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As filed with the Securities and Exchange Commission on November 13, 1998
Registration No. 333-____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
METACREATIONS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-4102687
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6303 CARPINTERIA AVENUE
CARPINTERIA, CALIFORNIA 93013
(805) 566-6200
(Address, including zip code and telephone number, including area code, of
registrant's principal executive offices)
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TERANCE A. KINNINGER
SR. VICE PRESIDENT FINANCE AND OPERATIONS AND CHIEF FINANCIAL OFFICER
METACREATIONS CORPORATION
6303 CARPINTERIA AVENUE
CARPINTERIA, CA 93013
(805) 566-6200
FAX: (805) 566-6200
(Name, address, including zip code and telephone number,
including area code, of agent for service)
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Copies to:
JEFFREY D. SAPER, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300
FAX: (650) 493-6811
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Approximate date of commencement of proposed sale to the 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, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [X] ______
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. [ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value
$0.001 per share ................. 12,903 shares $3.5625 $45,967.00 $13.00
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(1) The Price of $3.5625 per share, which was the average of the high and low
prices of the Registrant's Common Stock on the Nasdaq National Market on
November 9, 1998, is set further solely for the purposes of calculating
the registration fee in accordance with Rule 457(c) of the Securities Act
of 1933, as amended.
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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 or until the Registration Statement shall become effective
on such date as the Securities and Exchange Commission, acting pursuant to
Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities Exchange Commission is effective. This prospectus is not any offer to
sell these securities and is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
PROSPECTUS
(Subject to completion, dated November ___, 1998)
12,903 SHARES
METACREATIONS CORPORATION
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COMMON STOCK
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This prospectus relates to the public offering, which is not being underwritten,
of up to 12,903 shares of Common Stock, par value $0.001 per share (the
"Shares"), of MetaCreations Corporation ("MetaCreations" or the "Company"),
which may be offered from time to time by certain stockholders of the Company or
by pledgees, donees, transferees or other successors in interest that receive
such shares as a gift, partnership distribution or other non-sale related
transfer (the "Selling Stockholders"). The Company will receive no part of the
proceeds of such sales. All of the Shares were originally issued by the Company
in connection with the Company's 1995 Employee Stock Purchase Plan pursuant to
an exemption from the registration requirements of the Securities Act of 1933,
as amended (the "Securities Act"), provided by Section 4(2) thereof. None of the
Shares offered pursuant to this prospectus have been registered prior to the
filing of the Registration Statement of which this prospectus is a part.
The Shares may be offered by the Selling Stockholders from time to time in one
or more transactions in the over-the-counter market, in negotiated transactions,
or otherwise. See "Plan of Distribution" beginning on page 13. The price at
which any of the Shares may be sold, and the commissions, if any, paid in
connection with any such sale, are unknown and may vary from transaction to
transaction. The Company will pay all expenses incident to the offering and sale
of the Shares to the public other than any commissions and discounts of
underwriters, dealers or agents and any transfer taxes. See "Selling
Stockholders" and "Plan of Distribution," both on page 13.
The Company's Common Stock is listed on the Nasdaq National Market under the
symbol "MCRE." On November 9, 1998, the last sale price of the Company's Common
Stock was $3.5625 per share.
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INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 7.
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The Securities and Exchange Commission (the "Commission") may take the view
that, under certain circumstances, the Selling Stockholders and any
broker-dealers or agents that participate with the Selling Stockholders in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of the Securities Act. Commissions, discounts or concessions received by any
such broker-dealer or agent may be deemed to be underwriting commissions under
the Securities Act. See "Plan of Distribution."
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THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this prospectus is _______ , 1998.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Additional Information.....................................................3
Incorporation of Certain Documents by Reference............................4
Available Information......................................................4
The Company................................................................5
Forward-Looking Statements.................................................6
Risk Factors...............................................................7
Use of Proceeds...........................................................13
Selling Stockholders......................................................13
Plan of Distribution......................................................13
Indemnification of Directors and Officers.................................14
Legal Matters.............................................................15
Experts...................................................................15
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ADDITIONAL INFORMATION
This prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the shares of Common Stock offered
hereby, reference is made to the Registration Statement. The Registration
Statement may be inspected at the public reference facilities maintained by the
Commission at the addresses set forth in the preceding paragraph. Statements
contained herein concerning the provisions of any document are not necessarily
complete, and each such statement is qualified in its entirety by reference to
the copy of such document filed with the Commission.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company (File No.
0-27168) pursuant to the Exchange Act are hereby incorporated by reference in
this prospectus:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997, as amended;
(2) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998;
(3) The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998;
(4) The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998; and
(5) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A, filed with the Commission on
October 25, 1995.
All reports and other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and
prior to the termination of this offering shall be deemed to be incorporated by
reference into this prospectus to the extent required and to be a part of this
prospectus from the date of filing of such reports and documents.
