Schedule 13D Amendment No. 15
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
(Amendment No. 15)
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
--------------------------------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
August 11, 2006
------------------------------------
(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
--------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY ----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 3,070,065
REPORTING ----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,070,065
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,070,065
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.72%
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
4) SOURCE OF FUNDS AF
--------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY ----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 3,070,065
REPORTING ----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,070,065
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,070,065
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.72%
--------------------------------------------------------------------------------
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) [ ]
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY ----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 2,816,478
REPORTING ----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,816,478
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,816,478
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.59%
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
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) [ ]
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY ----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 2,816,478
REPORTING ----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,816,478
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,816,478
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.59%
--------------------------------------------------------------------------------
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)
--------------------------------------------------------------------------------
3) SEC USE ONLY
--------------------------------------------------------------------------------
4) SOURCE OF FUNDS PF
--------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION United States of America
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 33,856
BENEFICIALLY ----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 3,424,619(1)
REPORTING ----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
33,856
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,424,619(1)
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,458,475(1)
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.46%
--------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON IN
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------------------------------------
(1) Includes (A) 3,070,065 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
-------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
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 8 SHARED VOTING POWER
EACH 340,754(2)
REPORTING ----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
47,656
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
340,754(2)
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 388,410(2)
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.74%
--------------------------------------------------------------------------------
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)
--------------------------------------------------------------------------------
3) SEC USE ONLY
--------------------------------------------------------------------------------
4) SOURCE OF FUNDS WC
--------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION New York
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 225,456
BENEFICIALLY ----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING ----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
225,456
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 225,456
--------------------------------------------------------------------------------
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) [ ]
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION United States of America
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 81,442
BENEFICIALLY ----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING ----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
81,442
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 81,442
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.36%
--------------------------------------------------------------------------------
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 August 9, 2006, in which the Master Fund offered (the
"Offer") 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 91.74% 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 14 to this Schedule 13D, the Master Fund
used $157,222.60 of investment capital to purchase an aggregate of 108,121
shares of Common Stock.
Item 4. Purpose of Transaction.
On July 19, 2006, the Master Fund sent another letter (the "July Letter")
to the Issuer's Board in which it renewed its 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 continues to believe that this
capital is immediately required by the Issuer both to meet internal liquidity
requirements and to ensure that the Issuer continues to meet the financial
guidelines necessary to comply with Nasdaq's listing
requirements, and further noted in the July Letter that:
o Jesse Sutton, the Issuer's President and the son of Morris Sutton, the
Issuer's Chairman, sold approximately 157,500 shares of the Issuer's Common
Stock prior to the date of the July Letter for aggregate proceeds of more
than $235,000, including the sale of a substantial number of shares at a
price of $1.35 per share - well below the price of the Master Fund's offer
to invest in the Issuer.
o In June 2006, the Russell U.S. Indexes announced that the Issuer will be
removed from the Russell 3000 membership list. As stated in the Russell
website, "the Russell family of U.S. Indexes is designed to be a
comprehensive representation of the investable U.S. equity market. The
Russell 3000 Index measures the performance of the 3,000 largest U.S.
companies based on total market capitalization, which represents
approximately 98% of the investable U.S. equity market."
In the July 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. Additionally, the
Master Fund respectfully requested that Jesse Sutton immediately resign as an
officer and employee of the Issuer or be terminated as such.
In the July Letter, the Master Fund advised the Board of the Issuer to
immediately begin to explore strategic alternatives, including financings, or a
combination through merger or otherwise with another company that has an
appropriate infrastructure, Board and management team that collectively will
enable the Issuer to reach its potential. The Master Fund urged the Board of the
Issuer to improve upon the disclosure it makes available to the public,
including providing greater detail in its earnings releases and scheduling
regular conference calls with investors so as to allow an exchange of questions
and answers, in each case as is appropriate for a Nasdaq-listed company.
The Board did not respond to the offer contained in the July Letter, so on
August 9, 2006, the Master Fund sent another letter (the "August Letter") to the
Issuer's Board in which it again renewed its 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 offer by the Master Fund represented a
premium of $0.12, or nearly 9%, over the closing price as of the date of the
August Letter.
