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As filed with the Securities and Exchange Commission on September 8, 2000
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Take-Two Interactive Software, Inc.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
575 Broadway
New York, New York 10012
Delaware (212) 334-6633 51-0350842
(State or other jurisdiction (Address, including zip code, (I.R.S. employer
of incorporation and telephone number, including identification number)
or organization area code, of registrant's principal
executive offices)
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Ryan A. Brant, Chairman
Take-Two Interactive Software, Inc.
575 Broadway
New York, New York 10012
(212) 334-6633
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Robert H. Cohen, Esq.
Morrison Cohen Singer & Weinstein LLP
750 Lexington Avenue
New York, New York 10022
Telephone: (212) 735-8680
Telecopier: (212) 735-8708
Approximate date of commencement of proposed sale to the public: As soon as
practicable 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, 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, check the following box and list the
Securities Act registration statement number of the earlier registration
statement for the same offering. / /
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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. / /
Calculation of Fee.
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Proposed Maximum Proposed Maximum Amount of
Title of Shares Amount to be Offering Aggregate Offering Registration Fee
to be Registered Registered Price Per Share Price
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Common Stock, $.01 2,016,747(2) $15.25(3) $30,755,391.75 $8,119.42
par value(1)
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(1) Represents shares to be sold by certain selling stockholders (including
451,747 shares issuable upon the exercise of warrants).
(2) Pursuant to Rule 416 of the Securities Act of 1933, there are also being
registered such additional shares as may be issued to the selling
stockholders because of future stock dividends, stock distributions,
stock splits or similar capital readjustments or, in the case of holders
of warrants, the operation of any anti-dilution provisions.
(3) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(c) of the Securities Act of 1933, as amended, the
registration fee has been calculated based upon (i) the exercise price
of warrants to purchase 451,747 shares and (ii) the average of the high
and low prices as reported by Nasdaq for the registrant's Common Stock
on September 6, 2000.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
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Take-Two Interactive Software, Inc.
This Prospectus relates to the resale of up to 2,016,747 shares of
common stock (including 451,747 shares issuable upon the exercise of warrants)
by certain stockholders.
The selling stockholders may sell these shares from time to time
through ordinary brokerage transactions in the over-the-counter markets, in
negotiated transactions or otherwise, at market prices prevailing at the time of
sale, at negotiated prices and in certain other ways, as described under "Plan
of Distribution" on page 18. We will not receive any of the proceeds from the
sale of these shares. If all of the warrants are exercised, we will receive
proceeds of $5,364,495.
Our common stock is traded on the Nasdaq National Market under the
symbol TTWO. On September 6, 2000, the closing sale price of our common stock as
reported by Nasdaq was $16.25.
Investing in our common stock is speculative and involves a high degree
of risk. See "Risk Factors" beginning on page 5.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is _________ __, 2000.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other financial and business information with the SEC. Our SEC filings are
available on the SEC's web site at http://www.sec.gov. You also may read and
copy any document we file at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information about their public reference rooms,
including copy charges.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede information in this prospectus and
in our other filings with the SEC. We incorporate by reference into this
prospectus our Annual Report on Form 10-K for the year ended October 31, 1999
and amendment thereto on Form 10-K/A, our Quarterly Reports on Form 10-Q for the
quarterly periods ended January 31, 2000 and April 30, 2000; our Current Report
on Form 8-K for the event dated March 14, 2000, Amendment No. 1 to our Current
Report on Form 8-K for the event dated May 27, 1998 and the description of our
Common Stock which is contained in our Registration Statement on Form 8-A, each
of which we already have filed with the SEC. We also incorporate by reference
into this prospectus any future filings we make with the SEC under Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until all of
the shares of common stock covered by this Prospectus are sold.
You may request a copy of these filings at no cost, by writing or
calling us at the following address:
Take-Two Interactive Software, Inc.
575 Broadway
New York, New York 10012
Attention: Ryan A. Brant
Telephone: (212) 334-6633
You should rely only on the information contained in, or incorporated by
reference into, this prospectus or any applicable prospectus supplement. We have
not authorized anyone to provide you with additional or different information.
You should not assume that the information in this prospectus, any prospectus
supplement, or any document incorporated by reference is accurate as of any date
other than the date of those documents.
You may also obtain from the SEC a copy of the Registration Statement
and exhibits that we filed with the SEC when we registered the shares of common
stock. The Registration Statement may contain additional information that may be
important to you.
FORWARD-LOOKING STATEMENTS
We make statements in this prospectus and the documents incorporated by
reference that are considered forward-looking statements under the federal
securities laws. Such forward-looking statements are based on the beliefs of our
management as well as assumptions made by and information currently available to
them. The words "anticipate," "believe," "may," "estimate," "expect," and
similar expressions, and variations of such terms or the negative of such terms,
are intended to identify such forward-looking statements.
All forward-looking statements are subject to certain risks,
uncertainties and assumptions. If one or more of these risks or uncertainties
materialize, or if underlying assumptions prove incorrect, our actual results,
performance or achievements could differ materially from those expressed in, or
implied by, any such forward-looking statements. Important factors that could
cause or contribute to such difference include those discussed under "Risk
Factors" in this Prospectus and in our Annual Report on Form 10-K. You should
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not place undue reliance on such forward-looking statements, which speak only as
of their dates. We do not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. You should carefully consider the information set forth
under "Risk Factors" in this prospectus.
ABOUT TAKE-TWO INTERACTIVE SOFTWARE, INC.
We are a leading worldwide developer, publisher and distributor of
interactive software games. Our software operates on multimedia personal
computers and video game console platforms manufactured by Sony, Nintendo and
Sega. We are one of the largest distributors of interactive software games in
the United States and one of the top ten publishers of interactive software
games in Europe.
Software is developed by our internal development studios, by developers
in which we have an ownership interest and by third-party developers on our
behalf. We publish our software under the Rockstar Games(TM), Talonsoft,
Gathering of Developers, Mission Studios and Take-Two labels. We have released
popular titles in a variety of genres, including Grand Theft Auto, GTA2,
Railroad Tycoon II, Monster Truck Madness and Thrasher: Skate & Destroy, and
intend to release new titles, including Oni and titles based on the highly
successful Duke Nukem franchise, Austin Powers movies and MTV properties. We
have several titles under development for the PlayStation(R) 2.
Jack of All Games, our subsidiary, distributes our software as well as
third-party software to more than 20,000 retail outlets in the United States.
Our customers include WalMart, Toys R Us, Electronics Boutique, Babbage's, Best
Buy and Ames Department Stores, as well as leading national and regional drug
store, supermarket and discount store chains and specialty retailers.
We also have publishing and distribution operations in the United
Kingdom, France, Germany, Norway, Sweden, Denmark, Italy, Australia and Canada.
We have employed the Jack of All Games trade name in Europe, and have greatly
expanded our international presence by making several acquisitions. Our Joytech
subsidiary is a leading manufacturer of video game hardware accessories in
Europe.
We were incorporated in the state of Delaware in September 1993. Our
principal executive offices are located at 575 Broadway, New York, New York
10012, and our telephone number is (212) 334-6633.
RECENT DEVELOPMENTS
In March 2000, our wholly-owned subsidiary Broadband Studios, Inc.
acquired all of the outstanding capital stock of Toga Holdings B.V., the parent
company of Pixel Broadband Studios, Ltd., an Israeli corporation, for $4.45
million in cash and 2,561,245 shares of our common stock. Pixel is a leading
provider of multiplayer gaming technologies. Broadband Studios was formed to
develop and deliver interactive gaming technologies and content over the
Internet and other digital broadband networks.
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In April 2000, we acquired all of the outstanding capital stock of
Gathering of Developers, Inc. for 1,060,019 shares of common stock.
In June 2000, we acquired all right, title and interest to the
best-selling Myth franchise of PC strategy games and the highly anticipated
upcoming PC and PlayStation(R) 2 game, Oni from Bungie Software. In connection
with the transaction, we sold our 19.9% equity interest in Bungie Software to
Microsoft and obtained a two product royalty free license to Bungie's Halo
technology.
In July 2000, we acquired all of the outstanding capital stock of PopTop
Software, Inc. for 559,100 shares of common stock.
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RISK FACTORS
The shares offered hereby are speculative and involve a high
degree of risk. Each prospective investor should carefully consider the
following risk factors before making an investment decision.
Many of our titles have short lifecycles and fail to generate significant
revenues.
The market for our interactive entertainment software is characterized
by short product lifecycles and frequent introduction of new products. Many
software titles do not achieve sustained market acceptance or do not generate a
sufficient level of sales to offset the costs associated with product
development. A significant percentage of the sales of new titles generally
occurs within the first three months following their release. Therefore, our
continued profitability depends upon our ability to develop and sell new,
commercially successful titles and to replace revenues from titles in the later
stages of their lifecycles. Any competitive, financial, technological or other
factor which delays or impairs our ability to introduce and sell our software
could adversely affect our future operating results.
A significant portion of our revenues are derived from a limited number of
titles.
For the year ended October 31, 1999, ten titles accounted for
approximately 33.5% of our revenues, with Grand Theft Auto products accounting
for 18.7% of our revenues. For the six-month period ended April 30, 2000, ten
titles accounted for approximately 22.3% of our revenues. Our future titles may
not be commercially viable. We also may not be able to release new titles within
scheduled release times or at all. If we fail to continue to develop and sell
new, commercially successful titles, our revenues and profits may decrease
substantially.
Our business is dependent on licensing and publishing arrangements with third
parties.
Our success depends on our ability to identify and exploit new titles on
a timely basis. We have entered into agreements with third parties to acquire
the rights to publish and distribute interactive entertainment software. These
agreements typically require us to make advance payments, pay royalties and
satisfy other conditions. Our advance payments may not be sufficient to permit
developers to develop new software successfully. In addition, software
development costs, promotion and marketing expenses and royalties payable to
software developers have increased significantly in recent years and reduce the
potential revenues derived from sales of our software. Future sales of our
titles may not be sufficient to recover advances to software developers, and we
may not have adequate financial and other resources to satisfy our contractual
commitments. If we fail to satisfy our obligations under these license
agreements, the agreements may be terminated or modified in ways that may be
burdensome to us.
Our profitability depends upon our ability to continue to license
popular properties on commercially feasible terms. Numerous companies compete
intensely for properties, and we may not be able to license popular properties
on favorable terms or at all in the future.
We continually need to develop new interactive entertainment software for
various operating systems.
We depend on third-party software developers and our internal
development studios to develop new interactive entertainment software within
anticipated release schedules and cost projections. Most of our titles are
externally developed. If developers experience financial difficulties,
additional costs or unanticipated development delays, we will not be able to
release titles according to our schedule and may incur losses.
The development of new interactive entertainment software is lengthy,
expensive and uncertain. Considerable time, effort and resources are required to
complete development of our proposed titles. We have in the past and may in the
future experience delays in introducing new titles. Delays, expenses, technical
problems or difficulties could force the abandonment of or material changes in
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the development and commercialization of our proposed titles. In addition, the
costs associated with developing titles for use on new or future platforms may
increase our development expenses.
The software incorporated into our titles may contain defects or errors
which do not become apparent until after commercial introduction. Remedying such
errors may delay our plans, cause us to incur additional costs and adversely
affect our operations.
We are subject to various distribution risks.
Our distribution business accounts for a substantial portion of our
revenues. Our distribution operations require us to:
o maintain our operating margins;
o secure adequate supplies of currently popular software and
hardware on a timely and competitive basis;
o continually turn our inventories; and
o maintain effective inventory and cost controls.
We are dependent on third-party software and hardware manufacturers,
developers, distributors and dealers, including our competitors, to provide
adequate inventories of popular interactive entertainment software to our retail
customers when needed and on favorable pricing terms. We generally do not
maintain agreements with suppliers. Suppliers may sell their software directly
to our retail customers, rather than through us, on more favorable terms than
those provided to us. We have historically purchased a significant portion of
our titles from a limited number of suppliers. If suppliers do not provide us
with competitive titles on favorable terms without delays, we will be unable to
deliver titles on competitive terms to our retail customers when they require
them.
We may fail to anticipate changing consumer preferences.
Our business is speculative and is subject to all of the risks generally
associated with the interactive entertainment software industry, which has been
cyclical in nature and has been characterized by periods of significant growth
followed by rapid declines. Our future operating results will depend on numerous
factors beyond our control, including:
o the popularity, price and timing of new interactive
entertainment software being released and distributed by us and
our competitors;
o international, national and regional economic conditions,
particularly economic conditions adversely affecting
discretionary consumer spending;
o changes in consumer demographics;
o the availability of other forms of entertainment; and
o critical reviews and public tastes and preferences, all of which
change rapidly and cannot be predicted.
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In order to plan for acquisition and promotional activities, we must
anticipate and respond to rapid changes in consumer tastes and preferences. A
decline in the popularity of interactive entertainment software or particular
platforms could cause sales of our titles to decline dramatically. The period of
time necessary to develop new game titles, obtain approvals of manufacturers and
produce CD-ROMs or game cartridges is unpredictable. During this period,
consumer appeal of a particular title may decrease, causing projected sales to
decline.
Rapidly changing technology and potential obsolescence of software and platforms
could harm our operating results.
The interactive entertainment software market and the PC and video game
industries in general are associated with rapidly changing technology, which
leads to software and platform obsolescence and significant price erosion of
interactive entertainment software. Our titles have been developed primarily for
multimedia PCs and video game consoles, including Nintendo 64 and Sony's
PlayStation game console. Sony recently introduced the PlayStation(R) 2 in Japan
and plans to introduce it in the United States in October 2000. Sega has
introduced its Dreamcast system and each of Microsoft and Nintendo has stated
that it is in the process of developing a new video game platform. If the sales
rates of multimedia PCs or video game consoles level off or decline as a result
of the anticipated release of new platforms or other technological changes,
sales of our titles developed for these platforms may decrease.
We devote development and marketing resources on products designed for
new video game systems that have not yet achieved large installed bases. We
intend to release a variety of products for the PlayStation 2. If that platform
does not achieve wide acceptance by consumers, we will have spent a substantial
amount of our resources for this platform which would have a material adverse
effect on our business, operating results and financial condition.
We need to anticipate technological changes and continually adapt our
new titles to emerging platforms to remain competitive in terms of price and
performance. Our success depends upon our ability and the ability of third-party
developers to adapt software to operate on and to be compatible with the
products of original equipment manufacturers and to function on various hardware
platforms and operating systems. If we design titles to operate on new
platforms, we may be required to make substantial development investments well
in advance of platform introductions, and we will be subject to the risks that
any new platform may not achieve initial or continued market acceptance. In
addition, our software designed for PCs must maintain compatibility with
computers, their operating software and their hardware accessories. If we are
unable to develop or adapt titles to operate on and be compatible with future
platforms that achieve market acceptance or to maintain compatibility with new
platforms as needed, we will be unable to offer titles that may appeal to
consumers in the future.
The introduction of new platforms and technologies can render existing
interactive entertainment software obsolete and unmarketable. We expect that as
more advanced platforms are introduced, consumer demand for software for older
platforms will decline. As a result, our titles developed for such platforms may
not generate sufficient sales to make such titles profitable. Obsolescence of
software or platforms could leave us with increased inventories of unsold titles
and limited amounts of new titles to sell to consumers.
A number of software publishers who compete with us have developed or
are currently developing software for use by consumers over the Internet. Future
increases in the availability of such software or technological advances in such
software or the Internet could result in a decline in platform-based software
and impact our sales. Direct sales of software by major manufacturers over the
Internet would adversely affect our distribution business.
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Returns of our titles may adversely affect our operating results.
Our arrangements with retailers for published titles require us to
accept returns for stock balancing, markdowns or defects. We establish a reserve
for future returns of published titles at the time of sales, based primarily on
these return policies and historical return rates, and we recognize revenues net
of returns. We have historically experienced a return rate of approximately 10%
of gross publishing revenues.
Our distribution arrangements with retailers generally do not give them
the right to return titles to us or to cancel firm orders, although we do accept
returns for stock balancing, markdowns and defects. We sometimes negotiate
accommodations to retailers, including price discounts, credits and returns,
when demand for specific titles falls below expectations. Historically, less
than 1% of distribution revenues represent write-offs for returns.
Our sales returns and allowances for the years ended October 31, 1998
and 1999 and the six months ended April 30, 2000 were $13,672,432, $25,146,691
and $15,372,744, respectively. If return rates significantly exceed our
estimates, our operating results will be materially adversely affected.
Our quarterly operating results may vary significantly.
We have experienced and may continue to experience wide fluctuations in
quarterly operating results as a result of:
o delays in the introduction of new titles;
o the size and timing of product and corporate acquisitions;
o variations in sales of titles designed to operate on particular
platforms;
o development and promotional expenses relating to the
introduction of new titles, sequels or enhancements of existing
titles;
o projected and actual changes in platforms;
o the timing and success of title introductions by our
competitors;
o product returns;
o the accuracy of retailers' forecasts of consumer demand; and
o the timing of orders from major customers.
Sales of our titles are seasonal, with peak shipments typically
occurring in the fourth calendar quarter (our fourth and first fiscal quarters)
as a result of increased demand for interactive entertainment software during
the year-end holiday season.
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The interactive entertainment software industry is highly competitive.
We compete for both licenses to properties and the sale of interactive
entertainment software with Sony, Nintendo and Sega, each of which is the
largest developer and marketer of software for its platforms. Sony and Nintendo
currently dominate the industry and have the financial resources to withstand
significant price competition and to implement extensive advertising campaigns,
particularly for prime-time television. These companies may also increase their
own software development efforts.
In addition, we compete with domestic public and private companies,
international companies, large software companies and media companies. Many of
our competitors have far greater financial, technical, personnel and other
resources than we do, and many are able to carry larger inventories, adopt more
aggressive pricing policies and make higher offers to licensors and developers
for commercially desirable properties than we can. Our titles also compete with
other forms of entertainment such as motion pictures, television and audio and
video cassettes featuring similar themes, on-line computer programs and forms of
entertainment which may be less expensive or provide other advantages to
consumers.
Retailers typically have limited shelf space and promotional resources,
and competition is intense among an increasing number of newly introduced
interactive entertainment software titles for adequate levels of shelf space and
promotional support. Competition for retail shelf space is expected to increase,
which may require us to increase our marketing expenditures just to maintain
current levels of sales of our titles. Competitors with more extensive lines and
popular titles frequently have greater bargaining power with retailers.
Accordingly, we may not be able to achieve the levels of support and shelf space
that such competitors receive. Similarly, as competition for popular properties
increases, our cost of acquiring licenses for such properties is likely to
increase, possibly resulting in reduced margins. Prolonged price competition,
increased licensing costs or reduced operating margins would cause our profits
to decrease significantly.
We depend on console manufacturers for supplies of our games.
We depend on non-exclusive licenses with Sony, Nintendo and Sega both
for the right to publish titles for their platforms and for the manufacture of
our software designed for use on their platforms. Our licenses for the
PlayStation, Nintendo 64, Nintendo GameBoy and Sega Dreamcast platforms require
that we obtain approval for the publication of new titles on a title-by-title
basis. As a result, the number of titles we are able to publish for these
platforms may be limited. If any of these licenses were terminated, we would
lack alternative sources for the manufacture of titles for these platforms and
would be unable to develop and publish software developed for these platforms.
Each of Sony, Nintendo and Sega is the sole manufacturer of the titles
we publish under license from such manufacturer. Each platform license provides
that the manufacturer may raise prices for the titles at any time and grants the
manufacturer substantial control over the release of new titles. The relatively
long manufacturing cycle for cartridge-based titles for the Nintendo platform
(from 30 to 45 days) requires us to accurately forecast retailer and consumer
demand for our titles far in advance of sales. Nintendo cartridges are also more
expensive to manufacture than CD-ROMs, resulting in greater inventory risks for
those titles. Each of these manufacturers also publishes software for its own
platforms and manufactures titles for all of its other licensees and may choose
to give priority to its own titles or those of other publishers if it has
insufficient manufacturing capacity or if there is increased demand.
These manufacturers may not have sufficient production capacity to
satisfy our scheduling requirements during any period of sustained demand. If
manufacturers do not supply us with finished titles on favorable terms without
delays, our operations could be materially interrupted, and our operating
results could be adversely affected.
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We may not be able to protect our proprietary rights or avoid claims that we
infringe on the proprietary rights of others.
We develop proprietary software and technologies and have obtained the
rights to publish and distribute software developed by third parties. We attempt
to protect our software and production techniques under copyright, trademark and
trade secret laws as well as through contractual restrictions on disclosure,
copying and distribution. We do not hold any patents or registered copyrights.
Interactive entertainment software is susceptible to unauthorized
copying. Unauthorized third parties may be able to copy or to reverse engineer
our software to obtain and use programming or production techniques that we
regard as proprietary. In addition, our competitors could independently develop
technologies substantially equivalent or superior to our technologies.
As the amount of interactive entertainment software in the market
increases and the functionality of this software further overlaps, we believe
that interactive entertainment software will increasingly become the subject of
claims that such software infringes the copyrights or patents of others. From
time to time, we receive notices from third parties alleging infringement of
their proprietary rights. Although we believe that our software and technologies
and the software and technologies of third-party developers and publishers with
whom we have contractual relations do not and will not infringe or violate
proprietary rights of others, it is possible that infringement of proprietary
rights of others may occur. Any claims of infringement, with or without merit,
could be time-consuming, costly and difficult to defend.
Our rapid expansion and acquisitions may strain our operations.
We have expanded through internal growth and acquisitions, which have
placed and may continue to place a significant strain on our management,
administrative, operational, financial and other resources. We have released a
significant number of titles on new platforms, expanded our publishing and
distribution operations, increased our advances to developers and manufacturing
expenditures, enlarged our work force and expanded our presence in international
markets. To successfully manage this growth, we must continue to implement and
improve our operating systems as well as hire, train and manage a substantial
and increasing number of management, technical, marketing, administrative and
other personnel. We may be unable to effectively manage rapidly expanded
operations which are geographically dispersed.
We have acquired rights to various properties and businesses, and we
intend to continue to pursue opportunities by making selective acquisitions
consistent with our business strategy. We may be unable to successfully
integrate any new personnel, property or business into our operations. If we are
unable to successfully integrate future personnel, properties or businesses into
our operations, we may incur significant charges.
Our publishing and distribution activities require significant amounts
of capital. We may seek to obtain additional debt or equity financing to fund
the cost of continuing expansion. The issuance of equity securities would result
in dilution to the interests of our stockholders.
A limited number of customers may account for a significant portion of our
sales.
Sales to our five largest customers accounted for approximately 22.4%,
24.5% and 23.1% of our revenues for the years ended October 31, 1998 and 1999
and the six months ended April 30, 2000. The loss of our relationships with
principal customers or a decline in sales to principal customers could harm our
operating results.
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We have significant outstanding indebtedness and have granted security interests
to debtholders.
We have incurred substantial indebtedness in order to finance our
expanded operations. As of April 30, 2000, $50,000,000 was outstanding under a
line of credit agreement between us and a group of lenders led by Bank of
America, N.A., as agent. This line of credit provides for borrowings of up to
$75,000,000. Borrowings under the line of credit with Bank of America are
collateralized by our accounts receivable, inventory, equipment, general
intangibles, securities and other personal property, including the capital stock
of our domestic subsidiaries. The loan agreement contains certain financial
covenants and limits or prohibits us, subject to certain exceptions, from
declaring or paying cash dividends, merging or consolidating with another
corporation, selling assets (other than in the ordinary course of business),
creating liens and incurring additional indebtedness. If we default on our
obligations, the banks could elect to declare our indebtedness to be due and
payable and foreclose on our assets. Our UK subsidiary also has outstanding
indebtedness of approximately $18,000,000 at April 30, 2000 with Barclays Bank.
In addition, in July 2000, we incurred an additional $15,000,000 of indebtedness
under a subordinated loan agreement.
We are dependent upon our key executives and personnel.
Our success is largely dependent on the personal efforts of certain key
personnel. The loss of the services of one or more of these key employees could
adversely affect our business and prospects. Our success is also dependent upon
our ability to hire and retain additional qualified operating, marketing,
technical and financial personnel. Competition for qualified personnel in the
computer software industry is intense, and we may have difficulty hiring or
retaining necessary personnel in the future. If we fail to hire and retain
necessary personnel as needed, our business will be significantly impaired.
Rating systems for interactive entertainment software, potential legislation and
consumer opposition could inhibit sales of our products.
The home video game industry requires interactive entertainment
software publishers to provide consumers with information relating to graphic
violence or sexually explicit material contained in software titles. Certain
countries have also established similar rating systems as prerequisites for
sales of interactive entertainment software in such countries. We believe that
we comply with such rating systems and display the ratings received for our
titles. Our software titles generally receive a rating of "G" (all ages) or "T"
(age 13 and over), although certain of our titles receive a rating of "M" (age
18 and over), which may limit the potential markets for these titles.
Several proposals have been made for federal legislation to regulate
the interactive entertainment software, motion picture and recording industries,
including a proposal to adopt a common rating system for interactive
entertainment software, television and music containing violence and sexually
explicit material. Consumer advocacy groups have also opposed sales of
interactive entertainment software containing graphic violence and sexually
explicit material by pressing for legislation in these areas and by engaging in
public demonstrations and media campaigns. If any groups were to target our
titles, we might be required to significantly change or discontinue a particular
title. In addition, certain retailers, such as WalMart, Kmart, Sears and Target
Stores, have declined to sell interactive entertainment software containing
graphic violence or sexually explicit material, which also limits the potential
markets for certain of our games.
We are subject to credit and collection risks.
Our sales are typically made on credit, with terms that vary depending
upon the customer and the demand for the particular title being sold. We do not
hold any collateral to secure payment by our customers. As a result, we are
subject to credit risks, particularly in the event that any of our receivables
represent sales to a limited number of retailers or are concentrated in foreign
markets. If we are unable to collect on accounts receivable as they become due
-11-
<PAGE>
and such accounts are not covered by insurance, it could adversely affect our
financial condition. Our accounts receivable, less an allowance for doubtful
accounts and product returns, at April 30, 2000 were $82,628,593.
We are subject to risks and uncertainties of international trade.
Sales in international markets, primarily in the United Kingdom and
other countries in Europe and the Pacific Rim, have accounted for an increasing
portion of our revenues. For the years ended October 31, 1998 and 1999 and the
six months ended April 30, 2000, sales in international markets accounted for
approximately 21.6%, 34.6% and 34.5% of our revenues. We are subject to risks
inherent in foreign trade, including:
o increased credit risks;
o tariffs and duties;
o fluctuations in foreign currency exchange rates;
o shipping delays; and
o international political, regulatory and economic developments,
all of which can have a significant impact on our operating
results.
Sales in France and Germany are made in local currencies. We do not
engage in foreign currency hedging transactions.
Additional Risk Factors Relating to our Broadband Operations:
Our lack of relevant operating history in providing broadband technologies and
content makes it difficult to evaluate and forecast this business.
We have no relevant operating history in providing interactive
multiplayer gaming technologies and content over broadband networks. We expect
that our revenues for the foreseeable future will be derived from sales of our
packaged software through traditional retail channels. As a result, forecasting
operating results for our broadband technologies and content is difficult. If
our broadband technologies and content do not achieve or sustain wide market
acceptance, our business could be materially adversely affected.
The implementation of our broadband business plans may not be successful.
Our broadband operations and prospects will be largely dependent upon
our ability to establish and maintain satisfactory relationships with broadband
service providers and successfully develop and commercialize our interactive
multiplayer content and technologies. We have limited experience in developing
and commercializing broadband content and enabling technologies and there is no
information available concerning our technology's potential performance. We may
not successfully implement our business plan and unanticipated expenses,
problems and technical difficulties may result in material delays in its
implementation.
-12-
<PAGE>
We have no experience with broadband content applications and may not be able to
operate this business effectively.
Offering games for broadband applications is a substantial departure
from our traditional business of selling packaged software games. The profit
potential of our business model is unproven. We anticipate employing various
pricing models, including subscription and "pay-for-play" fees. We have no
experience with developing optimal pricing strategies for our content and no
experience in "pay-for-play" pricing or in securing advertising revenue for
broadband services, and we have not conducted any product or marketing tests or
market feasibility studies. Similarly, we have no experience in predicting usage
patterns for our games. Because of our inexperience in this area, we may not be
effective in achieving success that may otherwise be attainable from offering
our games over broadband networks.
We expect to incur significant expenses in our Broadband Studios subsidiary
which may result in losses.
We expect to incur significant expenses in our Broadband Studios
subsidiary, which may result in losses as we develop our broadband business. We
cannot be certain that we will produce sufficient revenues from the sale of
packaged software products to support the significant costs associated with
ongoing broadband content and technology development. Any losses could adversely
affect our financial condition and future operating results.
Our technology is unproven and we are subject to risks associated with
developing our broadband platform and products.
Although we have completed development of our multiplayer gaming
platform and other technologies, which we believe perform the principal
functions for which they have been designed, our platform has not yet been
commercialized by potential broadband service providers. The ability of our
platform to connect and manage a substantial number of subscribers and
interactive devices at high transmission speeds is unknown. We face
uncertainties related to our platform's ability to be scaled to potentially
significant subscriber levels while maintaining superior performance. As a
result, there can be no assurance that upon commercial introduction, our
platform will satisfactorily perform all of the functions for which it has been
designed, that it will be reliable or scale in extensive broadband applications,
that our platform or products will satisfy current price or performance
objectives or that unanticipated technical or other problems will not occur that
would result in increased costs or material delays in product development or
commercialization. Technologies as complex as those incorporated into our
platform may contain errors that only become apparent subsequent to widespread
commercial use. Remedying such errors could delay our plans and cause us to
incur additional costs. In addition, our success will depend upon our ability to
adapt our platform and products to operate on and to be compatible with the
operating systems of third-party broadband networks and successfully develop and
introduce interactive gaming content with multiplayer capabilities on a timely
and cost-effective basis. We may not be able to successfully adapt our
technologies to operate on and be compatible with the products and systems of
third-party broadband network operators or successfully introduce gaming content
on a timely basis or at all.
-13-
<PAGE>
We will require significant capital to fund product development and other needs.
Because our broadband business is at an early stage, we must continue to
make significant investments in the development of our technologies and products
and hire new personnel rapidly in anticipation of potential growth in such
business. We will require substantial funds to continue to fund our
infrastructure investment, product and technology development, marketing, sales
and other working capital requirements. We may seek to obtain equity financing
for Broadband Studios in private and public markets. Funds may not be available
at the time or times needed, or on terms acceptable to us. If adequate funds are
not available, or are not available on acceptable terms, we may not be able to
continue to develop new products and services or otherwise respond to
competitive pressures. Such inability could have a material adverse effect on
our business, operating results and financial condition.
We will rely on broadband service operators to provide our content.
We plan to obtain access to subscribers through agreements with
broadband service providers. We do not currently have any agreements with any
service providers. The process of identifying and establishing relationships
with service providers, entering into contractual arrangements and adapting our
technologies to operate on such broadband networks is lengthy and uncertain. We
may not be successful in entering into any contracts with third parties. If we
are able to establish satisfactory relationships with service providers, we will
rely on our partners in many areas, including marketing to potential subscribers
and subscriber billing and collection. If we fail to establish and maintain
these relationships or if our partners do not perform to our expectations, our
ability to provide our content to potential subscribers and generate revenues
will be materially adversely affected. Our ability to derive revenues from our
content also will be dependent upon the ability of third-party service providers
to support a highly complex network infrastructure and avoid damage from fires,
earthquakes, hurricanes, floods, power losses, telecommunications failures,
unauthorized access, computer viruses and other disruptive problems, and
continually upgrade their network capacity to accommodate increasing numbers of
subscribers and data.
We face significant competition that may limit our ability to gain market share
and harm our financial performance.
The emerging markets for consumer broadband content are extremely
competitive. We expect that competition will intensify in the future. Console
and PC game publishers including Microsoft, Sony, Nintendo, Sega, Hasbro,
Mattel, Electronic Arts, Acclaim, GT Interactive, Interplay and Eidos are each
developing individual online games and games with online components accessed
through PCs. Sony (including the online divisions of Sony Entertainment) has a
broad collection of online game offerings and Electronic Arts has established an
online gaming division. Each of these competitors may compete with us for
subscription sales.
We will also compete with general purpose consumer web sites such as
Yahoo!, Excite, Lycos, and Microsoft Network. Many of these Internet portals
offer gaming sites. Although most of the game areas of these portals have
attained modest reach, their key placement on powerful portals makes them
potentially significant competitors for gaming subscriptions as well.
Our competitors have substantially greater financial, technical and
marketing resources, established subscriber bases, longer operating histories,
greater name recognition and established relationships with advertisers and
content and applications providers than we. We expect that these companies will
compete with us for strategic relationships with potential broadband service
providers. Furthermore, many of our competitors are offering, or may soon offer,
technologies that will compete with some or all of our technologies. We may not
compete successfully against current or future competitors and the competitive
pressures we face may materially adversely affect our business, operating
results or financial condition.
-14-
<PAGE>
We will depend on the continued growth of broadband access technologies and
consumer acceptance of high-quality, high-speed broadband content and
applications.
Our broadband business is unlikely to be successful if the use of
broadband access and applications does not continue to increase. Broadband
service is an emerging business with a short operating history. The ultimate
demand for broadband service is subject to a high degree of uncertainty. A key
component of our strategy is to provide compelling interactive content. Our
success in providing and aggregating such content and applications, and our
success in charging a premium for our service, is dependent on the ability of
content and applications providers to create and support high-quality,
high-speed broadband applications and our ability to aggregate content and
applications offerings in a manner that users find compelling. We may not be
successful in these endeavors. The market for high-quality broadband content and
applications is at an early stage of development and is rapidly evolving, and
there is significant competition among network operators for aggregating such
content and applications. If the market fails to develop as expected or
competition increases, or our content and applications offerings do not achieve
or sustain market acceptance, our business, operating results and financial
condition will be materially adversely affected.
We cannot predict the acceptance and maintenance of the Rockstar Games brand.
The continued development of the Rockstar Games brand is important to
our future success. We believe that we must establish and maintain the Rockstar
Games brand and attract and expand a significant consumer and broadband
subscriber base. The Rockstar Games brand could be eroded by failure to develop
and maintain content that appeals to the evolving preferences of our audience.
The inability to establish or maintain the Rockstar Games brand successfully, or
the incurrence of excessive expense in an attempt to promote and maintain our
brand, could materially and adversely affect our business, operating results and
financial condition.
Our success depends on the successful development of new technologies, services
and features.
The markets for our enabling technologies and content are characterized by rapid
technological developments, frequent new product and service introductions and
evolving industry standards. The emerging nature of these products and services
and their rapid evolution will require that we continually improve the
performance, features and reliability of our content and technologies,
particularly in response to offerings of new products or services by our
competitors. Technological change and evolving industry standards may render our
technologies and products noncompetitive or obsolete.
Risk Factors Relating to this Offering:
The market price of our common stock may be volatile.
The market price of the common stock may be highly volatile.
Disclosures of our operating results, announcements of various events by us or
our competitors and the development and marketing of new titles affecting the
interactive entertainment software industry may cause the market price of the
common stock to change significantly over short periods of time. Sales of shares
under this prospectus may have a depressive effect on the market price of our
common stock.
-15-
<PAGE>
Future sales of shares of our common stock could affect the market price of our
common stock and our ability to raise additional capital.
We have previously issued a substantial number of shares of common
stock, which are eligible for resale under Rule 144 of the Securities Act, and
may become freely tradeable. We have also granted registration rights with
respect to a substantial number of shares of common stock, including shares
issuable upon the exercise of options and warrants. If holders of registration
rights choose to exercise such rights and sell shares of common stock in the
public market, or if holders of currently restricted shares choose to sell such
shares in the public market under Rule 144, the prevailing market price for the
common stock may decline. Future public sales of shares of common stock may
adversely affect the market price of our common stock or our future ability to
raise capital by offering equity securities.