Any statement contained in a document incorporated by reference into this
prospectus shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Registration Statement or this prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this prospectus is delivered,
upon written or oral request of such person, a copy of any and all of the
information that has been or may be incorporated by reference into this
prospectus, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests for such
copies should be directed to MetaCreations Corporation, 6303 Carpinteria Avenue,
Carpinteria, California 93013, Attn: Investor Relations (telephone (805)
566-2600).
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy and information statements and other
information with the Commission. Such reports, proxy and information statements
and other information may be inspected and copied at the public reference
facilities maintained by the Commission at the Public Reference Room, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following
Regional Offices of the Commission: New York Regional Office, Seven World Trade
Center, Suite 1300, New York, New York 10048, and Chicago Regional Office,
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-800-SEC-0330. Copies of such material may be
obtained by mail at prescribed rates from the Public Reference Section of the
Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission at the address http://www.sec.gov. The Common
Stock of the Company is listed on the Nasdaq National Market, and such reports,
proxy and information statements and other information concerning the Company
may be inspected at the offices of Nasdaq Operations, 1735 K Street, N.W.,
Washington, D.C. 20006.
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THE COMPANY
MetaCreations Corporation ("MetaCreations" or the "Company") designs and
develops award-winning desktop software tools and enabling technologies for
creating and manipulating 2-D and 3-D digital images and Web content.
MetaCreations offers a complete product line of graphics software for both
professional users and consumers, and its products are available in more than 70
countries.
The Company was founded in March 1987 as Harvard Systems Corp., a California
corporation, and shortened its name to HSC Software Corp. in August 1993. The
Company changed its name to MetaTools, Inc. in September 1995 and reincorporated
into Delaware in December 1995. The Company changed its name to MetaCreations
Corporation in May 1997 following its merger with Fractal Design Corporation.
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FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated herein by reference contain
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates," variations of such words
and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict. Therefore, actual results could differ materially from those expressed
or forecasted in any such forward-looking statements as a result of certain
factors, including those set forth in "Risk Factors," as well as those noted in
the documents incorporated herein by reference. In connection with
forward-looking statements which appear in these disclosures, investors should
carefully review the factors set forth in this prospectus under "Risk Factors."
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RISK FACTORS
The Shares offered hereby are speculative in nature and involve a high degree of
risk. The following risk factors should be considered carefully. The risks
described below are not the only ones facing MetaCreations. Many factors could
cause results to be different, including the following risk factors and other
risks described herein or in the documents incorporated by reference herein. If
any of the following risks occur, our business would likely be adversely
affected and the trading price of our common stock could decline, resulting in a
loss of all or part of your investment.
SEASONALITY AND FLUCTUATIONS IN QUARTERLY RESULTS
If our future quarterly operating results fall below the expectations of
securities analysts or investors, the trading price of our common stock will
likely drop. Our quarterly operating results have fluctuated significantly in
the past, and we expect that they may continue to fluctuate in the future, as a
result of many factors, including:
- - Demand for our products;
- - Introduction or enhancement of new products by our company or our
competitors;
- - Market acceptance of our new products;
- - Industry press reviews of our products;
- - Changes in our prices or our competitors' prices;
- - The mix of distribution channels for our products;
- - The mix of products we sell;
- - Distributors' returns of our products; and
- - General economic conditions.
In addition, we ship our products as orders are received and we therefore have
little or no backlog. Hence, our quarterly operating results generally depend on
a number of factors that are difficult to forecast, including the volume and
timing of the orders we receive and our ability to fulfill these orders, and our
ability to close distribution and licensing agreements during a particular
quarter. We also experience some seasonality in our revenues as demand for our
products tends to increase during the quarter ending December 31 because of
year-end holiday buying trends.
As is common in the software industry, our past experience shows that a
disproportionately large percentage of revenues in each fiscal quarter occurs in
the third month of that quarter. We generally base our staffing and other
operating expenses in part on anticipated net revenues. Because a substantial
portion of these net revenues may not be realized until shortly before the end
of each fiscal quarter, significant variations in our financial position,
results of operations and cash flows can result if there are delays in the
receipt and shipment of orders. Such delays may stem, for example, from the
failure of other companies to produce and ship products we have requested.
We will most likely be unable to adjust spending to compensate for any
unexpected revenue shortfall. Accordingly, our financial position, results of
operations and cash flows would be adversely affected by any significant
shortfall in revenues. Additionally, we have recently restructured and have
focused on reducing our operating expenses to levels more consistent with
expected revenues. However, we cannot guarantee that such reductions in
operating expenses will be enough to restore our profitability.
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of our common stock has fluctuated significantly in the past.
The price at which our common stock will trade in the future will depend on a
number of factors including:
- - Our historical and anticipated operating results;
- - General market and economic conditions;
- - Our announcement of new products;
- - Actual or anticipated fluctuations in our operating results; and
- - Developments regarding our products, our competitors and their products.
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In addition, the stock market in general has experienced extreme price and
volume fluctuations in recent months. This volatility has had a substantial
effect on our stock price, as well as the stock prices of other software
companies, particularly graphics software companies. These broad market and
industry fluctuations may continue to adversely affect the market price of our
common stock.
PRODUCT TRANSITIONS AND PRODUCT RETURNS
From time to time, we may announce the introduction of new products, product
versions or technologies that may replace or shorten the life cycles of our
existing products. Our competitors may also make such announcements about their
products which may replace or shorten the life cycles of our products. In the
past, when we announced the anticipated release of a new version of a product,
we experienced increased returns of the current version of that particular
product. For the three months ended June 30, 1998, we increased our reserves for
returns because of lower than expected revenues in our domestic retail channels
and decreased demand in Japan. Although we provide allowances for anticipated
returns, we cannot guarantee that product returns will be less than these
allowances, and this would adversely affect our business.
From time to time, we have offered free upgrades to customers who have purchased
a product following an announcement of a new release and prior to shipment of
the new product version. Such free upgrades could adversely affect our revenues,
and hence, our business. In certain cases we may also sell our new products and
product versions at a discounted price to achieve market acceptance. These price
discounts could also adversely affect our revenues and hence, our business. In
addition, when we announce plans for new products or new releases, or when our
competitors make such announcements, customers may delay purchasing our current
products in anticipation of new products or new releases. This would also
adversely affect our business.
DEPENDENCE ON DISTRIBUTORS AND ON OTHER THIRD PARTIES
Although we do make some direct sales to customers, we generate most of our
revenues from sales through third party distributors. We use many different
distribution channels to sell our products worldwide. Examples of distribution
channels include hardware and software OEMs, international distributors,
educational distributors, VARs, hardware superstores, retail dealers and direct
marketers. Our future financial results depend in large part on our relationship
with third party distributors and their continued financial stability. Any
termination or significant disruption of our relationship with any major
distributor or retailer, or any significant reduction in sales volume
attributable to a major distributor or retailer, would adversely affect our
business.
Distribution channels through which we sell our products are subject to rapid
change, significant margin pressures, consolidation and other financial
difficulties. For example, if one of our distributors experienced financial
difficulties such as a bankruptcy, we might be unable to collect on accounts
receivable from that distributor which would adversely affect our business. It
is also possible that new channels of distribution will develop and that we may
not be able to effectively distribute our products through such new channels. We
depend in part on our third party distributors to promote our products to
retailers, who typically have a limited amount of shelf space subject to high
demand. We cannot be sure that our distributors and retailers will continue to
purchase our products or provide our products with adequate shelf space and
promotional support. Their failure to continue to do so would adversely affect
our business.
An important part of our strategy is to enhance and diversify our domestic and
international distribution channels. We are currently restructuring our domestic
and international sales and marketing force. We are also continuing to develop
relationships with new third-party distributors and resellers. Our ability to
increase our sales and market share will depend in large part on our success in
recruiting and training sales personnel, distributors and resellers.
INTERNATIONAL OPERATIONS
Our future success depends in part on our ability to expand our international
presence. We sell a large percentage of our products outside of the United
States. International sales accounted for approximately 25% of our net revenues
for the three months ended September 30, 1998 and approximately 35% of our net
revenues for the three months ended September 30, 1997. The decrease in
international sales resulted primarily from a decrease in international OEM and
licenses revenues. An important element of our business strategy is to continue
to expand our sales in international markets, primarily Japan
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and Western Europe. Our ability to expand our international presence depends on
our success in retaining effective international distributors and our ability to
hire and retain qualified employees abroad.
There are risks inherent in expanding and doing business internationally such
as:
- - Unexpected changes in regulatory requirements;
- - Problems and delays in collecting accounts receivable;
- - Tariffs and other trade barriers;
- - Difficulties in staffing and managing foreign operations;
- - Longer payment cycles;
- - Political instability;
- - Fluctuations in currency exchange rates;
- - Seasonal reductions in business activity during summer (vacation) months
in Europe and certain other parts of the world; and
- - Potentially adverse tax consequences.
Sales of our products are currently denominated in U.S. dollars. Accordingly,
any increase in the value of the U.S. dollar as compared to currencies in our
principal overseas markets would increase the cost in foreign denominated
currency of our products. This may adversely affect our sales in those markets.
To date, we have not engaged in currency hedging transactions to reduce the
effect of fluctuations in currency exchange rates. In addition, effective
copyright and trade secret protection may be limited or unavailable under the
laws of certain foreign jurisdictions. If any of these risks were to occur, they
would adversely affect the success of our international operations and would
adversely affect our business.
