SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 23, 1999
-------------
ADRENALIN INTERACTIVE, INC.
---------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-27828 13-3779546
-------- ------- ----------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
5301 Beethoven Street, Los Angeles, California 90066
--------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 821-7880
--------------
-----------------------------------------
(Former name or former address, if changed since last report)
Exhibit Index on Page 5
Page 1 of 19
<PAGE>
ITEM 5. OTHER EVENTS.
On July 23, 1999, the Registrant consummated a loan transaction
documented by a secured subordinated promissory note (the "Note") in which the
Registrant loaned a principal amount of $500,000.00 to McGlen Micro, Inc.
("McGlen"). The Note was entered into pursuant to the terms of that certain
Agreement and Plan of Merger ("Merger Agreement") among the Registrant, McGlen,
George Lee, Mike Chen, and ACST Computers, Inc., a California corporation.
Under the terms of the Note, the loan has a term of 366 days, but
McGlen may repay the principal without penalty or premium. The outstanding
principal amount of the loan will accrue interest at an annual rate equal to
8%. In the event of a default, the total amount outstanding becomes immediately
due and payable in full at the Registrant's option. McGlen covenants to use
the proceeds of the Note only for the purpose of working capital or for other
corporate purposes, until the Note has been repaid. The Registrant and McGlen
also entered into a security agreement which secures the Note with a junior
security interest in favor of the Registrant in the assets of McGlen. The debt
represented by the Note is subordinate and subject in right of payment to the
prior payment in full in cash of the principal amount of any currently existing
secured obligation of McGlen or its subsidiaries, and any future vendor/supplier
accounts (similar to Synnex, Ingram Micor, IBM, etc.) which from time to time
require a security interest in McGlen's assets, and all related interest, fees,
expenses, refinancing thereof, and other amounts payable with respect thereto.
In addition, the Registrant and the other parties to the Merger
Agreement have entered into an amendment of the Merger Agreement (the "First
Amendment") pursuant to which they have extended the termination date of the
Merger Agreement from August 31, 1999 until October 31, 1999.
The foregoing description of the Note and the First Amendment is
qualified in its entirety by reference to the Note and the First Amendment,
respectively, a copy of each which is attached hereto as an exhibit and
incorporated herein by reference.
Attached hereto as an exhibit is a press release announcing the
transaction evidenced by the Note and the extension of the termination date
under the Merger Agreement.
Page 2 of 19
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS
2.1 First Amendment dated July 23, 1999 to that certain Agreement
and Plan of Merger dated as of April 28, 1999, entered into by
and among Adrenalin Interactive, Inc., a Delaware corporation
(the "Parent"), Adrenalin Acquisition Corporation, a
California corporation and a wholly owned subsidiary of the
Parent ("Merger Sub"), McGlen Micro, Inc., a California
corporation (the "Company"), George Lee, Mike Chen, and ACST
Computers, Inc., a California corporation.
10.1 Secured Subordinated Note, dated July 23, 1999 made by McGlen
Micro, Inc. in favor of Adrenalin Interactive, Inc. in the
principal amount of $500,000, payable on July 23, 2000.
99.1 Press Release dated July 23, 1999 issued by the Registrant.
Page 3 of 19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ADRENALIN INTERACTIVE, INC.
July 23, 1999 By: /s/ Jay Smith, III
____________________________
Jay Smith, III, President and
Chief Executive Officer
Page 4 of 19
<PAGE>
EXHIBIT INDEX
Exhibit Page
- ------- ----
2.1 First Amendment to Agreement and Plan of Merger dated
July 23, 1999. 6
10.1 Secured Subordinated Note, dated July 23, 1999 made by McGlen
Micro, Inc. in favor of Adrenalin Interactive, Inc. in the
principal amount of $500,000, payable July 23, 2000. 9
99.1 Press Release dated July 23, 1999 issued by the Registrant. 18
Page 5 of 19
<PAGE>
Exhibit 2.1
-----------
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This First Amendment dated July 23, 1999 ("First Amendment") to that
certain Agreement and Plan of Merger ("Merger Agreement") dated as of April 28,
1999, entered into by and among Adrenalin Interactive, Inc., a Delaware
corporation (the "Parent"), Adrenalin Acquisition Corporation, a California
corporation and a wholly owned subsidiary of the Parent ("Merger Sub"), McGlen
Micro, Inc., a California corporation (the "Company"), George Lee, Mike Chen,
and ACST Computers, Inc., a California corporation (collectively, the "Principal
Shareholders") (the Parent, the Merger Sub, the Company and the Principal
Shareholders, collectively, the "Parties") with reference to the following
facts:
A. Pursuant to Section 11.4 of the Merger Agreement, the Parties
desire to amend the Merger Agreement to extend the termination date of thereof.