-16-
<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the selling
stockholders. If all of the warrants are exercised, we will receive gross
proceeds of $5,364,495. We have agreed to pay the expenses of this offering.
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
selling stockholders. Except as set forth below, none of the selling
stockholders has ever held any position or office with us or had any other
material relationship with us.
<TABLE>
<CAPTION>
Percentage of
Shares Shares Shares
Beneficially Owned Shares to be Sold Beneficially Owned Beneficially Owned
Selling Stockholder Prior to Offering in the Offering After Offering After Offering
------------------- ----------------- --------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Finova Mezzanine 451,747 451,747 -- --
Capital, Inc.
Philip M. Steinmeyer 559,100 150,000 409,000 1.4%
Clipperbay & Co. 900,000 900,000 -- --
CTIL-SLIF American Fund 160,000 160,000 -- --
Vidalos Nominees 90,000 90,000 -- --
Hare & Co. 4,100 4,100 -- --
Hare & Co. 130,200 130,200 -- --
Gerlach and Co. 15,500 15,500 -- --
Pulsar Technology Master 5,200 5,200 -- --
Fund
Morgan Stanley & Co. 50,000 50,000 -- --
Gulf International Bank 50,000 50,000 -- --
(UK) Limited
Sudbrooke Asset 10,000 10,000 -- --
Management
</TABLE>
This table assumes the sale of all of the shares offered and warrants to
purchase 451,747 shares of common stock held by Finova Mezzanine Capital, Inc.
are exercised at a price of $11.875 per share.
-17-
<PAGE>
PLAN OF DISTRIBUTION
We are registering shares of our common stock with this prospectus on
behalf of the selling stockholders. All references to selling stockholders in
this prospectus include donees and pledgees selling shares of common stock
received from a named selling stockholder after the date of this prospectus. We
have agreed to pay all expenses in connection with the registration of the
shares of common stock for sale by the selling stockholders. The selling
stockholders will bear all brokerage commissions and similar selling expenses,
if any, attributable to sales of their shares. Sales of shares may be effected
by the selling stockholders from time to time in one or more types of
transactions, any of which may involve crosses and block transactions, made on
Nasdaq, in the over-the-counter market, on a national securities exchange, in
privately negotiated transactions or otherwise or in a combination of such
transactions at prices and at terms and market prices prevailing at the time of
sale or at privately negotiated prices. These transactions may or may not
involve brokers or dealers.
Without limiting the generality of the foregoing, the shares may be sold
in one or more of the following types of transactions: (a) a block trade in
which the broker-dealer so engaged will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus; (c) an exchange
distribution in accordance with the rules of such exchange; (d) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
and (e) face-to-face transactions between sellers and purchasers without a
broker-dealer. In effecting sales, brokers or dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate in the
resale. In addition, any shares covered by this prospectus which qualify for
sale pursuant to Section 4(1) of the Securities Act of 1933 or Rule 144
promulgated thereunder may be sold under such provisions rather than pursuant to
this prospectus.
In connection with distributions of the shares or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the shares registered in this prospectus in the course of hedging the positions
they assume with selling stockholders. The selling stockholders may also sell
shares short and deliver the shares to close out such short positions. The
selling stockholders may also enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the shares
registered in this prospectus, which the broker-dealer may resell pursuant to
this prospectus. The selling stockholders may also pledge the shares registered
in this prospectus to a broker or dealer, and, upon a default, the broker or
dealer may effect sales of the pledged shares pursuant to this prospectus.
Brokers or dealers may receive compensation in the form of commissions,
discounts or concessions from selling stockholders in amounts to be negotiated
in connection with sales. Such brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933. In this case,
any commissions, discounts or concessions received by broker-dealers and any
profit on the resale of the shares sold by them may be deemed to be underwriting
discounts or commissions under the Securities Act of 1933. Compensation to be
received by broker-dealers and retained by the selling stockholders in excess of
usual and customary commissions, will, to the extent required, be set forth in a
supplement to this prospectus. Any dealer or broker participating in any
distribution of the shares may be required to deliver a copy of this prospectus,
including any supplements, to any person who purchases any of the shares from or
through such dealer or broker.
During such time as they may be engaged in a distribution of the shares
included in this prospectus, the selling stockholders are required to comply
with Regulation M promulgated under the Securities Exchange Act of 1934. With
certain exceptions, Regulation M precludes any selling stockholder, any
affiliated purchasers and any broker-dealer or other person who participates in
such distribution from bidding for or purchasing, or attempting to induce any
person to bid for or purchase any security which is the subject of the
distribution until the entire distribution is complete. Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security. All of the
foregoing may affect the marketability of our common stock.
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<PAGE>
It is possible that a significant number of shares may be sold under
this prospectus. Accordingly, these sales or the possibility of such sales may
have a depressive effect on the market price of our common stock.
INDEMNIFICATION
The General Corporation Law of the State of Delaware contains provisions
permitting our directors and officers to be indemnified against judgments,
fines, amounts paid in settlement and reasonable expenses, including attorneys'
fees, as the result of an action or proceeding in which they may be involved by
reason of having been a director or officer. Our Certificate of Incorporation
includes a provision that limits the personal liability of our directors to us
or our stockholders for monetary damages arising from a breach of their
fiduciary duties as directors to the fullest extent now or hereafter permitted
by the Delaware General Corporation Law. This provision does not prevent us or
our stockholders from seeking equitable remedies, such as injunctive relief or
recision. If equitable remedies are found not to be available to stockholders in
any particular case, stockholders may not have any effective remedy against
actions taken by directors that constitute negligence or gross negligence.
Our Certificate of Incorporation provides that we shall indemnify our
officers and directors to the maximum extent permitted from time to time under
the Delaware General Corporation Law and requires us to advance expenses to any
director or officer to the extent that such indemnification and advancement of
expenses is permitted under such law, as it may from time to time be in effect.
In addition, our By-laws require us to indemnify, to the fullest extent
permitted by law, any director, officer, employee or agent for acts which such
person reasonably believes are not in violation of our corporate purposes as set
forth in our Certificate of Incorporation. At present, the Delaware General
Corporation Law provides that, in order to be entitled to indemnification, an
individual must have acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to our best interests.
Insofar as indemnification against liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and persons
controlling us pursuant to the foregoing provisions or otherwise, we have 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.
LEGAL MATTERS
Morrison Cohen Singer & Weinstein LLP of New York, New York will pass upon
the validity of the shares of common stock being offered with this prospectus.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K for the year ended October 31, 1999 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
accounting and auditing.
The financial statements of Jack of All Games, Inc. as of and for the year
ended December 31, 1997 have been included in reliance upon the reports of
Aronowitz, Chaiken & Hardesty, LLP, given upon the authority of that firm as
experts in accounting and auditing.
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<PAGE>
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We have not authorized any dealer, salesperson or any other person to give
any information or to make any representations other than those contained in
this prospectus. You must not rely on unauthorized information. This prospectus
does not offer to sell or solicit an offer to buy securities in any jurisdiction
in which it is unlawful. Neither the delivery of this prospectus nor any sale
made under this prospectus shall imply that the information in this prospectus
is correct as of any time after the date of this prospectus.
-----------------
TABLE OF CONTENTS
Page
----
Where You Can Find More Information........................ 2
Forward Looking Statements................................. 2
About Take-Two Interactive Software, Inc................... 3
Recent Developments........................................ 3
Risk Factors............................................... 5
Use of Proceeds............................................ 17
Selling Stockholders....................................... 17
Plan of Distribution....................................... 19
Indemnification............................................ 20
Legal Matters.............................................. 20
Experts.................................................... 20
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Common Stock
TAKE-TWO INTERACTIVE SOFTWARE, INC.
-------------------------
PROSPECTUS
-------------------------
________ __, 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Expenses payable in connection with the issuance and distribution of the
securities being registered (estimated except in the case of the registration
fee) are as follows:
Amount
----------
Registration Fee $8,119.42
Printing 1,000
Legal and Accounting Fees and Expenses 25,000
Transfer Agents and Registrars Fees 1,000
Miscellaneous 4,880.58
----------
TOTAL $40,000.00
==========
The above fees will be paid by the Company.
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("DGCL") contains
provisions entitling the Company's directors and officers to indemnification
from judgments, finds, amounts paid in settlement and reasonable expenses
(including attorneys' fees) as the result of an action or proceeding in which
they may be involved by reason of having been a director or officer of the
Company. In its Certificate of Incorporation, the Company has included a
provision that limits, to the fullest extent now or hereafter permitted by the
DGCL, the personal liability of its directors to the Company or its stockholders
for monetary damages arising from a breach of their fiduciary duties as
directors. Under the DGCL as current in effect, this provision limits a
director's liability except where such director (i) breaches his duty of loyalty
to the Company or its stockholders, (ii) fails to act in good faith or engaged
in intentional misconduct or a knowing violation of law, (iii) authorizes
payment of an unlawful dividend or stock purchase or redemption as provided in
Section 174 of the DGCL, or (iv) obtains an improper personal benefit. This
provision does not prevent the Company or its stockholders from seeking
equitable remedies, such an injunctive relief or recision. If equitable remedies
are found not to be available to stockholders in any particular case,
stockholders may not have any effective remedy against actions taken by
directors that constitute negligence or gross negligence.
The Certificate of Incorporation also includes provisions to the effect
that (subject to certain exceptions) the Company shall, to the maximum extent
permitted from time to time under the law of the State of Delaware, indemnify,
and upon request shall advance expenses to, any director or officer to the
extent that such indemnification and advancement of expenses is permitted under
such law, as it may from time to time be in effect. In addition, the By-laws
require the Company to indemnify, to the fullest extent permitted by law, any
II-1
<PAGE>
director, officer, employee or agent of the Company for acts which such person
reasonably believes are not in violation of the Company's corporate purposes as
set forth in the Certificate of Incorporation. At present, the DGCL provides
that, in order to be entitled to indemnification, an individual must have acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the Company's best interests.
Item 16. Exhibits
(a) Exhibits
Exhibit No.
-----------
5 Opinion of Morrison Cohen Singer & Weinstein LLP regarding legality of
securities being registered.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Aronowitz, Chaiken & Hardesty, LLP.
23.3 Consent of Morrison Cohen Singer & Weinstein LLP (included in
Exhibit 5).
24 Power of Attorney included in the signature page of this registration
statement.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which it offers or
sells securities, a post-effective amendment to this registration
statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) 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) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
II-2
<PAGE>
(4) For the purpose of determining any liability under the
Securities Act of 1933, each filing of an annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the 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 small
business issuer 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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of 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 New York, State of New York, on the 31st day of
August 2000.
TAKE-TWO INTERACTIVE SOFTWARE, INC.
By: /s/ Ryan A. Brant
----------------------------------
Ryan A. Brant
Chief Executive Officer
Each person whose signature appears below hereby authorizes Ryan A.
Brant as his true and lawful attorney-in-fact with full power of substitution to
execute in the name and on behalf of such person, individually and in each
capacity stated below, and to file, any and all amendments to this Registration
Statement, including any and all post-effective amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
Signature Title Date
--------- ----- ----
/s/ Ryan A. Brant Chief Executive Officer and Director August 31, 2000
------------------------ (Principal Executive Officer)
Ryan A. Brant
/s/ James H. David, Jr. Chief Financial Officer August 31, 2000
------------------------ (Principal Financial and
James H. David, Jr. Accounting Officer)
/s/ Barry Rutcofsky Co-Chairman and Director August 31, 2000
------------------------
Barry Rutcofsky
Director
------------------------
Anthony R. Williams
/s/ Oliver R. Grace, Jr. Director August 31, 2000
------------------------
Oliver R. Grace, Jr.
Director
------------------------
Neil S. Hirsch
/s/ Kelly Sumner Director August 31, 2000
------------------------
Kelly Sumner
/s/ Robert Flug Director August 31, 2000
------------------------
Robert Flug
II-4