A significant portion of our net revenues stem from the Asia Pacific region,
primarily Japan. Japan has recently experienced weaknesses in their currency,
banking and equity markets. We cannot guarantee that the financial condition in
Japan and in the Asia Pacific region will improve in the near future. If the
current financial crisis in the Asia Pacific region continues or worsens, our
business will be adversely affected. For example, during the three months ended
June 30, 1998, our net revenues from the Asia Pacific region were decreased as a
result of depressed demand for our products due to the current Asian financial
crisis.
HIGHLY COMPETITIVE MARKETS
We face intense competition in the market for graphics software products. The
market for our products can change rapidly, and customers constantly demand new
product features, accelerated releases of new products and product enhancements.
We experience constant pressure to reduce the prices of our products.
Our products compete directly or indirectly with products offered by many other
large companies, including:
- - Adobe Systems Incorporated;
- - Autodesk, Inc.;
- - Corel Corporation;
- - Macromedia, Inc.;
- - Silicon Graphics, Inc. (through its Alias/Wavefront division);
- - Microsoft Corporation; and
- - Broderbund Software, Inc.
Many of our competitors or potential competitors are larger than we are and have
significantly greater financial, managerial, technical and marketing resources
than we have. Our business would be adversely affected if any of our competitors
cut prices, increased their promotions of their products (including bundling or
giveaways of products), announced or accelerated introduction of new products or
enhanced product features or acquired additional applications or technologies
from third parties.
Our present or future competitors may be able to develop products comparable or
superior to ours or may be able to develop new products faster than we can. We
also face competition from developers of personal computer operating systems,
such
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as Microsoft and Apple Computer, which may incorporate functions into their
operating systems which could be superior to or incompatible with our products.
Such competition would also adversely affect our business.
We are currently developing additional product enhancements that we believe will
address customer requirements, but we cannot be sure that we will complete our
development and introduction of these products on a timely basis. In addition,
we cannot be sure that these product enhancements will achieve market
acceptance. If we are unable to compete effectively in our markets, or if
competition becomes increasingly intense, our business would be adversely
affected.
DEPENDENCE ON KEY PERSONNEL AND DIFFICULTY OF IDENTIFYING AND HIRING CERTAIN
PERSONNEL
We depend on the continued employment of our senior executive officers and other
key management personnel. If any of our senior officers or other key employees
leave our company and are not adequately replaced, our business would be
adversely affected.
During February 1998, our previous Chief Executive Officer, John Wilczak,
resigned. Gary Lauer, who had most recently served as President of Silicon
Graphics, Inc.'s ("SGI") World Trade Group and Executive Vice President of SGI's
Worldwide Field Operations, succeeded Mr. Wilczak as our Chief Executive
Officer. In addition, in connection with our recent restructuring, our Senior
Vice President, Sales and Marketing; Vice President, Marketing; and Vice
President, Product Management and Design have left our company. We have hired a
Vice President, European Sales and Marketing, and a Vice President and General
Manager, Professional Products Group, and are seeking to hire at least one
additional Vice President, Sales and Marketing. If we do not succeed in
attracting new officers, our business would be adversely affected.
Our future success also depends on our continuing ability to identify, hire,
train and retain other highly qualified technical and managerial employees. The
competition for such employees is intense, and we have experienced difficulty in
identifying and hiring qualified engineering personnel. If we do not succeed in
attracting and retaining necessary technical and managerial employees in the
future, our business would be adversely affected.
RAPID TECHNOLOGICAL CHANGE; DEPENDENCE ON AND NEED FOR NEW PRODUCTS AND PRODUCT
VERSIONS; POTENTIAL DELAYS IN PRODUCT RELEASES
The market for visual computing graphics software products, and the personal
computer industry in general, is characterized by rapidly changing technology.
Product life cycles are short and downward pricing pressures are strong. As a
result, our success depends substantially upon our ability to continue to
enhance our products and to develop new products that meet customers' increasing
expectations and that incorporate the latest technology.
If our competitors introduce products that better address customers' needs, our
business would be adversely affected. We cannot guarantee that we will be
successful in developing and marketing enhancements to our existing products or
introducing new products on a timely basis. Nor can we guarantee whether any new
or enhanced products will be successful in the marketplace. If our new products
or product versions receive bad reviews in industry publications, this would
likely decrease their potential market acceptance and our business would be
adversely affected.
We intend to continue to increase our research and development expenditures. If
our increased research and development spending is not accompanied by increased
revenues, our business would be adversely affected. We have supplemented our
research and development efforts by exclusively licensing products developed by
or co-developed with third parties. We cannot guarantee that we will be able to
continue to obtain such outside product development capabilities on terms
favorable to us or at all. If we cannot maintain existing development
arrangements or fail to attract new product development partners, then we would,
at the least, have to further increase our research and development spending.
This would adversely affect our business. Furthermore, we cannot guarantee that
such additional research and development expenditures would result in the
production of commercially acceptable products or profitability.
We also depend upon internal efforts for the development of new products and
product enhancements. In the past, we have had delays in the development of new
products and product versions. We cannot guarantee that we can avoid delays
regarding our current product development or future development activities.