In the August Letter, the Master Fund noted that Steven Weinroth, one of
the Issuer's independent directors, resigned just two days after the date of the
July Letter.
A copy of the August 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 3,070,065
shares of the Common Stock, representing approximately 13.72% 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 3,070,065 shares of the Common Stock held by Trinad Capital Master
Fund, Ltd. representing approximately 13.72% of the Common Stock of the Issuer.
Trinad Capital LP (as the owner of 91.74% 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 91.74% of the
3,070,065 shares of the Common Stock held by Trinad Capital Master Fund, Ltd.,
representing 12.59% 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 3,070,065 shares of Common
Stock, representing approximately 13.72% of the outstanding shares of Common
Stock.
(iii) Robert S. Ellin may be deemed to beneficially own 3,458,475 shares of
Common Stock, representing approximately 15.46% of the outstanding shares of
Common Stock, including: (A) 33,856 shares of Common Stock owned directly by
Robert S. Ellin; (B) 3,070,065 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 14 to this Schedule 13D:
On July 31, 2006, the Master Fund purchased 35,000 shares of Common Stock
through an open market transaction at a price of $1.4256 per share.
On August 1, 2006, the Master Fund purchased 3,700 shares of Common Stock
through an open market transaction at a price of $1.4714 per share.
On August 1, 2006 the Master Fund purchased 25,000 shares of Common Stock
through an open market transaction at a price of $1.4845 per share.
On August 2, 2006, the Master Fund purchased 10,000 shares of Common Stock
through an open market transaction at a price of $1.4934 per share.
On August 8, 2006, the Master Fund purchased 2,421 shares of Common Stock
through an open market transaction at a price of $1.4354 per share.
On August 9, 2006, the Master Fund purchased 6,000 shares of Common Stock
through an open market transaction at a price of $1.43 per share.
On August 10, 2006, the Master Fund purchased 25,000 shares of Common Stock
through an open market transaction at a price of $1.453 per share.
On August 10, 2006, the Master Fund purchased 1,000 shares of Common Stock
through an open market transaction at a price of $1.455 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: August 11, 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
August 9, 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 make fundamental changes in its management structure,
corporate governance, executive compensation and composition of the Company's
board of directors (the "Board").
On July 19, 2006, we made an offer to the Company's Board to invest an
aggregate of three million dollars ($3,000,000) directly in the Company through
the purchase of 2,000,000 shares of the Company's common stock at a price of
$1.50 per share. We note that this represented a premium of $0.17, or
approximately 12.5%, over the closing price of the Company's common stock on the
date of our offer. In light of our long-term commitment to the Company and all
of its shareholders, we did not request that the Company be required to register
our shares under applicable federal securities laws.
Notwithstanding our generous offer to provide equity financing to the
Company, the Company did not bother to respond to our well-considered offer. We
believe that the failure by the Company to respond to our offer is inexcusable
and constitutes a blatant disregard by the Company's board of its fiduciary
duties, particularly considering that our offer had minimal conditions, was not
contingent on a further due diligence review and we did not request that our
shares be registered under applicable securities laws. Moreover, we were shocked
upon learning that Jesse Sutton, the Company's President and the son of Morris
Sutton, the Company's Chairman, sold approximately 157,500 shares of the
Company's common stock during the second week of July for aggregate proceeds of
more than $235,000, including the sale of a substantial number of shares at a
price of $1.35 per share--well below the price of our offer to invest in the
Company. In our view, this clearly indicates a lack of confidence in the
Company's prospects by one of the Company's principal executive officers. It is
clear to us that Mr. Sutton would only have sold shares of the Company at a
price that he believed to represent the prevailing fair value for his shares.
This price with respect to many of the shares sold by him is substantially less
than the price that we indicated we would pay for newly-issued, unregistered
shares, and our investment would have resulted in providing much-needed
financing to the Company. We are also concerned that the Company will again fail
to meet the financial guidelines necessary to remain compliant with a number of
Nasdaq's listing requirements.
We also note that on July 21, 2006, just two days following our offer to
invest substantial funds in the Company, Steven Weinroth, one of the Company's
independent directors resigned. Since the beginning of this year, a total of 3
independent members of the Company's board of directors resigned (not to mention
prior resignations from other
August 9, 2006
Page 2
independent directors). We believe that this clearly represents a lack of
comfort by such individuals with the manner in which the board is operating, the
controls exerted by the members of the Sutton family upon the board and the
inability of such individuals to cause the board to operate in the best
interests of all of the Company's shareholders as a result of the considerable
influence of members of the Sutton family.
We believe that the Company and its shareholders continue to suffer under
its current Board and management. Notwithstanding the foregoing, we continue to
believe in the long-term prospects of the Company, if operated under the
auspices of an effective and new management team and a more diversified Board.
Accordingly, 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.
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 $0.12, or nearly
9%, over today'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 Board shall take all necessary and desirable action,
as reasonably requested by Trinad, to appoint three designees of
Trinad to the Board and to limit the size of the Board. 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. We
note further that this representation would not result in a change in
the control over the Board, but rather, would add significantly to the
depth and expertise of the existing Board and would be consistent with
our substantial investment in the Company. We have consulted with a
number of our fellow shareholders, who share our belief that the Board
should be immediately reconstituted to be more representative of our,
and their, shareholdings.
3. Termination or Resignation of Jesse Sutton. The Company continues to
perform poorly under Jesse Sutton's leadership. Moreover, his recent
sale of a substantial number of shares indicates his complete lack of
confidence in the Company's long-term prospects and sets a poor, if
not terrible, example for the other officers, employees and
shareholders of the Company. Accordingly, in light of the foregoing
factors, we respectfully request that he immediately resign as an
officer and employee of the Company or be terminated as such. We also
note that the Sutton family collectively receives compensation
(including in the form of options and other benefits) of more than $1
million per annum. We believe that this represents excessive
compensation and that these substantial funds could be better utilized
by the Company to hire a professional, independent management team. It
is not appropriate that the Company continues to be run as a family
business; it is a publicly-held company and the shareholders are
entitled to an independent, strong management team.
August 9, 2006
Page 3
4. Board Approval; Compliance with Applicable Laws. The Investment and
the other actions contemplated hereby shall be approved in advance by
the Board 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.
5. 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 expenses 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 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
Wednesday, August 16, 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
August 9, 2006
Page 4
amounted to a gross and blatant disregard of the interests of the Company and
its shareholders. Given the current condition of the Company, and its continued
deterioration, that offer has been withdrawn. Throughout this period, the
Company's insiders, including Messrs. Morris Sutton, Jesse Sutton and other
members of the Company's board continue to accumulate additional shares; however
such shares have not be acquired through an actual investment in the Company or
through the purchase of such shares in the open market, but rather, solely
through the ongoing vesting of share grants that have been made to them. While
such individuals continue to be richly compensated with cash and by their
receipt of additional shares, none of such persons have shown the faith in the
Company that we continue to exhibit by actually purchasing the Company's shares
and seeking to make a direct investment in the Company. 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 it 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.
We believe that our Investment proposal is extremely generous and, if
accepted, would greatly benefit the Company and help it avoid another liquidity
crisis or further issues involving its listing with Nasdaq. We are also of the
view that the Company's board would be violating its fiduciary duties if it were
to accept another financing offer that contains terms that are less favorable
than the terms of our proposed Investment, and we would avail ourselves of all
available legal remedies should that occur.
We also believe that the Board should immediately begin to explore
strategic alternatives, including financings, or a combination through merger or
otherwise with another company that has an appropriate infrastructure, Board and
management team that collectively will enable the Company to reach its
potential.
Finally, as earlier requested, we believe that the current disclosure that
has been made by the Company leaves substantial room for improvement. We urge
the Board to improve upon the disclosure it makes available to the public,
including providing greater detail in its earnings releases and scheduling
regular conference calls with investors so as to allow an exchange of questions
and answers, in each case as is appropriate for a Nasdaq-listed company.
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.
August 9, 2006
Page 5
By: Trinad Capital L.P.
By: Trinad Advisors GP LLC
August 9, 2006
Page 5
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: