Days after announcing a turnaround plan and $10.5 million in new financial support, 3DO Company, the game developer/publisher STREET RACING SYNDICATE, filed a voluntary bankruptcy petition for relief under Chapter 11 on May 28, 2003. The Redwood City, California company will mange its properties and conduct business as "debtors-in-possession" subject to the supervision and orders of the Bankruptcy Court pursuant to the Bankruptcy Code.
"This filing gives us more time to complete transactions in the interest of our stakeholders," said Trip Hawkins, chairman/ceo. "While we hope that this news will generate additional new opportunities, at this point we are focused on pursuing either the sale of the entire company or the sale of its assets."
In February 2003, 3DO raised $500,000 in capital through the sale of common stock and warrants, adding to the $720,000 sold in January, resulting in a total of $1.2 million raised during the March quarter. In addition, Hawkins increased his loan to the company from $8 million to $12 million. Pending stockholder approval, the company intends to convert $3 million of the loan debt with Trip Hawkins into common stock and warrants on the same terms as other investors, reducing the loan debt to $9 million. During the March quarter, the 3DO said it experienced tougher than expected market conditions, particularly for the Nintendo GameCube system, and elected to hold ARMY MEN: SARGE'S WAR for release in the June quarter, when conditions are expected to improve. In addition, prior to the completion of the credit facility, 3DO had cash constraints regarding inventory purchases and could not fill all orders on time. Recent products include HEROES OF MIGHT AND MAGIC IV: WINDS OF WAR, HIGH HEAT MAJOR LEAGUE BASEBALL 2004 and a merchandising license agreement with Stan Winston Creatures for THE FOUR HORSEMEN OF THE APOCALYPSE. More information about the 3DO Co. and 3DO products can be found at www.3do.com.