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We offer complex software products and they may contain undetected errors when
first introduced or as new versions are released. In the past, we have
discovered software errors in certain new products and enhancements after these
products were introduced to the marketplace. We cannot guarantee that our new
products or releases will be free of errors. If errors are found in our products
after we have commercially shipped them, we would likely experience bad product
reviews and a loss or delay of market acceptance. This would adversely affect
our business.
EVOLVING MARKETS FOR COMPUTER GRAPHIC IMAGING AND INTERNET/ONLINE DESIGN TOOLS
The markets for computer graphic imaging and Internet/online design tools are
still emerging. We cannot guarantee that digital graphic and Internet/online
content developers will adopt our products or that our existing products will
grow. Nor can we guarantee that we will have sufficient distribution resources
to market our products successfully or that any of our products will achieve
market acceptance.
The demand for computer graphic imaging and Internet/online design tools depends
on many factors including:
- - Installed base of digital graphic and multimedia capable personal
computers;
- - Widespread availability of digital media; and
- - Number and expertise of skilled content producers.
If the markets for such tools fail to grow or grow more slowly than we currently
anticipate, or if our products fail to achieve market acceptance, our business
would be adversely affected.
PROPRIETARY RIGHTS AND LICENSES
We rely on a combination of copyright, trademark, patent, trade secret laws,
employee and third-party nondisclosure agreements and exclusive contracts to
protect our intellectual and proprietary rights and products. We distribute our
software under shrinkwrap license agreements. We generally do not obtain signed
license agreements from the end users of our software.
As is typical in the software industry, we do not copy-protect our software. As
a result, unauthorized third parties may be able to copy or reverse engineer our
products. In addition, our competitors may independently develop technologies
that are substantially equivalent or superior to our technology. We may not be
able to police unauthorized uses of our products, and we expect that software
piracy could be a chronic problem. We also distribute or plan to distribute our
products in other countries which do not protect the intellectual property of
our products to the same extent as laws in the United States.
We also believe that the growing number of software products available and the
increasing overlap of products may lead to a greater number of infringement
claims. Our products may be the subject of infringement claims in the future,
which could result in costly litigation and could require us to obtain a license
to the intellectual property of third parties. We may be unable to obtain
licenses from these third parties on favorable terms, if at all. Even if a
license is available, we may have to pay substantial royalties to obtain it. If
we cannot obtain necessary licenses on reasonable terms, our business would be
adversely affected.
YEAR 2000 COMPLIANCE
Many currently installed computer systems and software products are coded to
accept only two digit entries in the date code field. Beginning in the year
2000, these date code fields will need to accept four digit entries to
distinguish 21st century dates from 20th century dates. As a result, in less
than two years, computer systems and software used by many companies may need to
be upgraded to comply with such "Year 2000" requirements. The Year 2000 problem
could affect computers, software and other equipment used, operated, or
maintained by us, our business partners, our suppliers and our customers.
We have initiated an assessment project that addresses our significant systems
that may have Year 2000 compliance issues. During 1997, we completed
implementation of a Year 2000 compliant enterprise-wide information system.
Currently, we are in the process of inventorying and analyzing our remaining
centralized computer and embedded systems to identify any potential Year 2000
issues. We currently expect assessment, remediation and validation of our
internal systems, in addition
-11-
<PAGE> 13
to the development of applicable contingency plans, to be completed by the
middle of 1999. We do not expect the cost of remediation to be material to our
business. Additionally, we presently believe that with the implementation of our
new information system and modification to existing software, Year 2000
compliance will not adversely affect our business. However, there can be no
assurance that our internal software will contain all date code changes
necessary to prevent processing errors potentially arising from calculations
using the Year 2000 date. Any disruptions in product development or other
operations of the Company as a result of Year 2000 noncompliance could adversely
affect our business.
Furthermore, there can be no assurance that third parties utilized by us are or
will be Year 2000 compliant. Specifically, we contract with third parties for
the manufacture and distribution of our products. Should any of our key
suppliers or distributors not achieve Year 2000 readiness, we may be unable to
manufacture our products or effectively distribute our products to our
customers. As a result, we have initiated communications with our key suppliers
and distributors and plan to monitor the status of their Year 2000 readiness. We
expect to complete the readiness assessment of our key suppliers and
distributors by March 31, 1999. To the extent that any of our principal
suppliers and distributors fail to demonstrate Year 2000 readiness, we will
evaluate alternatives that could include the identification of alternate
suppliers or distributors which have demonstrated Year 2000 readiness and/or the
accumulation of inventory to assure production capability where feasible or
warranted. These activities are intended to provide a means of managing our
risk, but cannot eliminate the potential for disruption due to third party
failure to achieve Year 2000 compliance. Consequently, failure of any of our
principal suppliers or distributors to achieve Year 2000 compliance could
adversely affect our business.
