Schedule 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DUuc85I5csI5L7yOwAvgDbWnM467Ak0rGe5FdHYYEGOKAAmGVlPC+FFQmC5njHJL ZlPPxPZpGK279/535IF4kQ== 0001193125-08-035779.txt : 20080222 0001193125-08-035779.hdr.sgml : 20080222 20080222071957 ACCESSION NUMBER: 0001193125-08-035779 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20080222 DATE AS OF CHANGE: 20080222 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GRAVITY Co., Ltd. CENTRAL INDEX KEY: 0001313310 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 000000000 STATE OF INCORPORATION: M5 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-80768 FILM NUMBER: 08634636 BUSINESS ADDRESS: STREET 1: NURITKUM SQUARE BUSINESS TOWER 15F STREET 2: 1605 SANGAM-DONG, MAPO-GU CITY: SEOUL STATE: M5 ZIP: 121-270 BUSINESS PHONE: 82-2-2132-7000 MAIL ADDRESS: STREET 1: NURITKUM SQUARE BUSINESS TOWER 15F STREET 2: 1605 SANGAM-DONG, MAPO-GU CITY: SEOUL STATE: M5 ZIP: 121-270 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GungHo Online Entertainment, Inc. CENTRAL INDEX KEY: 0001427388 IRS NUMBER: 000000000 STATE OF INCORPORATION: M0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1-2-2 YURAKUCHO STREET 2: CHIYODA-KU CITY: TOKYO STATE: M0 ZIP: 100-0006 BUSINESS PHONE: 81-3-5511-1400 MAIL ADDRESS: STREET 1: 1-2-2 YURAKUCHO STREET 2: CHIYODA-KU CITY: TOKYO STATE: M0 ZIP: 100-0006 SC 13D 1 dsc13d.htm SCHEDULE 13D Schedule 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

RULE 13d-2(a)

Gravity Co., Ltd.

(Name of Issuer)

Common Stock, Par Value Won 500 Per Share

(Title of Class of Securities)

38911N107

(CUSIP Number)

Machiko Yagashiro

GungHo Online Entertainment, Inc.

2-2 Yurakucho 1-chome, Chiyoda-ku,

Tokyo 100-0006, Japan

Telephone No.: 81-3-5511-1400

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

February 14, 2008

(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 that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨

NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §§ 240.13d-7 for other parties to whom copies are to be sent.

The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No. 38911N107		13D		Page 1


1	NAME OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). GungHo Online Entertainment, Inc.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ¨ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)	¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION JAPAN


NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 SOLE VOTING POWER 3,640,619
		8 SHARED VOTING POWER 0
		9 SOLE DISPOSITIVE POWER 3,640,619
		10 SHARED DISPOSITIVE POWER 0


11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,640,619
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 52.4%
14	TYPE OF REPORTING PERSON CO

Item 1.

Security and Issuer.

The title of the class of equity securities to which this statement relates is the common stock (the “Common Stock”), par value Won 500 per share, of Gravity Co., Ltd., a corporation organized under the laws of the Korea (the “Company”). The principal executive offices of the Company are located at Noritkum Square Business Tower 15F, 1605, Sangam-Dong, Mapo-Gu, Seoul 121-836, Korea.

Item 2.

Identity and Background.

(a)-(c) and (f)

This statement is filed by GungHo Online Entertainment, Inc. (“GungHo”), a corporation organized under the laws of Japan and having its principal executive office at 2-2 Yurakucho 1-chome, Chiyoda-ku, Tokyo 100-0006, Japan. GungHo’s principal business is online game planning, development, operations and internet distribution.

The name, present principal occupation, business address and citizenship of each of GungHo’s directors and executive officers are set forth on the Schedule I to this Schedule 13D.

(d) and (e)

Neither GungHo nor, to the best of its knowledge, any of its directors or executive officers has, during the last five years, been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a 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.

Item 3.

Source and Amount of Funds or Other Consideration.

On February 14, 2008, GungHo executed a share subscription agreement (the “Share Subscription Agreement”) with Heartis Inc. (“Heartis”), a corporation organized under the laws of Japan, pursuant to which, on April 1, 2008, Heartis will transfer 3,640,619 shares of Common Stock (the “Shares”) to GungHo as a contribution in kind for 24,308 newly issued shares of common stock of GungHo. The number of shares to be issued by GungHo was determined based on an aggregate valuation of the Shares of 4,035,180,549 Japanese Yen. GungHo will obtain the legal title to the Shares when such contribution in kind is made. The consummation of the Share Subscription Agreement is not subject to any conditions.

An English translation of the Share Subscription Agreement is filed as Exhibit A to this Schedule 13D and is hereby incorporated by reference herein.

Item 4.

Purpose of Transaction.

The information set forth under Item 3 above is incorporated herein by reference.

GungHo is acquiring the Shares with a view to establishing and maintaining a strategic relationship with the Company to, among other things, explore the development and marketing of products and services through a synergy to be created by harnessing GungHo’s strengths in multi platform delivery with the Company’s game development process.

Following consummation of the Share Subscription Agreement, if GungHo deems market and other conditions favorable, or if it otherwise decides, GungHo may increase or decrease its ownership of the Common Stock through open market purchases or sales, negotiated purchases or sales, or other transactions. However, if GungHo does not deem market and other conditions as favorable or if it otherwise decides, it may not do so. Except as set forth in this Item 4, GungHo does not have any plans or proposals which relate to or would result in the acquisition or disposition of Common Stock by it or any of the other events described in Items 4(a) through 4(j) of Schedule 13D.

- i -

Item 5.

Interest in Securities of the Issuer.

(a) Prior to February 14, 2008, GungHo was not a beneficial owner of any shares of Common Stock. Upon execution of the Share Subscription Agreement, GungHo may be deemed to have beneficially acquired 3,640,619 shares of Common Stock, constituting approximately 52.4% of the total issued and outstanding Common Stock (based on 6,948,900 shares of Common Stock, the total number of Common Stock issued and outstanding as of the most recently available filing with the Securities and Exchange Commission by the Company on June 29, 2007). The Share Subscription Agreement will be consummated on April 1, 2008, and there are no conditions to be satisfied prior to that date.

After GungHo issues new shares pursuant to the Share Subscription Agreement, GungHo will be held 21.1% by Heartis and 14.7% by Asian Groove, Inc. (“Asian Groove”), a corporation organized under the laws of Japan. Taizo Son, the Chairman of GungHo, controls Heartis through his ownership of 100% of the issued share capital of Inter Operations Inc. (“Inter Operations”), a corporation organized under the laws of Japan, which owns 100% of the issued share capital of Heartis. Taizo Son also controls Asian Groove by directly owning 33.3% of the issued share capital of Asian Groove, and indirectly owning, through his ownership of Inter Operations, a further 33.3% of Asian Groove. Thus, Taizo Son indirectly will own or control 35.8% of the issued share capital of GungHo after GungHo issues new shares pursuant to the Share Subscription Agreement.

Also, after GungHo issues new shares pursuant to the Share Subscription Agreement, 33.6% of the issued share capital of GungHo will be owned by Softbank BB Corp. (“Softbank BB”), a corporation organized under the laws of Japan, and a subsidiary of SOFTBANK CORP. (“Softbank”), a corporation organized under the laws of Japan. Masayoshi Son is the Chairman & CEO of Softbank and Softbank BB, and brother to Taizo Son.

Despite the abovementioned direct and indirect ownership of GungHo by Taizo Son, Inter Operations and Asian Groove, along with Taizo Son’s familial relationship with Masayoshi Son, Taizo Son, Inter Operations and Asian Groove disclaim beneficial ownership of the Shares because they do not believe they have, or will have, the ability to control GungHo’s voting or disposition of the Shares. There is no agreement or understanding between Taizo Son and Masayoshi Son as to GungHo’s voting or disposition of the Shares. Shares of GungHo not held by Heartis, Asian Groove or Softbank BB are held by public shareholders unaffiliated with Taizo Son, Inter Operations and Asian Groove. GungHo is a public company listed on the Nippon New Market Hercules in Japan, and the directors of GungHo owe a fiduciary duty to shareholders under Japanese law.

(b) After the Share Subscription Agreement is consummated, GungHo will be the registered owner and will have the sole power to vote or dispose or to direct the vote or disposition of the 3,640,619 shares of Common Stock beneficially owned by GungHo.

(c) Except for the transfer contemplated by the Share Subscription Agreement as described in Item 3, neither GungHo nor, to its knowledge, any of its directors or executive officers has effected any transaction in the Common Stock during the past sixty days.

(d) None.

(e) Not applicable.

- ii -

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

The information set forth under Items 3 and 5 above is incorporated herein by reference.

Item 7.

Material to be Filed as Exhibits.

Exhibit A — English translation of Share Subscription Agreement, dated as of February 14, 2008, by and between GungHo Online Entertainment, Inc. and Heartis Inc.

- iii -

Signatures

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: February 22, 2008


GungHo Online Entertainment, Inc.

By:		/s/ Kazuki Morishita
Name:		Kazuki Morishita
Title:		President & CEO

Schedule I

Directors and Executive Officers of

GungHo Online Entertainment, Inc.

The name, present principal occupation or employment, and the name of any corporation or other organization in which such employment is conducted, of each of the directors and executive officers of GungHo Online Entertainment, Inc. is set forth below. Except as set forth below, each of the directors and executive officers is a citizen of Japan. Each occupation or employment set forth opposite a director’s name refers to such director’s principal occupation or employment, which, unless otherwise noted is with GungHo Online Entertainment, Inc. If no address is given, the director’s principal business address is 2-2 Yurakucho 1-chome, Chiyoda-ku, Tokyo 100-0006, Japan.


Name		Present Principal Occupation or Employment
Taizo Son (citizen of Korea)		Chairman

Kazuki Morishita		President & CEO

Hiroshi Matsuzaka		Director

Seiichi Hori		Director

Kazuya Sakai		Director

Yoshinori Kitamura		Director

Tomoya Hirota		Director

Katsumasa Niki		Director Principal Occupation: Group Manager Investment Planning Group Finance SOFTBANK CORP. Tokyo Shiodome Building 9-1 Higashi-Shimbashi 1-chome, Minato-ku Tokyo 105-7303, Japan

Yoichiro Ando		Full-time Auditor

Hiroto Uehara		Auditor, Principal Occupation: Representative, MA Partners Accounting Firm Yoyu Kanda Building 6F 8-4 Kanda-Sudacho 1-chome, Chiyoda-ku Tokyo 101-0041, Japan

Toshiro Kaba		Auditor, Principal Occupation: Representative, Shiroyama-Tower Law Office Shiroyama Trust Tower 31F 3-1 Toranomon 4-chome, Minato-ku Tokyo 105-6031, Japan

EX-99.A 2 dex99a.htm SHARE SUBSCRIPTION AGREEMENT Share Subscription Agreement

Exhibit A

[Translation]

Share Subscription Agreement

GungHo Online Entertainment, Inc. (“GOE”) enters into this agreement (this “Agreement”) as follows with Heartis Inc. (“Heartis”) regarding subscription of 24,308 shares of common stock outlined in Schedule 1 to be newly issued based on the resolution at the board of directors held on February 14, 2008 by way of third party allotment.

Article 1

Issuance of New Shares

GOE shall newly issue 24,308 shares of common stock (the “Newly Issued Shares”) by way of third party allotment as outlined in Schedule 1 in accordance with the provisions of this Agreement, and Heartis shall subscribe all Newly Issued Shares.

Article 2

Contribution on Contribution Date

Heartis shall obtain the property specified in “4.” in Schedule 1 by April 1, 2008 (the “Contribution Date”) and shall contribute it to GOE on Contribution date.

Article 3

Indemnification

Heartis shall indemnify GOE at GOE’s request for any damage, losses or expenses incurred by GOE as a result of or in connection with breach of Heartis’s obligation of the preceding article.

Article 4

Governing Law and Language

1.	This Agreement shall be governed under, and construed in accordance with, the laws of Japan.

2.	This Agreement has been prepared in the Japanese language.

Article 5

Jurisdiction

The parties to this Agreement agree that the Tokyo District Court has the exclusive jurisdiction as the court of first instance with regards to any dispute concerning this Agreement.

- 1 -

Article 6

Good Faith Consultation

Each party to this Agreement agrees to consult in good faith to resolve any matter not set out in this Agreement in accordance with the objective of this Agreement.

[Remainder of page intentionally blank.]

- 2 -

This Agreement is prepared in duplicate, and GOE and Heartis shall each retain one original copy.

February 14, 2008


GOE:		1-2-2 Yurakucho, Chiyoda-ku, Tokyo
		GungHo Online Entertainment, Inc.
		President & CEO Kazuki Morishita [Seal]

Heartis:		8-16 Shinsencho, Shibuya-ku, Tokyo Heartis Inc.
		CEO Taizo Son [Seal]

- 3 -

Schedule 1

Outline of Newly Issued Shares


1. Number of Newly Issued Shares		24,308 shares of common stock

2. Allocation method		Third party allotment to Heartis

3. Calculation method of price		Price shall be determined as a quotient of maximum amount of capital increase based on a calculation in compliance to Ordinance of Company Act, Article 37 (1) divided by 24,308.

4. The contributed property is 3,640,619 shares of common stock (value: 4,035,180,549 yen in total) of Gravity Co., Ltd. (address of the main office: Nuritkum Square Business Tower 15F, 1605, Sangam-Dong, Mapo-Gu, Seoul, Korea).

5. Amount of capital and capital reserve to be increased		Amount of capital to be increased shall be a roundup amount of half of maximum of capital increase based on a calculation in compliance to Ordinance of Company Act, Article 37 (1). Amount of capital reserve to be increased shall be a rounddown amount of half of maximum of capital increase based on a calculation in compliance to Ordinance of Company Act, Article 37 (1).

6. Contribution Date of the property as stated in 4 above		April 1, 2008 (Tue)

7. Each item above is conditional on the effectiveness of a registration statement with respect to the Newly Issued Shares in accordance with Financial Instruments and Exchange Law.

- 4 -

-----END PRIVACY-ENHANCED MESSAGE-----