NOW, THEREFORE, IN CONSIDERATION OF the mutual promises set forth
herein and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties agree as follows:
1. Amendment of the Merger Agreement/Extension of Time. The date set forth
in Section 10.2(a) of the Merger Agreement is hereby changed to October 31,
1999.
2. Ratification. Except as amended pursuant to this First Amendment, the
Merger Agreement is hereby ratified and confirmed and shall remain in full force
and effect in accordance with its terms.
3. Counterparts. This First Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
-1-
Page 6 of 19
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this First Amendment to
be executed as of the date first written above.
"PARENT"
ADRENALIN INTERACTIVE, INC.,
a California corporation
By: __________________________________
Jay Smith, III
President and Chairman
"MERGER SUB"
ADRENALIN ACQUISITION CORPORATION,
a California corporation
By: __________________________________
Jay Smith, III
President
By: __________________________________
Jay Smith, III
Secretary
-2-
Page 7 of 19
<PAGE>
"THE COMPANY"
MCGLEN MICRO INC., a California corporation
By: _________________________________
George Lee
President
By: _________________________________
Mike Chen
Secretary
"THE PRINCIPAL SHAREHOLDERS"
---------------------------------------
George Lee
an Individual
---------------------------------------
Mike Chen
an Individual
ACST COMPUTERS, INC.,
a California corporation
By: __________________________________
Alex Chen
President and Chairman
-3-
Page 8 of 19
<PAGE>
Exhibit 10.1
------------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
SECURED SUBORDINATED CONVERTIBLE NOTE
$500,000 Tustin, California
July 23, 1999
This Secured Subordinated Convertible Note (the "Note") between
McGlen Micro, Inc., a California corporation (the "Maker"), and Adrenalin
Interactive, Inc., a Delaware corporation (the "Payee"), is executed and
delivered under and pursuant to the terms of that certain Agreement and Plan of
Merger dated as of April 28, 1999 (the "Agreement) by and among the Maker, the
Payee, Adrenalin Acquisition Corporation, a California corporation and a
wholly-owned subsidiary of the Payee, George Lee, Mike Chen, and ACST Computers,
Inc., a California corporation.
1. Payment.
1.1 Promise to Pay. The Maker promises to pay to the order of the
Payee, its successors and assigns, at 5301 Beethoven Street, Los Angeles,
California 90066, the principal sum of five hundred thousand dollars ($500,000).
The Maker also promises to pay interest at the rate and on the date set forth
herein.
1.2 Interest. Interest shall accrue on the outstanding principal
amount loaned pursuant to this Note at an annual rate equal to 8%. Interest
shall be due and payable on the Maturity Date, as defined below.
1.3 Term. This Note shall mature 366 days from the date hereof (such
date, the "Maturity Date"). If the Maturity Date falls on a non-business day
(including weekends and nationally-recognized holidays), then payment shall be
considered to be due and payable on the next succeeding business day and any
extension of time shall be reflected in computing interest.
-1-
Page 9 of 19
<PAGE>
1.4 Prepayment. This Note may be prepaid in whole or in part from
time to time without penalty or premium. The amount of any prepayment shall be
deducted from the amount of interest due on the principal as of the date of
prepayment, and thereafter any remaining amount of such prepayment shall be
deducted from the principal amount, and, subsequently, the remaining unpaid
principal, if any, shall continue to accrue interest at an annual rate of 8%
until the Maturity Date or otherwise prepaid.
2. Security. This Note is secured by a security interest in the assets
("Assets") of Maker in favor of the Payee pursuant to that certain Security
Agreement between the Maker and the Payee of even date herewith.
3. Subordination.
3.1 Subordination to Senior Obligations. The Maker covenants and
agrees, and by its acceptance hereof the Payee likewise covenants and agrees,
that, to the extent and in the manner hereinafter set forth in this Section 4,
this Note, and the payment of the principal of and interest hereunder
(collectively, the "Subordinated Obligations"), are hereby expressly made
subordinate and subject in right of payment to the prior payment in full in cash
of the principal amount of all Senior Indebtedness (defined as any currently
existing secured obligations of Maker or its subsidiaries, and any future
vendor/supplier accounts (similar to Synnex, Ingram Micro, IBM, etc.) which from
time to time require a security interest in theMaker's assets, all related
interest, fees, expenses, refinancings thereof, and other amounts payable with
respect to any such Senior Indebtedness. This Section 3 shall be reinstated if
at any time any payment of any of the Senior Indebtedness is rescinded or must
otherwise be returned by any holder of Senior Indebtedness or any agent of such
holder. The holders of the Senior Indebtedness are third-party beneficiaries of
the provisions of this Section 3 and are entitled to rely hereon. In furtherance
of the subordination provisions of this Section 3, the Payee shall subordinate
the Payee's security interest as set forth in this Section 3.1 to any security
interest given to any future vendor/supplier of Maker (similar to Synnex, Ingram
Micro, IBM, etc.).
3.2 Payment Over of Proceeds Upon Dissolution. In the event of (a)
any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relative to the Maker or its assets, or (b) any liquidation,
dissolution or other winding up of the Maker, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or (c) any assignment for
the benefit of creditors or any the marshaling of assets and liabilities of the
Maker, then and in any such event:
(x) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of all amounts due or to become due on or in
respect of all Senior Indebtedness, before the Payee is entitled to
receive any payment on account of the Subordinated Obligations;
-2-
Page 10 of 19
<PAGE>
(y) any payment or distribution of assets of the Maker of any kind
or character to which the Payee would be entitled but for the provisions
of this Section 4 (other than any payment or distribution in the form of
equity securities or other securities subordinated in right of payment to
all Senior Indebtedness to the same extent as, or to a greater extent
than, the Subordinated Obligations) shall be paid to the holders of Senior
Indebtedness, to the extent necessary to make payment in full in cash of
all Senior Indebtedness; and
(z) in the event that, notwithstanding the foregoing provisions of
this Section, the Payee shall have received any such payment or
distribution (but excluding any payment of the character described in the
parenthetical clause in the foregoing clause (y)) before all Senior
Indebtedness is paid in full in cash, then such payment or distribution
shall be held in trust for the holders of the Senior Indebtedness and paid
over or delivered forthwith for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full in cash, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
If the Payee fails to file claims or proofs of claim in any proceeding of
the type referred to in the first sentence of this Section 3.2 earlier than 10
days prior to the deadline for any such filing, the Payee hereby appoints the
holders of the Senior Indebtedness as its attorney (i) to file such claims or
proofs of claim and/or (ii) if the Payee fails to vote any such claim at least
10 days prior to the expiration of the time to vote such claim, to vote such
claim; provided, that the Senior Indebtedness shall have no obligation to file
and/or vote any such claim.
3.3 Not Payment in Certain Circumstances.
(a) In the event that any payment of principal of or interest
on the Senior Indebtedness is not paid when due, whether at stated maturity, by
mandatory prepayment, by acceleration or otherwise ("Payment Default"), then no
payment shall be made by the Maker, or accepted by the Payee, on account of the
Subordinated Obligations, unless and until such payment shall have been made or
such Payment Default is waived in accordance with the terms of the Senior
Indebtedness.
(b) In the event that any event of default other than a
Payment Default (each a "Non-Payment Default") has occurred and is continuing
and the Maker shall have received written notice of such Non-Payment Default (a
"Blockage Notice") from the holders of the Senior Indebtedness, then no payment
shall be made by the Maker, or accepted by the Payee, or account of the
Subordinated Obligations during the period commencing on the date the Maker
-3-
Page 11 of 19
<PAGE>
received such Blockage Notice and ending on the earlier of (A) the date 180 days
thereafter and (B) the date on which such Non-Payment Default has been cured or
waived; provided, that (Y) in any 365 consecutive day period, irrespective of
the number of defaults with respect to Senior Indebtedness during such period,
Blockage Notices may be in effect for no more than 180 days in the aggregate and
(Z) a Non-Payment Default or event which, with the giving of notice and/or lapse
of time, would become a Non-Payment Default which existed on the date of the
commencement of any such blockage period may be used as the basis for any
subsequent Blockage Notice unless such Non-Payment Default or event, as the case
may be, shall in the interim have been cured or waived for a period of not less
than 90 consecutive days.