We believe that the current versions of our products are Year 2000 compliant;
however, there can be no assurance that our current products do not contain
undetected errors or defects associated with Year 2000 that may result in costs
which adversely affect our business.
-12-
<PAGE> 14
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the Shares.
All proceeds from the sale of the Shares will be for the account of the Selling
Stockholders, as described below. See "Selling Stockholders" and "Plan of
Distribution."
SELLING STOCKHOLDERS
The following table sets forth as of the date of this prospectus, the name of
each of the Selling Stockholders, the number of shares of Common Stock that each
such Selling Stockholder owns as of such date, the number of shares of Common
Stock owned by each Selling Stockholder that may be offered for sale from time
to time by this prospectus, and the number of shares of Common Stock to be held
by each such Selling Stockholder assuming the sale of all the Common Stock
offered hereby.
The Selling Stockholders are former or current employees of the Company. The
Company may amend or supplement this prospectus from time to time to update the
disclosure set forth herein.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED NUMBER OF SHARES BENEFICIALLY
PRIOR TO OFFERING SHARES OWNED AFTER OFFERING
------------------------- --------------------
NAME OF SELLING STOCKHOLDER NUMBER PERCENT BEING OFFERED NUMBER PERCENT
--------------------------- ------ ------- ------------- ------ -------
<S> <C> <C> <C> <C> <C>
Jay Jennings 415 * 415 * *
Pierre Berkaloff (1) 2,238 * 2,238 * *
Betty Franklin 1,376 * 1,376 * *
John Hartnett 2,872 * 2,872 * *
Kari Zeni 111 * 111 * *
Mark Sanders 1,752 * 1,752 * *
Ben Weiss 3,044 * 3,044 * *
Teresa Bridwell 535 * 535 * *
Katherine Becke 560 * 560 * *
Total 12,903 12,903
</TABLE>
- ---------------
(1) Mr. Berkaloff has served as Vice President of Engineering of the Company
since May 1997.
*Less than 1%.
PLAN OF DISTRIBUTION
The Shares covered by this prospectus 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 the timing, manner and size of
each sale. The Selling Stockholders may sell the Shares being offered hereby on
the Nasdaq National Market, or otherwise, at prices and under terms then
prevailing or at prices related to the then current market price, at varying
prices or at negotiated prices. The Shares may be sold, without limitation, by
one or more of the following means of distribution: (a) a block trade in which
the broker-dealer so engaged will attempt to sell Shares as agent, but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus; (c) an
over-the-counter distribution in accordance with the rules of the Nasdaq
National Market; (d) ordinary brokerage transactions and transactions in which
the broker solicits purchasers; and (e) in privately negotiated transactions. To
the extent required, this prospectus may be amended and supplemented from time
to time to describe a specific plan of distribution.
In connection with distributions of the Shares or otherwise, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with such transactions, broker-dealers or
other financial institutions may engage in short sales of the Company's Common
Stock in the course of hedging the positions they assume
-13-
<PAGE> 15
with Selling Stockholders. The Selling Stockholders may also sell the Company's
Common Stock short and deliver the Shares offered hereby to close out such short
positions. The Selling Stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions which require
the delivery to such broker-dealer or other financial institution of Shares
offered hereby, which Shares such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction). The Selling Stockholders may also pledge Shares to a
broker-dealer or other financial institution, and, upon a default, such
broker-dealer or other financial institution, may effect sales of the pledged
Shares pursuant to this prospectus (as supplemented or amended to reflect such
transaction). In addition, any Shares that qualify for sale pursuant to Rule 144
may, at the option of the holder thereof, be sold under Rule 144 rather than
pursuant to this prospectus.
Any broker-dealer participating in such transactions as agent may receive
commissions from the Selling Stockholder and/or purchasers of the shares offered
hereby (and, if it acts as agent for the purchaser of such shares, from such
purchaser). Usual and customary brokerage fees will be paid by the Selling
Stockholder. Broker-dealers may agree with the Selling Stockholder to sell a
specified number of shares at a stipulated price per share, and, to the extent
such a broker-dealer is unable to do so acting as agent for the Selling
Stockholder, to purchase as principal any unsold shares at the price required to
fulfill the broker-dealer commitment to the Selling Stockholder. Broker-dealers
who acquire shares as principal may thereafter resell such shares from time to
time in transactions (which may involve cross and block transactions and which
may involve sales to and through other broker-dealers, including transactions of
the nature described above) in the over-the-counter market, in negotiated
transactions or otherwise at market prices prevailing at the time of sale or at
negotiated prices, and in connection with such resales may pay to or receive
from the purchasers of such shares commissions computed as described above.
To comply with the securities laws of certain states, if applicable, the Shares
will be sold in such jurisdictions only through registered or licensed brokers
or dealers. In addition, in certain states the Shares may not be sold unless
they have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and is
complied with.
The Company has advised the Selling Stockholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of Shares in the
market and to the activities of the Selling Stockholders and their affiliates.
In addition, the Company will make copies of this prospectus available to the
Selling Stockholders and has informed them of the need for delivery of copies of
this prospectus to purchasers at or prior to the time of any sale of the Shares
offered hereby. The Selling Stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities Act.
At the time a particular offer of Shares is made, if required, a prospectus
Supplement will be distributed that will set forth the number of Shares being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
commission and other item constituting compensation, any discount, commission or
concession allowed or reallowed or paid to any dealer, and the proposed selling
price to the public.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation limits the liability of directors for
monetary damages to the maximum extent permitted by Delaware law. Delaware law
provides that directors of a corporation will not be personally liable for
monetary damages for breach of their fiduciary duties as directors, except for
liability (i) for any breach of their duty of loyalty to the corporation or its
stockholders; (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law; (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the Delaware General Corporation Law; or (iv) for any
transaction from which the director derived an improper personal benefit.
The Company's Bylaws provide that the Company shall indemnify its directors and
executive officers and may indemnify its other officers, employees and agents to
the fullest extent permitted by law. The Company's Bylaws also permit the
Company to secure insurance on behalf of any officer, director, employee or
other agent for any liability arising out of his or her actions in such
capacity, regardless of whether the Bylaws would permit indemnification.
-14-
<PAGE> 16
The Company has entered into agreements to indemnify its directors and officers,
in addition to indemnification provided for in the Company's Bylaws. These
agreements, among other things, indemnify the Company's directors and officers
for certain expenses (including attorneys' fees), judgments, fines and
settlement amounts incurred by any such person in any action or proceeding,
including any action by or in the right of the Company, arising out of such
person's services as a director or officer of the Company, any subsidiary of the
Company or any other company or enterprise to which the person provides services
at the request of the Company.
The Company also maintains an insurance policy insuring its directors and
officers against liability for certain acts and omissions while acting in their
official capacities.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
LEGAL MATTERS
Certain legal matters relating to the validity of the securities offered hereby
will be passed upon for the Company by Wilson Sonsini Goodrich & Rosati,
Professional Corporation, Palo Alto, California ("WSGR"). Certain members of
WSGR beneficially own an aggregate of approximately 25,000 shares of the
Company's Common Stock.
EXPERTS
The audited consolidated financial statements and financial statement schedule
as of December 31, 1997 and 1996 and for each of the three years ended December
31, 1997, 1996 and 1995 incorporated by reference in this prospectus have been
incorporated by reference in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, which report is given upon the authority of said
firm as experts in accounting and auditing.
-15-
<PAGE> 17
================================================================================
PROSPECTIVE INVESTORS MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS. NEITHER METACREATIONS NOR ANY SELLING STOCKHOLDER HAS AUTHORIZED
ANYONE TO PROVIDE PROSPECTIVE INVESTORS WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT
SEEKING AN OFFER TO BUY THE SHARES IN ANY JURISDICTION WHERE THE OFFER OR SALE
IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT ONLY
AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF THE DELIVERY OF
THIS PROSPECTUS OR ANY SALE OF THE SHARES.
----------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Additional Information .................................................. 3
Incorporation of Certain Documents by Reference ......................... 4
Available Information ................................................... 4
The Company ............................................................. 5
Forward-Looking Statements .............................................. 6
Risk Factors ............................................................ 7
Use of Proceeds ......................................................... 13
Selling Stockholders .................................................... 13
Plan of Distribution .................................................... 13
Indemnification of Directors and Officers ............................... 14
Legal Matters ........................................................... 15
Experts ................................................................. 15
</TABLE>
----------------------
12,903 Shares
METACREATIONS
CORPORATION
----------------------
Common Stock
----------------------
PROSPECTUS
, 1998
================================================================================
<PAGE> 18
METACREATIONS CORPORATION
REGISTRATION STATEMENT ON FORM S-3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The Company will pay all expenses incident to the offering and sale to the
public of the shares being registered other than any commissions and discounts
of underwriters, dealers or agents and any transfer taxes. Such expenses are set
forth in the following table. All of the amounts shown are estimates except for
the Securities and Exchange Commission ("SEC") registration fee and the Nasdaq
Stock Market listing fee.
<TABLE>
<S> <C>
SEC Registration Fee ..................................... $ 13.00
Accounting fees and expenses ............................. $ 1,000.00
Nasdaq Stock Market listing fee .......................... $ 2,000.00
Miscellaneous ............................................ $ 987.00
------------
Total .................................................... $ 4,000.00
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation limits the liability of directors for
monetary damages to the maximum extent permitted by Delaware law. Delaware law
provides that directors of a corporation will not be personally liable for
monetary damages for breach of their fiduciary duties as directors, except for
liability (i) for any breach of their duty of loyalty to the corporation or its
stockholders; (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law; (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the Delaware General Corporation Law; or (iv) for any
transaction from which the director derived an improper personal benefit.
The Company's Bylaws provide that the Company shall indemnify its directors and
executive officers and may indemnify its other officers, employees and agents to
the fullest extent permitted by law. The Company's Bylaws also permit the
Company to secure insurance on behalf of any officer, director, employee or
other agent for any liability arising out of his or her actions in such
capacity, regardless of whether the Bylaws would permit indemnification.
The Company has entered into agreements to indemnify its directors and officers,
in addition to indemnification provided for in the Company's Bylaws. These
agreements, among other things, indemnify the Company's directors and officers
for certain expenses (including attorneys' fees), judgments, fines and
settlement amounts incurred by any such person in any action or proceeding,
including any action by or in the right of the Company, arising out of such
person's services as a director or officer of the Company, any subsidiary of the
Company or any other company or enterprise to which the person provides services
at the request of the Company.
The Company also maintains an insurance policy insuring its directors and
officers against liability for certain acts and omissions while acting in their
official capacities.
II-1
<PAGE> 19
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
- ---------
<S> <C>
4.1 1995 Employee Stock Purchase Plan, as amended.(1)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1).
24.1 Power of Attorney (contained on Page II-3).
</TABLE>
- -------------
(1) Previously filed as Exhibit 10.6 to the Company's Form 10-Q filed on May
14, 1998.
ITEM 17. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement to include any material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in the Registration Statement;
(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 therein, and the
offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of this offering.
B. Undertaking Regarding Filings Incorporating Subsequent Exchange
Act Documents by Reference.
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 (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
C. Undertaking in Respect of Indemnification.
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 SEC 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.
II-2
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable cause to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Carpinteria, State of California, on November 13,
1998.
METACREATIONS CORPORATION
By: /s/ Terance A. Kinninger
----------------------------------------------
Terance A. Kinninger,
Sr. Vice President and Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Terance A. Kinninger his attorney-in-fact, with
the power of substitution, for him in any and all capacities, to sign any
amendment to this Registration Statement on Form S-3, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting to said attorney-in-fact full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons on behalf of the
Registrant on November 13, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
----------- ---------------
<S> <C>
President, Chief Executive Officer (Principal Executive
/s/ Gary L. Lauer Officer) and Director
- ---------------------------------
Gary L. Lauer
/s/ Terance A. Kinninger Sr. Vice President and Chief Financial Officer (Principal
- --------------------------------- Financial and Accounting Officer)
Terance A. Kinninger
Director and Chief Design Officer
- ---------------------------------
Kai Krause
/s/ Samuel H. Jones, Jr. Director
- ---------------------------------
Samuel H. Jones, Jr.
Director
- ---------------------------------
Bert Kolde
/s/ William H. Lane III Director
- ---------------------------------
William H. Lane III
/s/ Howard L. Morgan Chairman of the Board
- ---------------------------------
Howard L. Morgan
/s/ Mark Zimmer Director
- ---------------------------------
Mark Zimmer
/s/ Terance A. Kinninger
- ---------------------------------
Terance A. Kinninger, as attorney-in-fact
</TABLE>
II-3
<PAGE> 21
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
==========================================================
EXHIBITS
==========================================================
REGISTRATION STATEMENT ON FORM S-3
METACREATIONS CORPORATION
NOVEMBER 13, 1998
<PAGE> 22
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
- ---------
<S> <C>
4.1 1995 Employee Stock Purchase Plan, as amended.(1)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1).
24.1 Power of Attorney (contained on Page II-3).
</TABLE>
- -------------
(1) Previously filed as Exhibit 10.6 to the Company's Form 10-Q filed on May
14, 1998.
<PAGE> 1
EXHIBIT 5.1
November 13, 1998
MetaCreations Corporation
6303 Carpinteria Avenue
Carpinteria, CA 93013
RE: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by
you with the Securities and Exchange Commission on or about the date hereof (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of a total of up to 12,903 shares of your
Common Stock (the "Shares"). All of the Shares are issued and outstanding and
may be offered for sale for the benefit of the selling stockholders named in the
Registration Statement. The Shares are to be sold from time to time in the
over-the counter-market at prevailing prices or as otherwise described in the
Registration Statement. As your legal counsel, we have examined the proceedings
taken by you in connection with the sale of the Shares.
It is our opinion that the Shares are legally and validly issued, fully
paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever it appears in the
Registration Statement, including the prospectus constituting a part thereof,
and any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
MetaCreations Corporation
We consent to the incorporation by reference in the Registration
Statement of MetaCreations Corporation on Form S-3 (to be filed on or about
November 13, 1998) of our report dated January 26, 1998 on our audits of the
consolidated financial statements and financial statement schedule of
MetaCreations Corporation as of December 31, 1997 and 1996 and for each of the
three years in the period ended December 31, 1997. We also consent to the
reference to our firm under the caption "Experts."
PricewaterhouseCoopers LLP
Woodland Hills, California
November 11, 1998
