Schedule 13D Amendment No. 13
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
(Amendment No. 13)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
Majesco Entertainment Company
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
784495103
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(CUSIP Number)
Trinad Capital Master Fund, Ltd.
2121 Avenue of the Stars, Suite 1650
Los Angeles, CA 90067
(310) 601-2500
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(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
June 27, 2006
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(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f), or 13d-1(g), check the following
box: |_|.
SCHEDULE 13D
CUSIP No. 784495103
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Trinad Capital Master Fund, Ltd. 98-0447604
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) X (joint filers)
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3) SEC USE ONLY
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4) SOURCE OF FUNDS WC
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5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
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6) CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY --------------------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 2,914,105
PERSON --------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,914,105
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,914,105
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.02%
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14) TYPE OF REPORTING PERSON
CO
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SCHEDULE 13D
CUSIP No. 784495103
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Trinad Management, LLC 20-0591302
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) X (joint filers)
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3) SEC USE ONLY
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4) SOURCE OF FUNDS AF
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5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
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6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY --------------------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 2,914,105
PERSON --------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,914,105
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,914,105
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.02%
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14) TYPE OF REPORTING PERSON
IA
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SCHEDULE 13D
CUSIP No. 784495103
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Trinad Capital LP 20-0593276
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) X (joint filers)
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3) SEC USE ONLY
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4) SOURCE OF FUNDS AF
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5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
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6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY --------------------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 2,812,111
PERSON --------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,812,111
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,812,111
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.57%
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14) TYPE OF REPORTING PERSON
PN
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SCHEDULE 13D
CUSIP No. 784495103
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Trinad Advisors GP, LLC 20-0591650
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) X (joint filers)
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3) SEC USE ONLY
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4) SOURCE OF FUNDS AF
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5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
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6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY --------------------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 2,812,111
PERSON --------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,812,111
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,812,111
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.57%
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14) TYPE OF REPORTING PERSON
OO
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SCHEDULE 13D
CUSIP No. 784495103
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert S. Ellin
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) X (joint filers)
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3) SEC USE ONLY
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4) SOURCE OF FUNDS PF
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5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
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6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF 7 SOLE VOTING POWER
SHARES 33,856
BENEFICIALLY --------------------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 3,268,659(1)
PERSON --------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
33,856
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10 SHARED DISPOSITIVE POWER
3,268,659(1)
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,302,515(1)
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.76%
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14) TYPE OF REPORTING PERSON
IN
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(1) Includes (A) 2,914,105 shares of Common Stock owned by the Trinad Capital
Master Fund, Ltd. (the "Master Fund"); (B) 47,656 shares of Common Stock owned
directly by Nancy J. Ellin, the spouse of Robert S. Ellin; (C) 225,456 shares of
Common Stock that are owned directly by Atlantis Equities, Inc., a New York
corporation of which Nancy J. Ellin is the sole stockholder ("Atlantis"); and
(D) 81,442 shares of Common Stock owned by the Robert S. Ellin Profit Sharing
Plan (the "Plan"). Robert S. Ellin disclaims beneficial ownership of the shares
of Common Stock directly beneficially owned by Trinad Capital Master Fund, Ltd.
except to the extent of his pecuniary interests therein. Mr. Ellin also
disclaims any beneficial ownership of shares of Common Stock owned directly by
Mrs. Ellin, Atlantis and the Plan.
SCHEDULE 13D
CUSIP No. 784495103
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Nancy J. Ellin
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) X (joint filers)
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3) SEC USE ONLY
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4) SOURCE OF FUNDS PF
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5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
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6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF 7 SOLE VOTING POWER
SHARES 47,656
BENEFICIALLY --------------------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 340,754(2)
PERSON --------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
47,656
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10 SHARED DISPOSITIVE POWER
340,754(2)
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
388,410(2)
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.74%
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14) TYPE OF REPORTING PERSON
IN
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(2) Includes (A) 33,856 shares of Common Stock owned by Robert S. Ellin, Mrs.
Ellin's spouse, (B) 225,456 shares of Common Stock that are owned directly by
Atlantis, a company of which Mrs. Ellin is the sole stockholder; and (C) 81,442
shares of Common Stock owned by the Plan. Mrs. Ellin disclaims any beneficial
ownership of shares of Common Stock owned individually by Mr. Ellin, and owned
directly by Mr. Ellin and the Plan.
SCHEDULE 13D
CUSIP No. 784495103
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Atlantis Equities, Inc.
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) X (joint filers)
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3) SEC USE ONLY
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4) SOURCE OF FUNDS WC
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5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
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6) CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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NUMBER OF 7 SOLE VOTING POWER
SHARES 225,456
BENEFICIALLY --------------------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING
PERSON --------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
225,456
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10 SHARED DISPOSITIVE POWER
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
225,456
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.01%
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14) TYPE OF REPORTING PERSON
CO
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SCHEDULE 13D
CUSIP No. 784495103
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert S. Ellin Profit Sharing Plan
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) X (joint filers)
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3) SEC USE ONLY
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4) SOURCE OF FUNDS OO
------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
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6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF 7 SOLE VOTING POWER
SHARES 81,442
BENEFICIALLY --------------------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING
PERSON --------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
81,442
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10 SHARED DISPOSITIVE POWER
------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
81,442
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.36%
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14) TYPE OF REPORTING PERSON
OO
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The purpose of this Schedule 13D/A is to reflect the delivery by Trinad
Capital Master Fund, Ltd. (the "Master Fund"), one of the Reporting Persons, to
the board of directors of Majesco Entertainment Company (the "Issuer") of a
letter on June 27, 2006, in which the Master Fund offered to make a $3 million
cash investment in the Issuer through the purchase of shares of the Issuer's
common stock, par value $.001 per share ("Common Stock"), at a price that
reflected a premium to the trading price of the Common Stock on the date of the
Offer. This Schedule 13D/A is also being filed to reflect additional purchases
by one or more of the Reporting Persons of additional shares of Common Stock.
Item 1. Security and Issuer.
The class of equity securities to which this statement relates is the
Common Stock of the Issuer. The principal executive offices of the Issuer are
located at 160 Raritan Center Parkway, Edison, New Jersey 08837.
Item 2. Identity and Background.
(a), (c)
This Schedule 13D/A is being filed by:
(i) Trinad Capital Master Fund, Ltd., a Cayman Islands corporation, which is a
hedge fund dedicated to investing in micro-cap companies, with respect to
shares directly and beneficially owned by Trinad Capital Master Fund, Ltd.
(ii) Trinad Capital LP, a Delaware limited partnership, which is principally
engaged in investing in Trinad Capital Master Fund, Ltd., with respect to
shares indirectly and beneficially owned by Trinad Capital LP. As of the
date hereof, Trinad Capital LP is the owner of 96.5% of the issued and
outstanding shares of the Trinad Capital Master Fund, Ltd.
(iii) Trinad Management, LLC, a Delaware limited liability company, which is
principally engaged in the business of managing the investments of the
Trinad Capital Master Fund, Ltd. and Trinad Capital LP, with respect to the
shares directly and beneficially owned by Trinad Capital Master Fund, Ltd.
(iv) Trinad Advisors GP, LLC, a Delaware limited liability company and the
general partner of Trinad Capital LP, which is principally engaged in
serving as the general partner of Trinad Capital LP, with respect to the
shares directly and beneficially owned by Trinad Capital LP.
(v) Robert S. Ellin, an individual, whose principal occupation is to serve as
portfolio manager and the managing member of Trinad Advisors GP, LLC, the
general partner of Trinad Capital LP, a principal stockholder of Trinad
Capital Master Fund, Ltd., and the managing member of Trinad Management,
LLC, the manager of the Trinad Capital Master Fund, Ltd.