(c) The failure of the Maker to make any payment with respect
to the Subordinated Obligations by reason of the operation of this Section 3.3
shall not be construed as preventing the occurrence of a default hereunder.
Immediately upon the expiration of any period under this Section 3.3 during
which no payment may be made on account of the Subordinated Obligation, the
Maker may resume making any and all payments on account of the Subordinated
Obligations (including any payment of principal, interest or any other amount
missed during such period), which payment (if so made in full) shall be deemed
to have cured, and the Payee shall be deemed to have waived, any default which
may arise on account of any such missed payment.
(d) In the event that, notwithstanding the foregoing, the
Payee shall have received any payment prohibited by this Section 3.3, then and
in such event such payment shall be held in trust for the holders of the Senior
Indebtedness and paid over and delivered forthwith to the agent for the holders
of the Senior Indebtedness for application to the Senior Indebtedness remaining
unpaid.
3.4 Subrogation to Rights of Holders of Senior Indebtedness. Subject
to the payment in full in cash of all Senior Indebtedness, the Payee shall be
subrogated to the rights of the holders of the Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of and interest on this Note shall be
paid in full. For purposes of such subrogation, no payments or distributions to
the holders of Senior Indebtedness of any cash, property or securities to which
the Payee would be entitled except for the provisions of this Section 3, and no
payments pursuant to the provisions of this Section 3 to the holders of Senior
Indebtedness by the Payee shall, as among the Maker, its creditors (other than
holders of Senior Indebtedness), and the Payee be deemed to be a payment or
distribution by the Maker to or on account of the Senior Indebtedness.
-4-
Page 12 of 19
<PAGE>
3.5 Provisions Solely to Define Relative Rights. The provisions of
this Section 3 are made and are intended solely for the purpose of defining the
relative rights of the Payee on the one hand and the holders of Senior
Indebtedness on the other hand. Nothing contained in this Section 3 or elsewhere
in this Note is intended to or shall impair, as among the Maker and the Payee,
the obligation of the Maker, which is absolute and unconditional, to pay to the
Payee the principal of and interest under this Note as and when the same shall
become due and payable.
3.6 No Waiver of Subordination Provisions. No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Maker or by any act or failure to act, in good
faith, by any such holder, or by any non-compliance by the Maker with the terms,
provisions and covenants of this Note, regardless of any knowledge thereof any
such holder may have or be otherwise charged with. Without in any way limiting
the generality of the foregoing sentence, the holders of Senior Indebtedness
may, at any time and from time to time, without the consent of or notice to the
Payee, without incurring responsibility to the Payee and without impairing or
releasing the subordination provided in this Section 3 or the obligations
hereunder of the Payee to the holders of Senior Indebtedness, do any one or more
of the following: (a) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; and (c) exercise
or refrain from exercising any rights against the Maker and any other person.
3.7 Limitation on Rights and Remedies: Notice of Exercise of
Remedies. Notwithstanding anything contained herein to the contrary, for any
period during which the Payee shall be blocked from receiving payments pursuant
to Section 3.3 hereof (but in no event exceeding 90 days), the Payee shall not
(i) accelerate any portion of the Subordinated Obligation, (ii) initiate any
judicial proceeding or action to collect any portion of the Subordinated
Obligation, or (iii) initiate any case, proceeding or other action in respect of
the Maker of the type referred to in clause (a) or (b) of clause (b) (each a
"Proceeding") hereof unless, prior to the expiration of such period, (i) the
holders of the Senior Indebtedness shall take any such action in respect of the
Senior Indebtedness or (ii) the Senior Indebtedness and/or the Subordinated
Obligations shall have become automatically due payable in accordance with their
respective terms.
-5-
Page 13 of 19
<PAGE>
4. Maker's Covenant Re Use of Proceeds. The Maker agrees that until all
indebtedness represented hereby has been paid, the Maker will use the proceeds
of this Note for the purpose of working capital or other corporate purposes.
5. Events of Default. The occurrence of any of the following events shall
constitute an Event of Default:
5.1 Failure to Pay Principal or Interest. Failure to pay any
principal or interest when due hereunder.
