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Filed Pursant to Rule 424 (b) (3)
Registration Statement No.333-19933
SANCTUARY WOODS MULTIMEDIA CORPORATION
SUPPLEMENT TO PROSPECTUS DATED MARCH 14, 1997
As described in the Prospectus dated March 14, 1997, the Company and
holders of the Company's 8% Convertible Debentures due July 31, 1999 (the
"Debentures") agreed to exchange the Debentures for approximately 100,000 shares
of Series A Preferred Stock and warrants to purchase an additional 9,499,416
shares of Common Stock at an exercise price of $0.15 per share. On March 31,
1997, the Company and holders of a majority of the Debentures amended the
agreement to increase the number of shares issuable on exercise of these
warrants. If the Company enters into similar agreements with all of the
Debenture holders, the number of shares issuable upon exercise of these warrants
will increase from 9,499,416 to 21,649,833 shares. The warrants must be
exercised if the Company's Common Stock trades at 300% of the warrant exercise
price or $0.45 per share for any 21 trading days in any consecutive 40 trading
day period. In addition, one-half of the warrants must be exercised if the
Company has combined net revenues of $10 million or more in any four consecutive
quarters. In consideration for the exchange, the Debenture holders are foregoing
all interest accrued and owing on the Debentures. Interest owing on the
Debentures at March 31, 1997 was approximately $225,445.
Pequot Partners Fund, L.P. and Pequot International Fund, Inc., that
together hold Debentures in the aggregate principal amount of $4,000,000, have
informed the Company that they intend to convert such Debentures into Series A
Preferred Stock and in connection with such conversion will receive warrants to
purchase an aggregate of 18,333,333, shares, and that they intend to purchase up
to 8,333,334 shares of Common Stock through the exercise of Rights distributed
to them in the Rights Offering.