(vi) Nancy J. Ellin, an individual, whose principal occupation is to serve as
the sole officer and director and the sole shareholder of Atlantis
Equities, Inc.
(vii) Atlantis Equities, Inc., a New York corporation that is a merchant banking
firm.
(viii) Robert S. Ellin Profit Sharing Plan, a trust fund.
Each of the foregoing is referred to as a "Reporting Person" and collectively as
the "Reporting Persons."
Trinad Capital Master Fund, Ltd., Trinad Capital LP, Trinad Management, LLC, and
Trinad Advisors GP, LLC are collectively referred to as the "Fund."
The Reporting Persons are making this single, joint filing because they may be
deemed to constitute a "group" within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Each Reporting
Person disclaims beneficial ownership of all shares of Common Stock to which
such Reporting Person does not have a pecuniary interest.
(b)
The address of the principal business office of Trinad Capital Master Fund,
Ltd., Trinad Capital LP, Trinad Management, LLC, Trinad Advisors GP, LLC, and
Robert S. Ellin is 2121 Avenue of the Stars, Suite 1650, Los Angeles, California
90067.
(d)-(e)
During the last five years, none of the Reporting Persons have nor, to the best
of their knowledge, have any of the directors, executive officers, control
persons, general partners or members of such Reporting Persons (i) been
convicted in any criminal proceeding or (ii) been a party to any civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which he was subject to any judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
(f)
Robert S. Ellin is a United States citizen.
Nancy J. Ellin is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
Since the date of amendment number 12 to this Schedule 13D, the Master Fund
used $205,018.02 of investment capital to purchase an aggregate of 140,309
shares of Common Stock.
Item 4. Purpose of Transaction.
On June 27, 2006, the Master Fund sent a letter to the Issuer's Board in
which it again made an offer to invest $3 million in the Issuer through the
purchase from the Issuer of 2,000,000 shares of Common Stock at a price of $1.50
per share. The Master Fund believes that this capital is immediately required by
the Issuer both to meet internal liquidity requirements and to ensure that the
Issuer meets the financial guidelines necessary so as to continue to comply with
Nasdaq's listing requirements, and notes that:
o The Issuer received a notice of delisting from the NASDAQ Stock Market
advising the Issuer that it did not comply with MarketPlace Rule
4310(c)(2)(B), which requires the Issuer to maintain a minimum of $2.5
million in stockholders' equity, $35.0 million market value of listed
securities or $500,000 of net income from continuing operations for two of
the three latest fiscal years.
o The Issuer has regained compliance, but only by virtue of the fact of
one-time, non-recurring events. In the absence of these events, net revenue
for the quarter would have reflected a $2.258 million loss, rather than a
$0.839 million profit.
o As of the Issuer's most recent quarterly report on Form 10-Q, the Issuer
had stockholders' equity of only $3,665,000.
In the letter, the Master Fund also requested that the Issuer take all
actions necessary to nominate three (3) individuals proposed by the Master Fund
to the Issuer's Board of Directors and take any further action so that the
Issuer's Board consists of a total of seven (7) members. A copy of the letter is
attached as
Exhibit A hereto and is incorporated herein by reference.
The Reporting Persons have made numerous requests that the Issuer and the
Board take actions to improve the performance and financial condition of the
Issuer and to establish a more appropriate corporate governance structure. To
date, the Issuer has not acted upon any of the Master Fund's requests.
The Reporting Persons may at any time, or from time to time, acquire
additional shares of Common Stock or dispose of their shares of Common Stock,
propose or pursue any of the foregoing actions or matters or change their
intentions with respect to the matters referred to herein.
Item 5. Interest in Securities of the Issuer.
(a)
(i) The percentages used herein and are calculated based on the 22,374,073
shares of Common Stock reported by the Issuer to be issued and outstanding as of
June 8, 2006 in the Issuer's latest Form 10-Q, as filed with the Securities and
Exchange Commission on June 9, 2006.
As of the date hereof,
Trinad Capital Master Fund, Ltd. is the beneficial owner of 2,914,105
shares of the Common Stock, representing approximately 13.02% of the Common
Stock of the Issuer.
Trinad Management, LLC (as the manager of the Trinad Capital Master Fund,
Ltd. and Trinad Capital LP) and Robert S. Ellin (as a Managing Member of Trinad
Advisors GP, LLC and Trinad Management, LLC) may be deemed to be the beneficial
owner of 2,914,105 shares of the Common Stock held by Trinad Capital Master
Fund, Ltd. representing approximately 13.02% of the Common Stock of the Issuer.
Trinad Capital LP (as the owner of 96.5% of the shares of Trinad Capital
Master Fund, Ltd.) and Trinad Advisors GP, LLC (as the general partner of Trinad
Capital LP), each may be deemed to be the beneficial owner of 96.5% of the
shares of the 2,875,355 shares of the Common Stock held by Trinad Capital Master
Fund, Ltd., representing 12.57% of the Common Stock of the Issuer.
Each of Trinad Capital LP, Trinad Management, LLC and Trinad Advisors GP,
LLC disclaim beneficial ownership of the shares of Common Stock directly
beneficially owned by Trinad Capital Master Fund, Ltd.
Robert S. Ellin disclaims beneficial ownership of the shares of Common
Stock directly beneficially owned by Trinad Capital Master Fund, Ltd. except to
the extent of his pecuniary interests therein.
Trinad Management, LLC, and Robert S. Ellin have shared power to direct the
vote and shared power to direct the disposition of these shares of Common Stock.
(ii) The Fund may be deemed to beneficially own 2,914,105 shares of Common
Stock, representing approximately 13.02% of the outstanding shares of Common
Stock.
(iii) Robert S. Ellin may be deemed to beneficially own 3,268,659 shares of
Common Stock, representing approximately 14.76% of the outstanding shares of
Common Stock, including: (A) 33,856 shares of Common Stock owned directly by
Robert S. Ellin; (B) 2,914,105 shares of Common Stock owned by the
Master Fund; (C) 47,656 shares of Common Stock owned directly by Nancy J. Ellin,
the spouse of Robert S. Ellin; (D) 225,456 shares of Common Stock owned directly
by Atlantis, a New York corporation of which Nancy J. Ellin is the sole
stockholder; and (E) 81,442 shares of Common Stock owned by the Plan. Robert S.
Ellin disclaims beneficial ownership of the shares of Common Stock directly
beneficially owned by Trinad Capital Master Fund, Ltd. except to the extent of
his pecuniary interests therein. Mr. Ellin also disclaims any beneficial
ownership of shares of Common Stock owned directly by Mrs. Ellin, Atlantis and
the Plan.
(b)
Each of the Reporting Persons share the power to vote or to direct the vote
and to dispose or to direct the disposition of the Common Stock it, he, or she
may be deemed to beneficially own.
(c)
The following Reporting Persons have effected the following transactions
with respect to shares of the Common Stock since the date of the amendment
number 12 to this Schedule 13D:
On May 26, 2006, the Master Fund purchased 25,000 shares of Common Stock
through an open market transaction at a price of $1.4114 per share.
On May 30, 2006, the Master Fund purchased 3,939 shares of Common Stock
through an open market transaction at a price of $1.403 per share.
On May 31, 2006 the Master Fund purchased 220 shares of Common Stock
through an open market transaction at a price of $1.6636 per share.
On June 15, 2006, the Master Fund purchased 10,000 shares of Common Stock
through an open market transaction at a price of $1.53 per share.
On June 16, 2006, the Master Fund purchased 15,768 shares of Common Stock
through an open market transaction at a price of $1.533 per share.