5.2 Breach of Maker's Covenants. The breach by Maker of any covenant
or other term or condition of this Note and continuance thereof for a period of
ten (10) days after written notice to the Maker from Payee.
5.3 Insolvency, Receiver or Trustee. If the Maker shall:
(a) make an assignment for the benefit of creditors;
(b) apply for or consent to the appointment of a receiver or
trustee for it or for a substantial part of its property or
business or if such a receiver or trustee otherwise shall be
appointed; or
(c) admit in writing its inability to pay its debts as they
mature.
5.4 Bankruptcy. Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings for relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by the Maker or shall
be instituted against the Maker and shall not have been vacated by appropriate
order of a court within thirty days of being instituted.
5.5 Default on Other Loan Agreements. Except as may be limited
below, failure to pay when due any other material obligation, or obligations
which in the aggregate are material, for money borrowed or allow any event of
default or default under any other agreement involving the borrowing of money or
the advance of credit, if such event of default or default gives the holder or
holders of the obligation or obligations the right to accelerate the
indebtedness.
5.6 Assignment by the Maker Without Consent. Except as contemplated
in the Merger Agreement entered into between the Maker and the Payee, assignment
of any of the Maker's obligation hereunder, with an assignment for purposes of
this Section 5 being deemed to include an assignment by operation of law, a
change of control of the Maker, or a sale by the Maker of all or substantially
all of its assets, unless such assignment has been consented to by the Payee in
writing.
-6-
Page 14 of 19
<PAGE>
Upon the occurrence of any Event of Default, the outstanding balance
and other amounts payable by the Maker under this Note shall, at the option of
the Payee, become immediately due and payable in full (except in the case of any
Event of Default of the types described in paragraphs 5(c) and 5(e) above, in
which case all amounts outstanding hereunder shall automatically become due and
payable in full), and the holder hereof may proceed to collect all amounts
payable hereunder or in connection herewith, by suit at law or in equity or
otherwise, all remedies being cumulative and not in lieu of any other remedies.
6. Miscellaneous.
6.1 Failure or Indulgence Not Waiver. No failure or delay on the
part of the Payee hereof in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.
6.2 Amendment and Consent. The term "Note" or "this Note" and all
references thereto, as used throughout this instrument, shall mean this
instrument as originally executed or if later amended or supplemented, then, as
so amended or supplemented. This Note may be amended only by a writing executed
by the Maker and consented to by the Payee.
6.3 Assignability. This Note shall be binding upon the Maker, its
successors and assigns, and shall inure to the benefit of the Payee, and any
successors and assigns of the Payee.
6.4 Waivers. The Maker hereby waives presentment, demand for
payment, dishonor, notice of dishonor, protest, notice of protest and any other
notice or formality, to the fullest extent permitted by applicable law.
6.5 Cost of Collection. If default is made in the payment of this
Note or should any other Event of Default occur, the Maker shall pay all of the
Payee's costs of collection, including reasonable attorneys' fees.
6.6 GOVERNING LAW. THIS NOTE SHALL BE DELIVERED TO
AND ACCEPTED BY PAYEE IN THE STATE OF CALIFORNIA, AND SHALL BE
-7-
Page 15 of 19
<PAGE>
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS
THEREOF.
6.7 Notices. Any notice given or required to be given hereunder
shall be sufficient if in writing, or sent by facsimile transmission and by same
day or overnight courier service (with proof of service), or hand-delivery or
certified or registered mail (return receipt requested and first-class postage
prepaid), addressed as follows:
If to the Maker: McGlen Micro, Inc.
3002 Dow Avenue, Suite 212
Tustin, CA 92780
Attn: George Lee, President
Fax: (714) 918-1951
Phone: (949) 851-8078
With a copy to: Boyd & Chang, LLP
19900 MacArthur Boulevard
Suite 660
Irvine, CA 92612
Attn: Patrick R. Boyd, Esquire
Fax: (949) 851-0159
Phone: (949) 851-9800
If to the Payee: Adrenalin Interactive, Inc.
5301 Beethoven Street
Suite 255
Los Angeles, CA 90066
Attn: Jay Smith, III, President
Fax: (310) 821-4251
Phone: (310) 821-7880
With a copy to: Sheppard, Mullin, Richter & Hampton, LLP
333 South Hope Street
48th Floor
Los Angeles, CA 90071
Attn: Jon W. Newby, Esquire
Fax: (213) 620-1398
Phone: (213) 620-1780
-8-
Page 16 of 19
<PAGE>
IN WITNESS WHEREOF, the Maker has caused this Note to be signed in
its name by its duly authorized officers.
