prospectus by
reference shall be deemed to be identified hereat. See "Risk Factors."
RISK FACTORS
AN INVESTMENT IN THE SHARES BEING OFFERED HEREBY INVOLVES A SIGNIFICANT
DEGREE OF RISK. IN ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS
PROSPECTUS, PROSPECTIVE PURCHASERS OF THE SHARES SHOULD CONSIDER CAREFULLY THE
FOLLOWING FACTORS IN EVALUATING AN INVESTMENT IN THE COMPANY.
CHANGE IN STRATEGY
The Company is in the process of establishing operations as a
multi-platform entertainment software developer and publisher, and also intends
to leverage its 3-D graphics technologies into the PC market. The Company
expects that such change in strategy will result in a change in the composition
of the Company's revenues. Since commencement of operations, the Company has
been developing interactive multimedia technologies. Prior to December 1995, the
Company generated a majority of its revenue from software royalties and pressing
fees on titles published by its software licensees for the 3DO Multiplayer
platform. In the near term, the Company expects to derive the majority of its
revenue from technology licensing fees and the publication and distribution of
internally- and externally-developed software titles. For most of fiscal year
1995 and fiscal year 1996, the focus of the Company's business was on maximizing
royalty revenues from license and pressing fees from third-party software
products compatible with the 3DO Multiplayer format. However, the 3DO
Multiplayer format failed to achieve market acceptance. The Company expects that
its future revenues will mostly be in the form of technology license fees from
the Company's licenses pertaining to its M2 Technology and future technologies
developed by the Company, and publishing entertainment software titles for
multiple platforms, initially focusing on the PC, M2 and Internet platforms.
Revenues to the Company under the M2 Technology License Agreement and the Cirrus
Agreement are dependent on the Company fulfilling certain commitments under such
agreements, and there can be no assurance that the Company will fulfill its
obligations under such agreements, and any such failure of the Company to
fulfill its obligations, or any failure of such licensees to pay the fees under
such agreements as they become due, would have a material adverse effect upon
the Company's business, operating results and financial condition. Although the
Company commenced operations in 1991, the Company has a very limited operating
history upon which an evaluation of the Company and its current strategy can be
based. The Company is at an early stage of development in its new business
strategy and is subject to all of the risks inherent in the establishment of a
new business enterprise. To address these risks, the Company must, among other
things, establish technical feasibility and complete development of its M2 and
other technology, respond to competitive developments, continue to attract,
retain and motivate qualified personnel, and support the development and
marketing of products based on the Company's technology. The Company's decision
to focus its efforts on software title publishing and distribution for the PC,
M2, and Internet platforms is predicated on the assumption that in the future
the installed hardware base of PC, M2, and Internet platforms will be large
enough to permit this portion of 3DO's business to operate profitably. There can
be no assurance that the Company's assumption will be correct. There can be no
assurance that the Company will be able to successfully compete as an
entertainment software developer and publisher, nor that the Company will be
able to successfully leverage its 3-D graphics technologies into the PC market.
Any failure to achieve these goals could have a material adverse effect upon the
Company's business, operating results and financial condition.
CHANGING PRODUCT PLATFORMS AND FORMATS
The Company is entering new markets with its software products,
specifically the PC and Internet markets. The markets for entertainment software
and entertainment software platforms are undergoing rapid technological change.
As a result, the Company must continually anticipate and adapt its products to
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emerging platforms and evolving consumer preferences. The introduction of new
platforms and technologies can render existing products obsolete and
unmarketable. Development of entertainment software products for new hardware
platforms requires substantial investments in research and development for
technologies such as motion capture, digitized speech and sound effects, music
and full motion video, and requires the Company to anticipate and develop
products for those platforms that will ultimately be successful. Generally,
software development efforts must occur well in advance of the release of new
platforms in order to introduce new products on a timely basis following the
release of such platforms. Although the Company intends to develop and market
entertainment software for certain advanced and emerging platforms, the
development and marketing efforts in connection therewith may require greater
financial and technical resources than currently possessed by the Company. In
addition, there can be no assurance that the platforms for which the Company
develops products will achieve market acceptance and, as a result, there can be
no assurance that the Company's development efforts with respect to such new
platforms will lead to marketable products or products that generate sufficient
revenues to offset research and development costs incurred in connection with
the creation of such products. There can be no assurance that the Company will
be successful in developing and marketing products for new platforms. Failure to
develop products for new platforms that achieve significant market acceptance
would have a material adverse effect on the Company's business, operating
results and financial condition. Furthermore, the Company does not have a
license to develop products for certain of the most popular platforms, including
the Sony, Sega and Nintendo proprietary platforms. Finally, the Company's
products must maintain compatibility with certain hardware, software and
hardware accessories. Any changes in any of such third-party product designs
that result in incompatibility of the Company's products could result in
significant product returns and obsolescence.
DEPENDENCE ON PC MARKET
The Company's future success is in part dependent on the PC market,
which is extremely dynamic and has historically been characterized by wide
fluctuations in product supply and demand. From time to time, the PC industry
has also experienced significant downturns, often in connection with, or in
anticipation of, declines in general economic conditions. Furthermore, rapid
technological change in PC hardware may render the currently installed base of
PCs and the Company's technology obsolete. There can be no assurance that unit
sales of PCs will continue at their present levels or increase in the future.
The Company's revenues from its entertainment software products will be
dependent on marketing and distribution of titles to an installed base of PC
users. Any decrease in demand for PCs would have a material adverse effect on
the Company's operating results.
DEPENDENCE ON INTERACTIVE MULTIPLE-PLAYER GAMES ON INTERNET PLATFORM
The Company's future success is in part dependent upon continued growth
in the use of the Internet. Rapid growth in the use of and interest in the
Internet is a recent phenomenon. The Internet may not prove to be a viable
commercial marketplace for a number of reasons, including potentially inadequate
development of the necessary infrastructure, such as a reliable network
infrastructure, or timely development of performance improvements including high
speed modems. In addition, to the extent that the Internet continues to
experience significant growth in the number of users and level of use, there can
be no assurance that the Internet infrastructure will continue to be able to
support the demands placed upon it by any such growth. In addition, the Internet
could lose its viability due to delays in the development or adoption of new
standards and protocols required to handle increased levels of Internet
activity, or due to increased government regulation. Changes in or insufficient
availability of telecommunications services to support the Internet also could
result in slower response times and adversely affect usage of entertainment
software developed for the Internet. If the use of the Internet does not grow,
or if the Internet infrastructure does not effectively support the growth that
may occur, the Company's business, results of operations and financial
conditions would be materially adversely affected.
There can be no assurance that multiple-player games over the Internet
will become popular or widespread. The Company has had limited experience in
this area and only recently acquired Archetype Interactive Corporation
("Archetype"), an Internet game company. Various technical issues relating to
multiple-player games over the Internet exist, such as system compatibility
problems and inadequate infrastructure. There has been little evidence of
success in this area and a profitable business model to capitalize on the
interactive entertainment and game market on the Internet has not yet been
established.
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DEPENDENCE ON THE M2 TECHNOLOGY
The Company has undertaken a diversification plan to design, integrate,
license and sell products directed at the 64-bit interactive entertainment
market. The Company's next generation 64-bit M2 Technology, which has been
licensed to Matsushita and Cirrus Logic, has not yet been fully developed. The
Company is dependent on Matsushita, as the exclusive licensee, to develop and
manufacture video game console products using the M2 Technology. Matsushita will
control the timing of any product launch, the pricing and marketing of any such
products, and any third-party licensing activities pertaining to such products.
Matsushita has not yet completed development of its production version of a
video game console based on the M2 Technology, and there can be no assurance
that Matsushita or any future hardware system licensee will be able to
manufacture such a video game console in large enough quantities or at low
enough costs to enable this product to be priced competitively. The video game
hardware platform market is extremely competitive and the Company's previous
experience with the 3DO Multiplayer platform, the first 32-bit, CDROM-based,
video game console in the market, demonstrates the perils involved with the
development of new video game hardware technology. An installed base of hardware
using the M2 Technology is necessary for the Company to successfully develop and
market entertainment software for such a hardware base. There can be no
assurance that the M2 Technology will offer advantages over alternative
technologies sufficient to generate market acceptance.
PRODUCT DEVELOPMENT
The Company's future success is based in substantial part upon its
ability to develop new technology for the 64-bit consumer entertainment product
market and the PC market, to create software titles for the 64-bit interactive
entertainment markets and design products for the PC, M2 and Internet platforms.
Software product development schedules, particularly for new hardware platforms
such as the M2 and Internet platforms, are difficult to predict because they
involve creative processes, use of new development tools for new platforms, and
the learning processes associated with development for new technologies, as well
as other factors. As a result of their complexity, software products frequently
contain undetected errors or failures, especially when first introduced or when
new versions or enhancements are released. Despite extensive product testing
prior to the release of new products, the Company may discover errors in its
products after their initial release. There can be no assurance that, despite
testing by the Company, errors will not be found in new products and product
revisions released by the Company in the future. The occurrence of such errors
could result in significant losses to the Company. Any such occurrence also
could result in reduced market acceptance of the Company's products, which could
have a material adverse effect on the Company's business, operating results and
financial condition. In addition, CD-ROM and Internet multiple-player products
frequently include more content and are more complex, time-consuming and costly
to develop than simpler PC or video game console products and accordingly, cause
additional development and scheduling risk. As a result, there can be no
assurance that the Company will achieve its goal of releasing up to ten Studio
3DO titles during fiscal year 1997 or of releasing a production version of
Meridian 59, a multi-user role playing game to be played over the Internet, in
calendar year 1996. These development risks can cause particular difficulties in
predicting quarterly results. Failure to meet product development schedules may
cause a shortfall in shipments in any quarter and may cause the operating
results for such quarter to fall significantly below anticipated levels.
SHORT PRODUCT LIFESPANS
Interactive entertainment software products typically have life spans
of only 3 to 12 months. Accordingly, the Company will need to constantly develop
and bring to market new products that achieve market acceptance quickly. The
Company's future success will depend in large part on its ability to develop and
introduce new products on a timely basis. New products must keep pace with
competitive offerings, adapt to new hardware platforms and emerging industry
standards, and provide additional functionality. If the Company is unable, due
to resource constraints or technological or other reasons, to develop and
introduce such products in a timely manner, this inability would have a material
adverse effect on its operating results and financial condition. There can be no
assurance that the Company will be able to complete the timely development of,
and commercially release, new software products that achieve market acceptance.
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TECHNOLOGICAL CHANGE
The market for interactive multimedia products is characterized by
rapidly changing technology and user preferences, evolving formats for
compression of audio and video data and frequent new product introductions. Even
if the Company's technology and related software titles gain broad market
acceptance, the Company's success will depend, among other things, upon the
ability of the Company and its licensees to achieve and maintain technological
leadership and to remain competitive in terms of price and product performance.
The Company's pursuit of these technical improvements and other technological
goals will require substantial expenditures, and there can be no assurance that
any of these technical improvements will be developed or that the Company or its
licensees will achieve or maintain technological leadership. Any material
failure of the Company or its licensees to develop or incorporate any planned
improvement would adversely affect the widespread adoption of the Company's
technology and the introduction and sale of future products based on the
Company's technology, and would increase the likelihood that competitive
technologies will become broadly accepted. There can be no assurance that
products or technologies developed by others will not render obsolete the
Company's technology and the products based on the Company's technology.
COMPETITION
The Company is entering new markets with its software products,
specifically the PC and Internet markets. This will, to some degree, require
distribution through distributors and retailers who have not, in the past,
carried the Company's products. There will be intense competition in procuring
adequate distribution of the Company's software products. There can be no
assurance that the Company will succeed in obtaining sufficient distribution to
enable its products to achieve market success.
The markets in which 3DO's software products compete are expected to
undergo significant changes, due in part to the introduction, or planned
introduction, of new hardware platforms and electronic delivery systems, and the
entry and participation of new industries and companies. Severe competition
exists for retail shelf space in the consumer software industry. A number of
factors, including the Company's historic performance, discounts to retailers,
inventory and return policies, customer service, product support, brand
recognition, perceived quality and entertainment value of specific titles, and
marketing activities all affect access to distributors and retailers. In
addition, sales of interactive entertainment products are becoming increasingly
"hits" driven. Fewer products in that market are successful and publishers of
these games, including the Company, must incur substantial marketing and sales
expenses to promote retailers' sales of such products.
A variety of companies offer products that compete directly with one or
more of the Company's products. These direct competitors vary in size from very
small companies with limited resources to companies with financial, managerial
and technical resources substantially greater than those of the Company. The
Company's competitors include manufacturers of hardware platform systems such as
Nintendo, Sega and Sony (together with third-party licensees); diversified media
and entertainment companies such as Walt Disney Company, Viacom International,
Inc. and Time Warner Enterprises, Inc.; large independent multi-platform
software developers such as Electronic Arts Inc., Acclaim Entertainment, Inc.,
Lucas Arts Entertainment Co., and Spectrum HoloByte, Inc.; and publishers of
personal computer software such as Microsoft Corporation, Maxis, Inc., and
Sierra On-line, Inc. In addition, companies in industries such as cable
television and telecommunications, many of which have significant financial
resources, have begun to diversify or have announced plans to enter the
interactive software market. These new entrants have the potential to become
significant competitors.
VARIABILITY OF OPERATING RESULTS
The Company expects that its operating results will experience
significant fluctuation as a result of changes in the composition of the
Company's revenues, the timing of new video game hardware and software product
introductions by the Company's competitors, the timeliness with which the
Company releases its products to the market, fluctuations in the PC market, the
financial impact of acquisitions of other companies by the Company, and the
Company's investments in research and development, and expenditures on marketing
and promotional programs.
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The market for entertainment software is highly seasonal. The Company's
revenues are expected to be affected by the seasonal nature of the market, which
is characterized by increased sales in the fourth calendar quarter coinciding
with the holiday selling season and typically a seasonal low in revenues in the
quarter ending in June. Seasonal trends may also be affected by general economic
or industry factors. The Company's revenues may also reflect substantial
variations as a result of the timing of the introduction of and demand for a
particular software title it has published and/or distributed. Such demand may
increase or decrease as a result of a number of factors, such as consumer
preferences, product announcement by competitors and the popularity of
particular hardware platforms, that cannot be predicted. The software industry
is characterized by frequent product delays which can materially adversely
affect the sales of a product if the product is not released in time for the
holiday season.
The Company's revenues are also affected by the timing of payments
under agreements with companies that license the Company's technologies. These
licenses can represent significant revenues to the Company which can cause
fluctuation in quarterly results. Also, where there are contractual obligations
of the Company to complete certain technology, the Company will recognize
revenues on the "percentage of completion" method based upon the costs incurred
by the Company to fulfill its contractual obligation to deliver technology as
specified in the agreement. The progress made in completing the engineering of
such technology will affect the revenue recognized in any particular quarter.
The Company estimates that it will recognize revenue in connection with the M2
Technology License Agreement with Matsushita through the fourth quarter of the
fiscal year ending March 31, 1998.
The Company has stock-balancing programs for its software products
that, under certain circumstances and up to a specified amount, allow for the
exchange of software products by resellers. The Company also typically provides
for price protection for its software products that, under certain conditions,
allows the reseller a price reduction from the Company for unsold products. The
Company maintains a policy of exchanging products or giving credits, but does
not typically give cash refunds. The risk of price protection requirements is
increasing as a result of the maturing and the increasingly hit-based nature of
the video game market. Moreover, the risk of product returns may increase as new
hardware platforms become more popular or market factors force the Company to
make changes in its distribution system. Overstocking in the distribution
channel can result in high returns or the requirement for substantial price
protection in subsequent periods. The Company provides for reserves for returns
and price protection based on estimated future returns of products, taking into
account promotional activities, the timing of new product introductions,
distributor and retailer inventories of the Company's products and other
factors. There can be no assurance that actual returns or price protection will
not exceed the Company's reserves.
DEPENDENCE ON DISTRIBUTORS
The distribution channels through which consumer software products are
sold have been characterized by change, including consolidations and financial
difficulties of certain distributors and retailers and the emergence of new
retailers such as general mass merchandisers. The bankruptcy or other business
difficulties of a distributor or retailer could render the Company's accounts
receivable from such entity uncollectible, which could have an adverse effect on
the operating results and financial condition of the Company. In addition, an
increasing number of companies are competing for access to these channels. The
Company's arrangements with its distributors and retailers may be terminated by
either party at any time without cause. Distributors and retailers often carry
products that compete with those of the Company. Retailers of the Company's
products typically have a limited amount of shelf space and promotional
resources for which there is intense competition. There can be no assurance that
distributors and retailers will purchase the Company's products or provide the
Company's products with adequate levels of shelf space.
DEPENDENCE ON THIRD PARTIES
The Company continues to be dependent on the technological,
manufacturing, marketing, financial and other resources of third parties with
which it has established or is attempting to establish commercial relationships.
The Company relies on third parties to develop, manufacture, market and
distribute products that incorporate technology licensed from 3DO, such as
Matsushita and Cirrus Logic with respect to the M2 technology. The Company's
licensees may choose not to utilize the Company's technology and could develop
products or technologies that compete directly with products based upon the
Company's technology. In addition, there can be no assurance that these third
parties will commit any
10
<PAGE> 11
resources to the commercialization of the Company's technology. Further, a
licensee's financial or other resource limitations may prevent such licensee
from commercializing products based on the Company's technology. The Company's
Studio 3DO unit also depends upon third-party developers. Any failure of a
third-party developer to complete its contractual obligations to the Company
would adversely affect Studio 3DO's ability to complete and release titles,
which in turn would adversely affect the Company's operating results.
DEPENDENCE ON KEY PERSONNEL
The Company's future success depends in large part on the continued
service of its key technical, marketing, sales and management personnel. Given
the Company's early stage of development, the Company is dependent on its
ability to recruit, retain and motivate high-quality personnel, especially
highly-skilled engineers, programmers and artists involved in the ongoing
hardware and software development required to define future interactive hardware
systems, refine existing interactive technologies, introduce enhancements for
future applications, and develop novel software titles. The Company is
particularly dependent on the skills and contributions of several key
individuals, any one of whom may voluntarily terminate employment with the
Company at any time and whose departure would have a material adverse effect on
the Company's business. The Company is particularly dependent upon its Chief
Executive Officer, Trip Hawkins, who is also acting as the head of Studio 3DO.
The Company does not have "key person" life insurance policies on any of its
employees. The interactive multimedia industry is characterized by a high level
of employee mobility and aggressive recruiting of skilled personnel. The Company
competes with computer hardware, software and entertainment companies for the
recruitment of skilled personnel. There can be no assurance that the Company's
current employees will continue to work for the Company or that the Company will
be able to obtain the services of additional personnel necessary for the
Company's growth.
RECENT ACQUISITIONS
The Company acquired the business of Cyclone Studios ("Cyclone"), a
software developer, during November of 1995. In May of 1996, the Company
acquired all the outstanding capital stock of Archetype Interactive Corporation
("Archetype"), a developer of a multi-user role playing game to be played over
the Internet, and in June of 1996, the Company acquired the assets and assumed
certain liabilities of New World Computing, Inc. ("NWC"), an entertainment
software company. Each of these acquisitions represented the addition of new
products and personnel to the Company, which has caused changes in the
allocation of management and other resources, marketing strategies and
production systems. The Company's ability to manage its acquired businesses
effectively will depend on its ability to hire additional management and
technical personnel and to continue to improve the operating, financial and
management systems and controls in each of its operating units. There can be no
assurance that the Company will be able to successfully integrate these acquired
businesses or other companies which the Company may acquire in the future with
the current operations of the Company.
FUTURE ACQUISITIONS
The Company is in the process of establishing operations as a
multi-platform entertainment software developer and its strategy may involve, in
part, acquisitions of products, technologies or businesses from third parties.
Identifying and negotiating these acquisitions may divert substantial management
time away from the Company's operations. An acquisition could absorb substantial
cash resources, could require the Company to incur or assume debt obligations,
or could involve the issuance of additional equity securities of the Company.
The issuance of additional equity securities could dilute and could represent an
interest senior to the rights of then-outstanding common stock. An acquisition
which is accounted for as a purchase, like the acquisitions of Cyclone and NWC,
could involve significant one-time non-cash write-offs, and could involve the
amortization of goodwill over a number of years, which would adversely affect
earnings in those years. Acquisitions outside the entertainment software area
may be viewed by outside market analysts as a diversion of the Company's focus
on entertainment software. For these reasons, the market for the Company's stock
may react positively or negatively to the announcement of any acquisition. Any
acquisition will require attention from the Company's management to integrate
the acquired entity into the Company's operations, may require the Company to
develop expertise outside its existing businesses, and may result in departures
of management of the acquired
11
<PAGE> 12
entity. An acquired entity may have unknown liabilities, and its business may
not achieve the results anticipated at the time of the acquisition. Any
acquisitions that adversely affect the operations of the Company may have an
adverse impact on the Company's stock price.
PROPRIETARY RIGHTS AND LICENSES
The Company's success will depend in part on its ability to obtain and
enforce intellectual property protection for its technology in both the United
States and other countries. The Company has filed a number of patent
applications with the United States Patent and Trademark Office ("U.S. Patent
Office") and international counterparts of certain of these applications with
the United States Receiving Office pursuant to the Patent Cooperation Treaty.
The Company intends to file additional applications as it deems appropriate for
patents covering its technology. The process of obtaining patent protection is
expensive and absorbs substantial management and engineering time. No assurance
can be given that any patents will issue from these applications or that, if any
patent does issue, the claims allowed will be sufficiently broad to protect the
key aspects of the Company's technology or that the patent laws will provide
effective legal or injunctive remedies to stop any infringement of the Company's
patents. In addition, no assurance can be given that any patent issued to the
Company will not be challenged, invalidated or circumvented, that the rights
granted under patents will provide competitive advantages to the Company, or
that the Company's competitors will not independently develop or patent
technologies that are substantially equivalent or superior to the Company's
technology.
The Company also relies on trade secrets and proprietary know-how which
it seeks to protect, in part, by confidentiality agreements with its employees,
consultants, developers, vendors, and current and prospective licensees. The
Company's license agreements prohibit unauthorized disclosure or unauthorized
reverse-engineering of the Company's licensed technology. However, the Company
expects that third parties may attempt to reverse-engineer its technology
without authorization and there can be no assurance that the Company's
confidentiality and license agreements will not be breached or that the Company
would have adequate remedies for any breach. As a result, the Company may not
have an adequate remedy if a competitor disassembles or reverse-engineers
products based on the Company's proprietary technology, even if the technology
is protected by trade secret or copyright law. There can be no assurance that
the Company's trade secrets will not otherwise become known or be independently
discovered by competitors.
The Company relies in part on copyright laws to prevent unauthorized
duplication or distribution of its software, written materials and audiovisual
works. The Company is also considering seeking protection of its semiconductor
circuit designs under applicable mask work right laws. Existing copyright and
mask work right laws afford only limited protection, particularly in certain
jurisdictions outside the United States where the Company may seek to license
its technology. There can be no assurance that the copyright laws or mask work
right laws will adequately protect the Company's technology.
The Company licenses its name and logo for use in connection with
authorized products. The Company has experienced difficulty in registering some
of its marks in various jurisdictions, including Japan. There can be no
assurance that the Company will obtain sufficient trademark protection for these
marks, that these marks will not be duplicated without authorization, or that
the Company will have adequate remedies for trademark infringement in any
country.
From time to time, the Company receives communications from third
parties asserting that features or content of certain of the Company's or its
licensees' products infringe upon intellectual property rights held by such
third parties. The Company has been notified by a third party that such third
party believes that the Company's initial hardware design, the 3DO Multiplayer
system, infringes upon one or more of such third party's patents. The Company is
evaluating this claim in the event litigation is instigated. As the number of
patents and products in the Company's industry increases and as the
functionality of these products further overlaps, the Company believes that
products based on its technology will increasingly become the subject of
infringement claims. The Company could incur substantial costs in defending
itself or its licensees in litigation brought by others, or in prosecuting
infringement claims against third parties. The Company could also incur
substantial costs in interference proceedings declared by the U.S. Patent Office
in connection with one or more of the Company's or a third party's patents or
patent applications. Those proceedings could result in an adverse decision as to
12
<PAGE> 13
the priority of the Company's inventions. A third party claiming infringement
may be able to obtain an injunction or other equitable relief, which could
effectively block the ability of the Company's licensees to import into the
United States or to distribute and sell hardware or software products licensed
by the Company. This would materially adversely affect the Company. Such a third
party could also assert claims for substantial damages against the Company, its
licensees or distributors of such licensees' products, which could inhibit the
manufacture or sale of licensed products. In the event of a claim of
infringement, the Company or its licensees may be required to obtain one or more
licenses from third parties. There can be no assurance that the Company or its
hardware and software licensees will be able to obtain from third parties any
required license to technology at a reasonable cost or at all. Failure by the
Company or its hardware and software licensees to obtain any such license would
have a material adverse impact on the Company.
VOLATILITY OF STOCK PRICE
Market prices of securities of companies engaged in the entertainment
software industry have been highly volatile. Factors such as announcements of
the introduction of new products by the Company or its competitors,
announcements of joint development efforts or corporate partnerships in the
entertainment software field, market conditions in the technology,
entertainment, cable, telecommunications and other emerging growth company
sectors, and rumors relating to the Company or its competitors, have had and may
in the future have a significant impact on the market price of the Company's
common stock. Further, the stock market has experienced volatility that has
particularly affected the market prices of equity securities of many high
technology and development-stage companies, such as those in the entertainment
software and semiconductor industries that has often been unrelated to the
operating performance of such companies. These market fluctuations may adversely
affect the price of the Company's common stock.
POSSIBLE DEPRESSING EFFECT OF FUTURE SALES OF COMMON STOCK
Future sales of the Shares or the perception that such sales could
occur could adversely affect the market price of the Common Stock. There can be
no assurance as to when, and how many of, the Shares will be sold and the effect
such sales may have on the market price of the Common Stock. In addition, the
Company may issue Common Stock pursuant to exemptions from registration
available under the Securities Act in connection with future acquisitions. Such
securities are subject to resale in accordance with the Securities Act and the
regulations promulgated thereunder. As such restrictions lapse or if such shares
are registered for sale to the public, such securities may be sold into the
public market. In the event of the issuance and subsequent resale of a
substantial number of shares of Common Stock, or a perception that such sales
could occur, there could be a material adverse effect on the prevailing market
price of the Common Stock.
DILUTION
The issuance of additional shares of Common Stock, upon completion of
acquisitions or other business combinations, may have a dilutive effect on
earnings per share and will have a dilutive effect on the voting rights of the
holders of Common Stock.
USE OF PROCEEDS
This Prospectus relates to Shares being offered and sold for the
accounts of the Selling Stockholders. The Company will not receive any proceeds
from the sale of the Shares but will pay all expenses related to the
registration of the Shares. See "Plan of Distribution."
SELLING STOCKHOLDERS
The following table sets forth the name of each Selling Stockholder,
the aggregate number of shares of Common Stock beneficially owned by each
Selling Stockholder as of August 27, 1996 and the aggregate number of shares of
Common Stock registered hereby that each Selling Stockholder may offer
13
<PAGE> 14
and sell pursuant to this Prospectus. All of the 1,609,953 Shares offered are
issued and outstanding as of the date of this Prospectus. Because the Selling
Stockholders may sell all or a portion of the Shares at any time and from time
to time after the date hereof, no estimate can be made of the number of shares
of Common Stock that each Selling Stockholder may retain upon completion of the
Offering. To the knowledge of the Company, none of the Selling Stockholders has
any material relationship with the Company except as set forth in the footnotes
to the following table.
<TABLE>
<CAPTION>
Shares Beneficially Owned Shares To Be Offered
------------------------- --------------------
Selling Stockholder Prior To The Offering For The Selling Stockholder
------------------- --------------------- ---------------------------
<S> <C> <C>
Mark Barnard 4,915 4,915
Philip Bronson 7,373 7,373
Ethan Canin 3,730 3,730
David Dove 11,059 11,059
Mary Constance Gelb 14,746 14,746
John Hanke (1) 28,278 28,278
George Harris 1,865 1,865
Andrew Kirmse (1) 55,297 55,297
Christopher Kirmse (1) 55,297 55,297
Gordon Kruberg 1,843 1,843
Rainer Munz 11,059 11,059
New World Computing, Inc. 882,953 882,953
PacRim Access Group, Inc. 61,441 61,441
PacRim Access Group, Inc. 18,432 18,432
Mario M. Rosati 1,475 1,475
David J. Sellers 3,686 3,686
Michael J. Sellers (1) 147,458 147,458
Stephen D. Sellers (1) 147,457 147,457
David Smiley 1,475 1,475
Paul Spradlin 1,843 1,843
Jon Van Caneghem (2) 135,000 135,000
W. S. Investment Co. 95B (3) 13,271 13,271
--------- ---------
TOTAL 1,609,953 1,609,953
========= =========
</TABLE>
(1) This Selling Stockholder served as an officer of Archetype Interactive prior
to the Company's acquisition of Archetype on May 31, 1996 and currently serves
as an employee of the Company.
(2) Mr. Van Caneghem served as an officer of New World Computing, Inc., prior to
the Company's acquisition of the assets of New World Computing, Inc., and
currently serves as an officer of the Company.
(3) W. S. Investment Co. 95B may distribute these shares to the following
limited partners and in the following amounts for resale by such entities as
Selling Stockholders:
<TABLE>
<CAPTION>
NAME NO. OF SHARES
=============================================================
<S> <C>
Sonsini, Larry W. 714
Bremond, Harry B. 107
Goodrich, John B. 258
Rosati, Mario M. 342
Bertelsen, Mark A. 262
Schneiderman, Arthur F. 192
Saper, Jeffrey D. 289
Laurice, Douglas M. 70
Compton, Charles T.C. 134
Jack, Robert B. 134
Massey, Henry 266
O'Brien, Bradford C. 143
Stewart, Blair W. 79
Ladra, Michael A. 164
O'Brien, Judith M. 149
Vanyo, Bruce G. 342
Currie, Francis S. 245
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
NAME NO. OF SHARES
=============================================================
<S> <C>
Taylor, Barry E. 280
Schatz, Steven M. 280
Bradley, Donald E. 181
Collom, Douglas H. 143
DiBoise, James A. 224
Latta, Robert P. 224
McGlynn, J. Casey 262
Kurpius, James A. 62
Laboskey, Peter 102
Walker, Ann Yvonne 111
Feldman, Robert P. 196
Summers, Debra S. 139
Austin, Alan K. 280
Amantea, Denise M. 104
Bochner, Steven E. 205
Johnson, Terry T. 181
Morgan, Allen L. 160
Roth, Ronald M. 117
Braham, Tor R. 196
Clarkson, Robert T. 166
DeFilipps, Thomas C. 119
Feldman, Boris 209
Haviland, Dana D. 111
Parnes, Mark G. 111
Plant, Harry K. 134
Roos, John V. 168
Humphreys, Ivan H. 134
Sterling, Marcia Kemp (T) 119
Steuer, David 164
Char, Richard J. 134
Chen, Peter P. 107
Creighton, Susan Abouchar 134
Danaher, Michael J. 89
Fore, John A. 130
Kopel, Jared L. 107
Sparks, Timothy J. 134
Reback, Gary L. 268
Fockler, Herbert P. 100
Locker, Nina F. 107
Scott, Timothy T. 111
Durant, Steve C. 98
Petkanics, Donna M. 89
Segre, David J. 89
Siegel, Kenneth M. 89
Wolff, Neil J. 89
Zeprun, Howard S. 89
Barclay, Michael 117
O'Donnell, Michael J. 134
Schloss, Harvey 62
Clark, Kenneth 94
Alter, Aaron J. 79
Birn, Jerome F. Jr. 79
Degolia, Richard C. 81
Flint, Elizabeth R. 79
Mailliard, Page 79
Smilan, Laurie B. 79
Barry, Henry V. 139
Arrieta, Aileen 70
Axelrad, Jonathan 70
Berger, David 70
Berson, Steven 70
Bonham, Mark 70
Bridges, Andrew 70
Mitchell, Christopher 70
</TABLE>
15
<PAGE> 16
<TABLE>
<CAPTION>
NAME NO. OF SHARES
=============================================================
<S> <C>
Sheridan, Jack 70
Shulman, Ron 149
Strawbridge, James 70
Wilson, Kenneth 70
Associate Trust (a) 664
------
TOTAL 13,271
======
</TABLE>
(a) Associate Trust of W. S. Investment Co 95B may distribute these shares to
the following limited partners and in the following amounts for resale by such
entities as Selling Stockholders:
<TABLE>
<CAPTION>
NAME NO. OF SHARES
=========================================================================
<S> <C>
Bell, Suzanne 21
Brownell, Robert 21
Cervantes, Marta 21
Priest, Gregory 21
Caroll, Megan J. 20
Fennell, Chris F. 20
Husick, Gail Clayton 20
Jacobs, James L. 20
Klein, Thomas C. 20
Mesel, Noah D. 20
Rabson, Michael 20
Saunders, Elizabeth M. 20
Schultheis, Patrick J. 20
Stern, Roger 20
Winawer, Lloyd 20
Cassidy, Bernard J. 20
Eggleton, Keith E. 20
Fabela, Robert R. 20
Good, Sarah A. 20
Harrington, Sara 20
Hetherington, Michael 20
Herbst, Jeffrey A. 20
Horii, Dwayne M. 20
Jackson, Meredith S. 20
Kirkman, Catherine S. 20
Krohn, Douglas K. 20
Lambert, Joan E. 20
Larson, David L. 20
Priebe, David 20
Skaer, Susan J. 20
Suffoletta, J. Robert 20
Theodorakis, D. John 20
Wadsworth, Clyde J. 20
---
TOTAL 664
===
</TABLE>
PLAN OF DISTRIBUTION
The shares of Common Stock covered hereby may be offered and sold from
time to time by the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to their
respective sales of the shares.
The Selling Stockholders may sell or distribute some or all of the
Shares from time to time through underwriters or dealers or brokers or other
agents or directly to one or more purchasers, in transactions (which may involve
block transactions) on Nasdaq, privately negotiated transactions or in the
over-the-counter market, or in a combination of such transactions. Such
transactions may be effected by the Selling Stockholders at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be changed. Brokers,
dealers, agents or underwriters participating in such transactions as agent may
receive compensation in the form of
16
<PAGE> 17
discounts, concessions or commissions from the Selling Stockholders (and, if
they act as agent for the purchaser of such shares, from such purchaser). Usual
and customary or specifically negotiated brokerage fees or commissions may be
paid by the Selling Stockholders in connection with such sales.
The Selling Stockholders and any such underwriters, brokers, dealers or
agents that participate in such distribution may be deemed to be "underwriters"
within the meaning of the Securities Act, and any discounts, commissions or
concessions received by any such underwriters, brokers, dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities Act.
Neither the Company nor the Selling Stockholders can presently estimate the
amount of such compensation. The Company knows of no existing arrangements
between any Selling Stockholder and any other Selling Stockholder, underwriter,
broker, dealer or other agent relating to the sale or distribution of the
Shares.
The Company has filed a Registration Statement in which this Prospectus
is included for the purposes of permitting the Selling Shareholders to make
resales of the Shares. Such resales may commence at the time such Registration
Statement is declared effective by the Commission and continue for as long as
such Registration Statement remains in effect. However, the Selling Shareholders
must notify the Company in writing of its intent to sell any Shares at least 3
full business days prior to such sale. At any time within such 3 business day
period, the Company may refuse to permit a Selling Shareholder to resell any
Shares pursuant to the Registration Statement; provided that the Company
delivers a certificate in writing to the Selling Shareholder that a delay in
such sale is necessary. In no event shall such delay exceed 20 trading days;
provided, however, that prior to the expiration of the 20 day trading period,
the Company may refuse to permit the Selling Shareholders to resell the Shares
pursuant to the Registration Statement for any additional period not to exceed
20 trading days if the Company delivers a certificate in writing to the Selling
Shareholder that further delay in such sale is necessary. New World Computing,
Inc. and Jon Van Caneghem may not, without the prior written consent of the
Company, sell more than an aggregate of 50,000 shares during any single trading
day during the first 90 days following the effective date of the registration
statement.
The Company will pay substantially all of the expenses incident to this
Offering of the Shares by the Selling Stockholders to the public other than
commissions and discounts of underwriters, brokers, dealers or agents.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon by James
Alan Cook, Executive Vice President and General Counsel for the Company. Mr.
Cook beneficially owned 92,898 shares of Common Stock as of August 27, 1996.
Certain partners of Wilson Sonsini Goodrich & Rosati, a Professional
Corporation, the Company's outside counsel, beneficially own 14,746 shares of
Common Stock as of the date of this Prospectus.
EXPERTS
The consolidated financial statements of the Company as of March 31,
1996 and 1995, and for each of the years in the three year period ended March
31, 1996, have been incorporated by reference in this Prospectus and elsewhere
in the Registration Statement, in reliance upon the report of KPMG Peat Marwick
LLP, independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The financial statements of New World Computing, Inc. as of December
31, 1995, and for the year then ended, have been incorporated by reference in
this Prospectus and elsewhere in the Registration Statement, in reliance upon
the report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act, are incorporated by reference and made
a part of this Prospectus: (i) the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1996; (ii) all other reports filed pursuant to
Section 13(a) or 15(d) of the Exchange Act since March 31, 1996, specifically
including the
17
<PAGE> 18
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996, the
Company's Current Report on Form 8-K dated July 12, 1996 (as amended by the
Company's Current Report on Form 8-K/A as filed with the Commission on August
22, 1996); and (iii) the Company's Proxy Statement filed July 29, 1996 relating
to the 1996 Annual Meeting of Stockholders to be held on September 20, 1996.
All documents 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 shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in a document or information
incorporated or deemed to be incorporated herein by reference shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document that also is,
or is deemed to be, incorporated herein by reference, modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
THE COMPANY UNDERTAKES TO PROVIDE, WITHOUT CHARGE, TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS IS DELIVERED,
UPON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY AND ALL OF THE
DOCUMENTS OR INFORMATION REFERRED TO ABOVE THAT HAS BEEN OR MAY BE INCORPORATED
BY REFERENCE IN THIS PROSPECTUS (EXCLUDING EXHIBITS TO SUCH DOCUMENTS UNLESS
SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE). REQUESTS SHOULD BE
DIRECTED TO JAMES ALAN COOK, EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL, THE
3DO COMPANY, 600 GALVESTON DRIVE, REDWOOD CITY, CALIFORNIA 94063, TELEPHONE:
(415) 261-3000, FAX: (415) 261-3151.
18
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. (1)
The following table sets forth the estimated expenses payable by the
Registrant in connection with the filing of this Registration Statement. All of
such expenses, other than the filing fee for the Commission, are estimates.
Securities and Exchange Commission Filing Fee.................. $4,371.86
Legal Fees and Expenses........................................ $2,000.00
Accounting Fees and Expenses................................... $2,000.00
Miscellaneous.................................................. $1,000.00
---------
TOTAL................................................. $9,371.86
(1) All amounts, other than the registration fee, are estimated and are subject
to future contingencies.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court
to award, or a corporation's board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933. The Registrant's Restated
Certificate of Incorporation and Amended and Restated Bylaws provide for
indemnification of its directors, officers, employees and other agents to the
maximum extent permitted by the Delaware General Corporation Law. In addition,
the Registrant has entered into Indemnification Agreements with its executive
officers and directors. The Registrant has also purchased and maintains
insurance for its officers, directors, employees or agents against liabilities
which an officer, a director, an employee or an agent may incur in his capacity
as such.
ITEM 16. EXHIBITS.
The following exhibits are filed as part of this Registration
Statement:
NUMBER EXHIBIT DESCRIPTION
- ------ -------------------
5.1* Opinion of Counsel as to the validity of the Shares.
23.1* Consent of Counsel (included in Exhibit 5.1 above).
23.2* Consent of KPMG Peat Marwick LLP.
23.3* Consent of KPMG Peat Marwick LLP.
24.1* Power of Attorney (included under the heading "Signatures," above).
- -----------------
* FILED HEREWITH.
ITEM 17. UNDERTAKINGS.
19
<PAGE> 20
(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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii), above, do
not apply if the information required to be included in a post-effective
amendment by these paragraphs is contained in periodic reports filed with or
furnished by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act
that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement
relating to the securities offered herein, 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, each
filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act that is incorporated
by reference in this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act 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 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 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.
20
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Redwood City, State of
California, on August 27, 1996.
THE 3DO COMPANY
By: /S/ PAUL MILLEY
-----------------------------
Paul Milley
Chief Financial Officer
(Principal Financial Officer
and Principal Accounting Officer)
(Duly Authorized Officer)
Know All Men By These Presents, that each person whose signature
appears below constitutes and appoints William M. Hawkins, III, and James Alan
Cook, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and to file the same,
with all exhibits thereto and documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do so or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement or amendment thereto has been signed by the
following persons in the capacities indicated on August 27, 1996.
<TABLE>
<CAPTION>
Signature Title Date
- ---------------------------------------- ---------------------------------- ----------------
<S> <C> <C>
/S/ WILLIAM M. HAWKINS, III Chairman of the Board of Directors August 27, 1996
- ------------------------------------ and Chief Executive Officer
William M. Hawkins, III (Principal Executive Officer)
/S/ PAUL J. MILLEY Chief Financial Officer August 27, 1996
- ------------------------------------ (Principal Financial Officer and
Paul J. Milley Principal Accounting Officer)
/S/ DAVID H. HOROWITZ Director August 27, 1996
- ------------------------------------
David H. Horowitz
- ------------------------------------ Director
Vinod Khosla
/S/ HUGH C. MARTIN President and Director August 27, 1996
- ------------------------------------
Hugh C. Martin
/S/ CHARLES S. PAUL Director August 27, 1996
- ------------------------------------
Charles S. Paul
/S/ ROBERT W. PITTMAN Director August 27, 1996
- ------------------------------------
Robert W. Pittman
</TABLE>
21
<PAGE> 22
EXHIBIT INDEX
NUMBER EXHIBIT DESCRIPTION
5.1* Opinion of Counsel as to the validity of the Shares.
23.1* Consent of Counsel (included in Exhibit 5.1 above).
23.2* Consent of KPMG Peat Marwick LLP.
23.3* Consent of KPMG Peat Marwick LLP.
24.1* Power of Attorney (included under the heading "Signatures,"
above).
- ----------------
* FILED HEREWITH.
22
<PAGE> 1
Exhibit 5.1
August 27, 1996
The 3DO Company
600 Galveston Drive
Redwood City, CA 94063
Re: The 3DO Company Registration Statement on Form S-3
Gentlemen:
In connection with the preparation and filing of a Form S-3
Registration Statement under the Securities Act of 1933, as amended, relating to
the sale by certain selling stockholders of 1,609,953 shares of the Company's
common stock, par value $.01 per share ("Common Stock"), all of which are issued
and outstanding, I have examined originals or copies of corporate records,
certificates of public officials and officers of the Company and other
instruments relating to the authorization and issuance of such shares of Common
Stock as I have deemed relevant and necessary for the opinion hereinafter
expressed.
On the basis of the foregoing, I am of the opinion that the issuance of
the 1,609,953 shares of Common Stock have been duly authorized by the Board of
Directors of the Company, and the shares are validly issued, fully paid and
nonassessable.
I hereby consent to the filing of the opinion as an exhibit to said
Registration Statement on Form S-3 and further consent to the use of my name
wherever appearing in the Form S-3.
Sincerely,
/S/ JAMES ALAN COOK
---------------------------
James Alan Cook
Executive Vice President
and General Counsel
23
<PAGE> 1
EXHIBIT INDEX
NUMBER EXHIBIT DESCRIPTION
5.1* Opinion of Counsel as to the validity of the Shares.
23.1* Consent of Counsel (included in Exhibit 5.1 above).
23.2* Consent of KPMG Peat Marwick LLP.
23.3* Consent of KPMG Peat Marwick LLP.
24.1* Power of Attorney (included under the heading "Signatures,"
above).
- ----------------
* FILED HEREWITH.
22
<PAGE> 1
EXHIBIT 23.3
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
The 3DO Company:
We consent to the incorporation by reference in the registration statement on
Form S-3 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 the
related statements of operations and retained earnings, and cash flows for the
year then ended, which report appears in the Form 8-K/A, Amendment No. 1, of
the 3DO Company dated August 22, 1996, and to the reference to our firm under
the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
San Diego, California
August 27, 1996
25