On June 19, 2006 the Master Fund purchased 25,000 shares of Common Stock
through an open market transaction at a price of $1.4937 per share.
On June 21, 2006, the Master Fund purchased 5,853 shares of Common Stock
through an open market transaction at a price of $1.4426 per share.
On June 23, 2006, the Master Fund purchased 25,000 shares of Common Stock
through an open market transaction at a price of $1.4149 per share.
On June 27, 2006, the Master Fund purchased 15,779 shares of Common Stock
through an open market transaction at a price of $1.4682 per share.
On June 28, 2006, the Master Fund purchased 13,750 shares of Common Stock
through an open market transaction at a price of $1.4578 per share.
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: June 30, 2006
TRINAD CAPITAL MASTER FUND, LTD.
By: Trinad Capital L.P.
By: Trinad Advisors GP, LLC
By: /s/ Robert S. Ellin
------------------------------------------
Robert. S. Ellin, Managing Member
/s/ Robert S. Ellin
------------------------------------------
Robert S. Ellin
/s/ Nancy J. Ellin
------------------------------------------
Nancy J. Ellin
ATLANTIS EQUITIES, INC.
/s/ Nancy J. Ellin
------------------------------------------
By: Nancy J. Ellin, President
ROBERT S. ELLIN PROFIT SHARING PLAN
/s/ Robert S. Ellin, Trustee
------------------------------------------
By: Robert S. Ellin, Trustee
TRINAD CAPITAL MASTER FUND, LTD.
By: Trinad Capital L.P.
By: Trinad Advisors GP LLC
By: /s/ Robert S. Ellin
--------------------------------------
Name: Robert S. Ellin
Title: Managing Member
Exhibit A
Trinad Capital Master Fund Ltd.
2121 Avenue of the Stars, Suite 1650
Los Angeles, California 90067
June 27, 2006
Board of Directors
Majesco Entertainment Company
160 Raritan Center Parkway
Suite 1
Edison, New Jersey 08837
Gentlemen:
As you know, over the past several months, Trinad Capital Master Fund Ltd.
and its affiliates ("Trinad" or "we"), which has been a long-time shareholder of
Majesco Entertainment Company ("Majesco" or the "Company"), has made repeated
requests that the Company to make fundamental changes in the its management
structure, corporate governance, executive compensation and board composition.
Specifically, we have requested that the Company remove certain members of the
Sutton family as officers and replace them with candidates who have the
requisite qualifications, experience and relevant backgrounds to properly serve
as executive officers of the Company. As a consequence of the failure by the
Board to act upon or accept any of our requests, and the continued deterioration
of the Company's financial position and prospects, we sent a notice (the
"Nomination Notice") to the Company on March 23, 2006 advising the Company of
our intention to nominate three members to the Company's board at the Company's
2006 annual meeting of shareholders.
We note that the Company received a notice of delisting from The NASDAQ
Stock Market ("Nasdaq") advising the Company that it did not comply with
Marketplace Rule 4310(c)(2)(B), which requires the Company to maintain a minimum
of $2.5 million in stockholders' equity, $35.0 million market value of listed
securities or $500,000 of net income from continuing operations for two of the
three latest fiscal years. We are of course pleased that the Company has
regained compliance with Nasdaq's listing requirements; however, we believe that
the Company's ability to reestablish compliance has less to do with the
fundamentals of its core business or any real improvement in its continuing
operations and more to do with one-time, non-recurring events.(1) In the absence
of these non-recurring events, net revenue for the quarter would have reflected
a $2.258 million loss, rather than a profit of $.839 million. Further, this
reinstatement is based on a very narrow margin of compliance and we remain
concerned that the Company will again fail to meet the financial guidelines
necessary to remain compliant with a number of Nasdaq's listing requirements.