DATED: July 23, 1999.
McGLEN MICRO, INC.,
a California corporation
By: _______________________________
George Lee
President
By: _______________________________
Mike Chen
Secretary
-9-
Page 17 of 19
<PAGE>
Exhibit 99.1
------------
FOR IMMEDIATE RELEASE
CONTACT: Stephen D. Axelrod, CFA
Nancy S. L. Block
Jay Smith, CEO Allen Salzberg (Media)
ADRENALIN INTERACTIVE INC. WOLFE AXELROD ASSOCIATES
(310) 821-7880, (310) 821-4251 fax (212) 370-4500, (212) 370-4505 fax
e-mail- [email protected] e-mail: [email protected]
http://www.adrenalin.com
ADRENALIN INTERACTIVE AGREES TO LOAN A PORTION OF ITS NEW FUNDING TO
MCGLEN PRIOR TO THEIR MERGER
Los Angeles, CA, July 26,1999 --- Adrenalin Interactive Inc. (NASDAQ: ADRN)
announced today that as part of its merger plans with McGlen Micro Inc., it has
loaned a portion of the new capital received in the recently announced $2
million financing. McGlen will use these funds for equipment and customer
service infrastructure to support the continued growth of the McGlen.com
E-commerce web site.
The funds for McGlen will be provided in the form of a secured, interest-bearing
loan until completion of the merger. Please refer to the Form 8-K to be filed
with the Securities and Exchange Commission for a description of the loan terms.
Jay Smith, President of Adrenalin, said, "We are very pleased that the $2
million financing process has been successful. The sharing of a portion of this
new capital with McGlen marks a dramatic step toward the completion of our
merger. We believe that the merger will be completed within the next three
months, and have extended the existing merger agreement appropriately."
George Lee, President of McGlen Micro, said, "This funding is a significant
milestone in the merger process with Adrenalin. Even without a significant
capital infusion, we have more than doubled our revenue from last year, to our
current annualized revenue rate of $30 million. We are looking forward to the
combination between the companies and the new access to capital, which will
support our continued growth."
------------------------------
Adrenalin Interactive Inc. develops and licenses Internet games for the World
Wide Web, entertainment titles for personal computers, and console video games
for Sony, Nintendo and Sega. Adrenalin also develops and licenses electronic
toys, particularly interactive, Web-powered toys that are refreshed from a PC
via the Internet. Adrenalin creates interactive television games for digital
set-top boxes and publishes or licenses certain PC games in 24 countries and 15
languages.
Page 18 of 19
<PAGE>
- More -
McGlen Micro Inc. is a private company that provides E-commerce services and
products for a wide range of computer related categories. McGlen Micro has a
unique consumer interface and software technology that is popular with
mass-market consumers. In March 1999, McGlen Micro acquired a similar company,
Access Micro Inc., dba AMT Component, Inc. The offices are located in Tustin,
CA.
This release contains certain forward-looking statements, which involve known
and unknown risks, uncertainties or other factors not under the Company's
control, which may cause actual results, performance or achievements of the
Company to be materially different from the results, performance or other
expectations implied by these forward-looking statements. These factors include,
but are not limited to, those detailed in the Company's periodic filings with
the Securities and Exchange Commission.
The statements set forth above with respect to the proposed merger, the benefits
thereof and the potential growth of the combined company are forward looking
statements within the meaning of that term in the Private Securities Litigation
Reform Act of 1995. As such, they are inherently uncertain and should not be
unduly relied upon. As to the consummation of the proposed acquisition,
uncertainties include the ability of the parties to negotiate definitive
agreements, completion of satisfactory due diligence by both parties, the
receipt of regulatory approvals, the receipt of approval by Adrenalin's
shareholders, the satisfaction of other conditions to closing and other
uncertainties normally associated with the consummation of business
acquisitions, As to the hoped for benefits of the acquisition and potential
future growth, uncertainties include the ability to successfully integrate the
companies' businesses, technologies and management, the availability of
sufficient capital to expand the businesses, customer acceptance on new
products, competition and other uncertainties associated with integrating
businesses after acquisitions and growth.
###
Page 19 of 19