---------------
(1) "During the three and six month periods ended April 30, 2006, the Company
recorded a gain on settlement of liabilities consisting of $1.5 million related
to negotiated reductions in royalties due for certain video and video game
titles, $0.5 million gain on the sale of rights to certain video game titles,
and a $1.1 million gain on the settlement of accounts payable for legal,
marketing, and development expenses for less than the invoiced amount." Majesco
Entertainment Co., Form 10-Q, For Period Ending 4/30/2006
As of the Company's most recent quarterly report on Form 10-Q, the Company
had stockholders' equity of only $3,665,000. We believe that it is imperative
for the Company's future financial health and business that it immediately
obtain additional equity capital, and we are not aware of any financings or
other developments that would result in an increase in the Company's
stockholders' equity or any other improvement to its financial position.
Further, we believe that the Company is perilously close to once again having it
shares delisted by Nasdaq, considering that the Company's stockholders' equity
is only modestly in excess of Nasdaq's minimum requirements. We are prepared to
provide immediate assistance to the Company to avert what we believe to be an
impending liquidity crisis and the delisting of its equity securities from
Nasdaq by reiterating our previous offer to make an equity investment in the
Company of three million dollars ($3,000,000), at a price of $1.50 per share,
upon the terms, and subject to the satisfaction of each of the conditions, set
forth below. There are no other conditions to our investment except as set forth
below. We believe that these conditions are customary and will not unduly
disrupt the Company or divert the attention of its management team.
1. Cash Investment. The Company shall issue and sell to Trinad or its
designees, and Trinad or its designees shall purchase from the
Company, an aggregate of 2,000,000 shares of the Company's common
stock at a price of $1.50 per share, or an aggregate of three million
dollars. We note that this represents a premium of $0.07, or nearly
5%, over yesterday's closing price of the Company's common stock. In
light of our long-term commitment to the Company and all of its
shareholders, we are not requesting that the Company be required to
register our shares under applicable federal securities laws. We refer
to the purchase and sale of common stock as set forth above as the
"Investment."
2. Board Representation. Upon the completion of the Investment, the
Company and the Company's Board shall take all necessary and desirable
action, as reasonably requested by Trinad, to appoint three designees
of Trinad to the Company's board of directors and to limit the size of
the board to seven members. This would result in the board being
comprised of six independent members and Morris Sutton. We recognize
that this may be effected in a number of ways including, without
limitation, through the resignation of certain existing board members
or by increasing the size of the existing board and, in each case,
filling vacancies with our nominees. We are prepared to propose as
nominees individuals that we strongly believe will add value to the
Board's decision-making process and enhance the Board's ability to
maximize shareholder value. Further, we believe that such
representation on the Board is entirely commensurate with our
substantial equity ownership in the Company. We have already provided
you with extensive background information on our nominees.
3. Board Approval; Compliance with Applicable Laws. The Investment and
the other actions contemplated hereby shall be approved in advance by
the Board of Directors of Majesco in a manner to render inapplicable
any and all laws, regulations and agreements that would prevent, or
impose material conditions upon the Investment. Further, Majesco shall
execute and deliver any further instruments or documents and take all
such necessary action that may be reasonably requested by Trinad to
carry out the purpose of this letter.
4. Miscellaneous.
(a) Attorneys' Fees. In the event any of the parties hereto shall
institute any action or proceeding against any other party or parties
hereto relating to this letter, the unsuccessful party in such action
or proceeding shall reimburse the successful party or parties for its
reasonable expense incurred in connection herewith, including
reasonable attorneys' fees. Further, the Company shall
be required to reimburse Trinad for all of its out-of-pocket fees and
expenses incurred in connection with the transactions contemplated
hereby, including for reasonable attorneys' fees.
(b) Governing Law. This letter shall be governed by, construed
and enforced in accordance with the laws of the State of New York,
United States of America, without regard to conflict of law
principles.
(c) Entire Letter; Modification. This letter sets forth the
entire understanding among the parties and supersedes all agreements
made prior to or contemporaneously herewith, written or oral, with
respect to the subject matter hereof. Any modification of this letter
must be in writing and signed by all of the parties hereto in an
instrument which makes specific reference to this letter.
(d) Termination. In the event that this letter is not accepted in
writing by Majesco and returned to Trinad before 5:00 P.M. EST Monday,
July 3, 2006, this letter shall automatically terminate and be null
and void without any obligation of Trinad. Further, this letter may be
terminated earlier by Trinad by the delivery of written notice to
Majesco of its desire to so terminate.
(e) Counterparts. This letter may be executed in counterparts,
each of which shall be deemed an original and all of which together
shall constitute one and the same instrument.
(f) Non-Binding Letter. Your acceptance and execution of this
letter will affirm our mutual intent as set forth herein. This letter
expresses only the intention of Trinad to make the Investment
contemplated hereby upon the terms and subject to the conditions
contained herein, and does not constitute a binding agreement, or
create any legal obligation on the part of Trinad. Any such agreement
or legal obligation shall be created solely through the execution and
delivery of a definitive purchase or investment agreement in form and
substance mutually satisfactory to both parties. If such a definitive
agreement is not executed, our respective obligations under this
letter of intent shall be terminated.
We are confident that our proposal is reasonable and beneficial to the
interests of the Company's shareholders. The Board's failure to respond to our
many overtures has resulted in the continued deterioration of the Company. As
you know, during the past several months we made several offers to the Board to
make a substantial equity investment in the Company, including an offer not long
ago to invest $7.5 million in the Company through the purchase from the Company
of approximately 4,285,714 shares of the Company's Common Stock at a price of
$1.75 per share, which represented a premium of more than 20% over the closing
price of the Common Stock on the date immediately preceding that offer. To the
shock and dismay of us and our fellow Company shareholders, the Board did not
even bother to respond to that offer. At the time, and clearly in retrospect, it
is clear that the Board's inaction amounted to a gross and blatant disregard of
the interests of the Company and its shareholders.
The Company responded to a subsequent offer to provide financing, by
issuing to Trinad a Non-Disclosure Agreement that contained egregious and
uncustomary stipulations for a document of this nature. Such conditions were
specifically intended to tie our hands and further entrench members of this
board and management team who continue to go to great lengths to remain
unaccountable to the Company's shareholders.
Given the current condition of the Company, and its continued
deterioration, that offer has been withdrawn. Although we have been purchasing
shares of the Company's common stock in the open market, we believe that it
would be in the best interests of the Company if it were to directly issue new
shares to us and receive the proceeds for the sale of such shares, which it
appears to desperately need. Our offer contains minimal conditions, and we
believe provides the board with an opportunity that--in the course of
discharging its fiduciary duties to all of the Company's stockholders--it is
compelled to accept. The time has come for the Board to take decisive and
aggressive action to begin to deal with the enormity of problems that now face
the Company. We are confident that our proposal is very generous, particularly
considering the Company's continued poor performance and current and
deteriorating financial position. Time is clearly of the essence, as any further
diminution in shareholder value is simply unacceptable. In the event that the
Board once again rejects our offer, then we are prepared to continue to purchase
shares of the Company's common stock and to seek to force the Board to finally
take action that is in the best interests of all of its stockholders.
If you agree to accept our Investment proposal upon the terms and
conditions set forth herein, please so indicate by signing this letter in the
space provided below for your signature, whereupon we will instruct our counsel
to immediately begin drafting definitive agreements for our respective review.
Thank you for your prompt consideration of this very important matter.
Very truly yours,
TRINAD CAPITAL MASTER FUND LTD.
By: Trinad Capital L.P.
By: Trinad Advisors GP LLC
By: /s/ Robert S. Ellin
-------------------
Name: Robert S. Ellin
Title: Managing Member
AGREED TO AND ACCEPTED
THIS __ DAY OF ___________, 2006:
MAJESCO ENTERTAINMENT COMPANY
By: _____________________________
Name:
Title: