Bam! Entertainment, Inc., Form S-3

333 West Santa Clara Street, Suite 716
San Jose, California 95113
Telephone (408) 298-7500
(Address of Principal Executive Offices and Zip Code)

Raymond C. Musci
Chief Executive Officer
333 West Santa Clara Street, Suite 716
San Jose, California 95113
Telephone (408) 298-7500
(Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service)

Thomas J. Poletti, Esq.
Ted Weitzman, Esq.
Kirkpatrick & Lockhart LLP
10100 Santa Monica Blvd., 7th Floor
Los Angeles, CA 90067
Telephone (310) 552-5000
Facsimile (310) 552-5001

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.

If the only securities being registered on this Form are to be offered pursuant to dividend or interest reinvestment plans, please check the following box. o

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o


				Proposed		Proposed
				Maximum		Maximum
		Amount to be		Offering Price		Aggregate		Amount of
Title of each class of securities to be registered		Registered		per Share		Offering Price		Registration Fee

Common Stock, $.001 par value (1)			587,605	$	1.10	$	646,366	$	82
Common Stock, $.001 par value (2)			1,942,500		1.87		3,632,475		460
Common Stock, $.001 par value (3)			1,040,229		1.87		1,945,228		246
Common Stock, $.001 par value (4)			120,929		1.10		133,022		17
Common Stock, $.001 par value (5)			2,532,522		1.10		2,785,774		353
Common Stock, $.001 par value (6)			1,519,513		1.40		2,127,318		270
Common Stock, $.001 par value (7)			2,467,478		1.10		2,714,226		344
	Total Registration Fee		10,210,776					$	1,772

Pursuant to Rule 429 under the Securities Act of 1933, the prospectus included in this Registration Statement is a combined prospectus and relates to this Registration Statement and Registration Statement (File No. 333-110063), pursuant to which 3,691,263 shares of common stock remain eligible for resale. This Registration Statement also constitutes Post-Effective Amendment No. 1 to the Registration Statement (File No. 333-110063).

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registration shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

(1)		The shares of common stock being registered hereunder are being registered for resale by the selling stockholders named in the prospectus who were issued the shares in a private offering that was completed on October 1, 2003 or upon the subsequent exercise in January 2004 of additional investment rights that were issued in the private offering, with such shares remaining eligible for resale as of the date of this registration statement. The price of $1.10, which is the average of the high and low prices of the Registrant’s common stock on the Nasdaq Stock Market on February 10, 2004, is set forth solely for the purpose of computing the registration fee pursuant to Rule 457(c).

(2)		The shares of common stock being registered hereunder are being registered for resale by the selling stockholders named in the prospectus upon exercise of outstanding warrants that were issued in a private offering that was completed on October 1, 2003 or that were issued upon the subsequent exercise in January 2004 of additional investment rights that were issued in the private offering. In accordance with Rule 416(a), the Registrant is also registering hereunder an indeterminate number of shares that may be issued and resold to prevent dilution resulting from stock splits, stock dividends or similar transactions. The price of $1.87, which is the price at which the warrants may be exercised, is set forth solely for the purpose of computing the registration fee pursuant to Rule 457(g).

(3)		The shares of common stock being registered hereunder are being registered for resale by the selling stockholders named in the prospectus upon exercise of warrants that were issued upon exercise of certain of the additional investment rights that were issued in a private offering that was completed on October 1, 2003. In accordance with Rule 416(a), the Registrant is also registering hereunder an indeterminate number of shares that may be issued and resold to prevent dilution resulting from stock splits, stock dividends or similar transactions. The price of $1.87, which is the price at which the warrants may be exercised, is set forth solely for the purpose of computing the registration fee pursuant to Rule 457(g).

(4)		The shares of common stock being registered hereunder are being registered for resale by the selling stockholders named in the prospectus upon exercise of additional investment rights that were issued in the private offering that was completed on October 1, 2003 but which have not been exercised as of the date of this registration statement. In accordance with Rule 416(a), the Registrant is also registering hereunder an indeterminate number of shares that may be issued and resold to prevent dilution resulting from stock splits, stock dividends or similar transactions. The price of $1.10, which is the average of the high and low prices of the Registrant’s common stock on the Nasdaq Stock Market on February 10, 2004, is set forth solely for the purpose of computing the registration fee pursuant to Rule 457(g).

(5)		The shares of common stock being registered hereunder are being registered for resale by the selling stockholders named in the prospectus who were issued the shares in a private offering that was completed on January 29, 2004. The price of $1.10, which is the average of the high and low prices of the Registrant’s common stock on the Nasdaq Stock Market on February 10, 2004, is set forth solely for the purpose of computing the registration fee pursuant to Rule 457(c).

(6)		The shares of common stock being registered hereunder are being registered for resale by the selling stockholders named in the prospectus upon exercise of outstanding warrants that were issued in a private offering that was completed on January 29, 2004. In accordance with Rule 416(a), the Registrant is also registering hereunder an indeterminate number of shares that may be issued and resold to prevent dilution resulting from stock splits, stock dividends or similar transactions. The price of $1.40, which is the price at which the warrants may be exercised, is set forth solely for the purpose of computing the registration fee pursuant to Rule 457(g).

(7)		The shares of common stock being registered hereunder are being registered for resale by the selling stockholders named in the prospectus upon exercise of additional investment rights that were issued in a private offering that was completed on January 29, 2004. In accordance with Rule 416(a), the Registrant is also registering hereunder an indeterminate number of shares that may be issued and resold to prevent dilution resulting from stock splits, stock dividends or similar transactions. The price of $1.10, which is the average of the high and low prices of the Registrant’s common stock on the Nasdaq Stock Market on February 10, 2004, is set forth solely for the purpose of computing the registration fee pursuant to Rule 457(g).

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement relating to these securities that has been filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

This prospectus relates to 10,210,776 shares of common stock of BAM! Entertainment, Inc. that may be sold from time to time by the selling stockholders named on page 18 of this prospectus. The selling stockholders may offer their shares through public or private transactions, in or off the over-the-counter market in the United States, at prevailing market prices, or at privately negotiated prices. For details of how the selling stockholders may offer their shares of common stock, please see the section of this prospectus called “Plan of Distribution.” We will not receive any proceeds from the sales by the selling stockholders.

Our common stock is traded on the Nasdaq SmallCap Market under the symbol “BFUN.” On February 10, 2004, the last reported sale price for our common stock on the Nasdaq SmallCap Market was $1.08 per share.

The securities offered by this prospectus involve a high degree of risk. See “Risk Factors” beginning on page 6.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

You should rely only on the information contained or incorporated by reference in this prospectus or any prospectus supplement. We have not authorized anyone to provide you with information different from that contained or incorporated by reference into this prospectus. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representation. You should assume that the information contained in this prospectus or any prospectus supplement is accurate only as of the date on the front of the document and that any information contained in any document we have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or any prospectus supplement or any sale of a security. These documents are not an offer to sell or a solicitation of an offer to buy these shares of common stock in any circumstances under which the offer or solicitation is unlawful.

This summary highlights some information from this prospectus, and it may not contain all of the information that is important to you. You should read the following summary together with the more detailed information regarding our company and the shares being sold in this offering, including “Risk Factors” and our consolidated financial statements and related notes, included elsewhere in, or incorporated by reference into, this prospectus.

We develop and publish interactive entertainment software products. We currently publish titles for interactive entertainment hardware platforms, such as Sony’s PlayStation and PlayStation 2, Nintendo’s Gamecube, Nintendo 64, Game Boy Color and Game Boy Advance, Microsoft’s Xbox, portable handheld devices manufactured by Palm and Handspring, and for personal computers or PCs. We were incorporated in California in October 1999 under the name Bay Area Multimedia, Inc. We reincorporated in Delaware in September 2000 and changed our name to BAM! Entertainment, Inc. in December 2000. We commenced operations in October 1999 and shipped our first products in June 2000.

We license properties from a wide variety of sources, and publish titles based on the motion picture, sports and television properties of our licensors. We have entered into strategic license arrangements with entertainment and media companies that have developed well-known characters and brands and that are producing popular properties that are expected to form the basis of some of our future products.

We have offices in both the United States and Europe. International operations outside of North America are conducted through our office in England, where we perform international sales and marketing activities and manage local third-party developers. Domestically, we sell our products to mass merchandisers such as Toys “R” Us, Target, Kmart, Wal-Mart and Best Buy, specialty chains such as GameStop and Electronics Boutique, and independent distributors. Internationally, we sell our products through mass merchandisers, distributors and sub-distributors. Our products are manufactured exclusively by third parties.

We have experienced recurring net losses from inception (October 7, 1999) through September 30, 2003. During the three months ended September 30, 2003, we used cash in operating activities of $3.0 million and incurred a net loss of $1.7 million. As of September 30, 2003, we had cash and cash equivalents of $617,000 and an accumulated deficit of $61.5 million. These factors, among others, raise substantial doubt about our ability to continue as a going concern for a reasonable period of time.

We will need to raise additional funds in order to satisfy our future liquidity requirements. These funds may come from either one or a combination of additional financings, exercise of outstanding warrants and additional investment rights, mergers or acquisitions, or via the sale or license of certain of our assets. Current market conditions present uncertainty as to our ability to secure additional financing or effectuate any merger or acquisition, as well as our ability to reach profitability. There can be no assurances that we will be able to secure additional financing or effectuate any such merger or acquisition, or obtain favorable terms on such financing if it is available, or as to our ability to achieve positive cash flow from operations. Continued negative cash flows create significant uncertainty about our ability to implement our operating plan and we may have to further reduce the scope of our planned operations. If cash and cash equivalents, together with cash generated from operations, are insufficient to satisfy our liquidity requirements, we will not have sufficient resources to continue operations for the next six months.

On October 1, 2003, we completed the sale of 1,850,000 shares of our common stock and warrants to purchase another 1,665,000 shares of our common stock, resulting in gross proceeds (assuming no exercise of the warrants) of $1,776,000, in a private offering to institutional and accredited investors. The warrants have a five-year term and are exercisable at $1.87 per share. Certain placement agents utilized in connection with the private offering were issued warrants to purchase 277,500 shares of our common stock having identical terms as the warrants issued to the investors, except that these warrants are subject to a 180 day lock-up provision. We also issued to the investors additional investment rights to purchase an additional 1,111,625 shares of our common stock and warrants to purchase another 1,000,462 shares of our common stock. These additional investment rights are in fact options to purchase common stock and warrants together as a unit, not separately, at the prices described below. The shares of common stock underlying the additional investment rights are purchasable at $0.96 per share and the warrants underlying the additional investment rights have a five-year term and are exercisable at the greater of (i) $1.87 and (ii) the lesser of (x) the closing bid price of our common stock on the Nasdaq Stock Market on the business day immediately preceding the exercise date of the additional investment right, and (y) the average of the closing bid price of our common stock on the Nasdaq Stock Market for the five business days immediately preceding the exercise date of the additional investment right. The additional investment rights are exercisable until 45 business days after the effectiveness of this registration statement.

In January 2004, certain of the investors in the private offering that was completed on October 1, 2003 exercised their respective additional investment rights, resulting in gross proceeds (assuming no exercise of the underlying warrants) of approximately $950,000. These investors were issued 990,696 shares of our common stock and warrants to purchase 891,626 shares of our common stock, which are exercisable on the terms stated above. The placement agents utilized in connection with the private offering were issued warrants to purchase 148,603 shares of our common stock having identical terms as the warrants issued to the investors, except that these warrants are subject to a 180 day lock-up provision. Additional investment rights to purchase (i) 120,929 shares of our common stock and (ii) warrants to purchase another 108,836 shares of our common stock remain exercisable until March 11, 2004.

On January 29, 2004, we completed the sale of 2,532,522 shares of our common stock and warrants to purchase another 1,519,513 shares of our common stock, resulting in gross proceeds (assuming no exercise of the warrants) of $2,329,920, in a private offering to institutional and accredited investors. The warrants have a five-year term and are exercisable at $1.40 per share. We also issued to the investors additional investment rights to purchase an additional 2,467,478 shares of our common stock and warrants to purchase another 1,480,487 shares of our common stock. These additional investment rights are in fact options to purchase common stock and warrants together as a unit, not separately, at the prices described below. The shares of common stock underlying the additional investment rights are purchasable at $0.92 per share and the warrants underlying the additional investment rights have a five-year term and are exercisable at the greater of (i) $1.40 and (ii) the lesser of (x) the closing bid price of our common stock on the Nasdaq Stock Market on the business day immediately preceding the exercise date of the additional investment right, and (y) the average of the closing bid price of our common stock on the Nasdaq Stock Market for the five business days immediately preceding the exercise date of the additional investment right. The additional investment rights are exercisable until 45 business days after the effectiveness of this registration statement.

This prospectus relates to the resale from time to time of up to a total of 10,210,776 shares of our common stock by the selling stockholders, comprising:

•

587,605 shares of our common stock, which remain eligible for sale, issued (i) on October 1, 2003 or (ii) upon exercise of additional investment rights that were issued issued on October 1, 2003;

•

2,982,729 shares of our common stock, which remain eligible for resale, issuable upon exercise of warrants (i) issued on October 1, 2003 or (ii) upon the subsequent exercise in January 2004 of additional investment rights issued on October 1, 2003;

•

120,929 shares of our common stock, which remain eligible for resale, issuable upon exercise of additional investment rights issued on October 1, 2003 but which have not been exercised as of the date of this registration statement;

•

3,986,991 shares issuable upon exercise of the warrants and additional investment rights issued on January 29, 2004 (but excluding the shares issuable upon exercise of the warrants underlying the additional investment rights).

We granted to any of the investors in the private offering that was completed on October 1, 2003 rights of first refusal with respect to certain issuances of our securities for periods of up to two years following the effective date of the registration statement (file no. 333-110063), which was declared effective on January 6, 2004.

This prospectus and the documents and information incorporated by reference in this prospectus, such as from “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2003, and that from “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Quarterly Report on Form 10-Q for the three month ended September 30, 2003, include “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include the information concerning our possible or assumed future operating results, business strategies, financing plans, competitive position, industry environment, the anticipated impact on our business and financial results of recent and future acquisitions, the effects of competition, our ability to produce new products in a cost-effective manner and estimates relating to our industry. Forward-looking statements may be identified by the use of words like “believes,” “intends,” “expects,” “may,” “will,” “should” or “anticipates,” or the negative equivalents of those words or comparable terminology, and by discussions of strategies that involve risks and uncertainties.

Actual results may differ materially from those expressed or implied by forward-looking statements for a number of reasons, including those appearing elsewhere in this prospectus under the heading “Risk Factors.” In addition, we base forward-looking statements on assumptions about future events, which may not prove to be accurate. In light of these risks, uncertainties and assumptions, you should be aware that the forward-looking events described in this prospectus and the documents incorporated by reference in this prospectus may not occur.

You should carefully consider and evaluate all of the information contained or incorporated by reference in this prospectus, including the following risk factors, before deciding to invest in our notes. Any of these risks could materially and adversely affect our business, financial condition and results of operations, which in turn could adversely affect the price of the notes and our common stock.

If we are unable to successfully obtain additional financing or enter into a merger or acquisition, we may not have sufficient cash to continue operations for the next six months.

Although we raised gross proceeds of approximately (i) $1.8 million through the sale of our common stock, warrants and additional investment rights on October 1, 2003, (ii) $1.5 million through the sale of a promissory note and warrants on December 4, 2003, (iii) $950,000 in January 2004 through the exercise of certain additional investment rights that were sold on October 1, 2003 and (iv) $2.3 million through the sale of our common stock, warrants and additional investment rights on January 29, 2004, we will need to raise additional funds. These funds may come from either one or a combination of additional financings, exercise of outstanding warrants and additional investment rights, mergers or acquisitions, or otherwise obtain capital via sale or license of certain of our assets, in order to satisfy our future liquidity requirements. Current market conditions present uncertainty as to our ability to secure additional financing or effectuate any merger or acquisition, as well as our ability to reach profitability. There can be no assurances that we will be able to secure additional financing or effectuate any such merger or acquisition, or obtain favorable terms on such financing if it is available, or as to our ability to achieve positive cash flow from operations. Continued negative cash flows create significant uncertainty about our ability to implement our operating plan and we may have to further reduce the scope of our planned operations. If cash and cash equivalents, together with cash generated from operations, are insufficient to satisfy our liquidity requirements, we will not have sufficient resources to continue operations for the next six months.

Because we have a limited operating history, it is difficult to evaluate an investment in our common stock.

We were organized in October 1999 and released our first interactive entertainment software product in June 2000. It is difficult to evaluate our future prospects and an investment in our common stock because we have a limited operating history and the market for our products is rapidly evolving. Our prospects are uncertain and must be considered in light of the risks, expenses and difficulties frequently encountered by companies in the early stage of development.

Our future performance will depend upon a number of factors, including our ability to:

•

develop and enhance products in response to new interactive entertainment hardware platform releases, customer demand and competitive market conditions;

•

expand our interactive entertainment software development and sales and marketing capabilities;

We incurred net losses of $1.7 million for the three months ended September 30, 2003, $36.2 million for the year ended June 30, 2003, $15.7 million for the year ended June 30, 2002 and $1.6 million for the year ended June 30, 2001. We will need to generate significant revenues and control expenses to achieve profitability. There can be no assurance that our revenues will grow in the future or that we will achieve sufficient revenues for profitability. If we fail to achieve profitability, or sustain or increase profitability if we achieve it, this will have a negative impact on our operating results.

Our revenues fluctuate due to seasonal demand and the nature of the interactive entertainment industry.

We have experienced and may continue to experience significant quarterly fluctuations in net sales and operating results. The interactive entertainment industry is highly seasonal, with sales typically higher during the fourth and first calendar quarters. This is due primarily to the increased demand for games during and immediately following the holiday buying season. Our failure or inability to introduce products on a timely basis to meet seasonal fluctuations in demand will, and historically have, harmed our business and operating results.

Our operating results would be, and historically have been, harmed by a decrease in sales, price erosions, and a failure to meet our sales expectations. Uncertainties associated with interactive entertainment software development, lengthy manufacturing lead times, production delays and the approval process for products by hardware manufacturers and other licensors make it difficult to predict the quarter in which our products will ship.

These and other factors could harm our business and have a material adverse effect on our operating results.

Product development schedules are frequently unpredictable, which may result in revenues and earnings not meeting analysts’ expectations.

Product development schedules for software products, particularly for new hardware platforms such as Sony’s PlayStation 2, Nintendo’s GameCube and Microsoft’s Xbox, are difficult to predict because they involve creative processes, use of new development tools for new platforms and the learning process, research and development, and experimentation associated with development for new technologies. Our revenues and earnings are dependent on our ability to meet our product release schedules, and our failure to meet those schedules have resulted in, and may again result in, revenues and earnings that fall short of analysts’ expectations for any individual quarter and the fiscal year.

Our earnings will be affected upon the issuance of shares of our common stock pursuant to third-party entertainment property license agreements.

Pursuant to a license agreement with a production company, we are obligated to issue 68,738 shares of our common stock after the release of any film for which we elect to produce interactive entertainment software products, up to 10 films or 687,375 shares of common stock. To date, we have elected to produce titles for three films and have issued 137,476 shares under this agreement for an aggregate value

of $816,000. We are required to issue these shares when the films are released and will then incur a non-cash charge. We cannot estimate the aggregate dollar amount of these future non-cash charges as they will be based on our share price at a future point in time, but they may be substantial. All of the non-cash charges on the shares issued to date under the agreement had been amortized as of September 30, 2003.

In connection with the issuance of warrants pursuant to a separate license agreement with another production company, we incurred a non-cash charge of $97,000. We had amortized $8,000 of this charge as of June 30, 2003. The remaining charge will be amortized upon release of the software products on which the warrants are issued, over the life of the products, expected to be between three and six months commencing upon release of the products, which occurred in September 2003. As of September 30, 2003, we had amortized $12,000 of this charge. Under the agreement, additional warrants to purchase up to an additional 15,000 shares may be issued, contingent upon certain future events occurring. Upon issuance of the warrants we will incur an additional non-cash charge. We cannot estimate the aggregate dollar amount of these future non-cash charges as they are based on our share price at future points in time. Each of these future charges will affect our gross margins and profitability.

In connection with the issuance of warrants pursuant to a first look agreement with another production company, we granted a warrant to purchase up to 200,000 shares of our common stock, of which 15,000 became immediately exercisable upon the signing of the agreement. The remaining 185,000 will only become exercisable, in multiples of either 4,625 or 13,875 shares, upon certain future events occurring relating to the development and release of products. Upon the warrant for 15,000 shares becoming exercisable, we incurred a non-cash charge of $29,000, which has been fully amortized as of June 30, 2003. We will incur additional non-cash charges as the remaining 185,000 shares become exercisable. Upon release of the software products on which the warrants are exercisable, we will amortize the non-cash charges over the life of the products, which are expected to be between three and six months. We cannot estimate the aggregate dollar amount of these future non-cash charges as they will be based on our share price at future points in time. Each of these future charges will affect our gross margins and profitability.

Our ability to effectuate additional financing transactions to fund our operations could impair the value of your investment.

Although we raised gross proceeds of approximately (i) $1.8 million through the sale of our common stock, warrants and additional investment rights on October 1, 2003, (ii) $1.5 million through the sale of a promissory note and warrants in December 2003, (iii) $950,000 in January 2004 through the exercise of certain additional investment rights that were sold on October 1, 2003 and (iv) $2.3 million through the sale of our common stock, warrants and additional investment rights on January 29, 2004, if we are not acquired by or merge with another entity or if we are not able to raise additional capital via sale or license of certain of our assets, we will need to consummate additional financing transactions pursuant to which we receive additional liquidity. These additional financings will likely take the form of us raising additional capital through either one or a combination of public or private equity offerings or debt financings and the exercise of outstanding warrants and additional investment rights. To the extent we raise additional capital by issuing equity securities, our stockholders will likely experience substantial dilution. Also, any new equity securities may have greater rights, preferences or privileges than our existing common stock.

We cannot assure you that we will be able to meet our future capital requirements.

If we are not acquired by or merge with another entity or if we are not able to raise additional capital via sale or license of certain of our assets, we will need to consummate additional financing transactions

pursuant to which we receive additional liquidity. We cannot be certain that additional capital will be available to us on favorable terms, or at all. If we cannot effectuate financing transactions to raise needed funds on acceptable terms, we will not be able to develop or enhance our products, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements. A material shortage of capital will require us to take drastic steps such as reducing our level of operations, disposing of selected assets or seeking protection under federal bankruptcy laws.

We depend on a relatively limited number of products for a significant portion of our revenues.

A significant portion of our revenues is derived each quarter from a relatively limited number of products that were released in that quarter or the or in the immediately preceding quarter. During the year ended June 30, 2003, sales of four products each accounted for between 9% and 13% of our net revenues. During the three months ended September 30, 2003, sales of four products each accounted for between 9% and 41% of our net revenues, during the year ended June 30, 2002, sales of four products each accounted for between 7% and 11% of our net revenues, while during the year ended June 30, 2001, sales of four products each accounted for between 14% and 28% of our net revenues. We expect that a limited number of products will continue to produce a disproportionately large amount of our net revenues. Due to this dependence on a limited number of brands, the failure of one or more products to achieve anticipated results could, and in the past has, significantly harmed our business and operating results.

We cannot assure you that new products introduced by us will achieve significant market acceptance and be sufficient in order for us to achieve profitability.

The interactive entertainment software market is characterized by short product life cycles, continually changing consumer preferences that are difficult to predict and frequent introduction of new products. The life cycle of a game generally consists of a relatively high level of sales during the first few months after introduction, followed by a decline in sales, and sales price erosion. Even the most successful titles remain popular for only limited periods of time, often less than six months. We believe that our success will be dependent on the production of successful titles on a continuous basis. We cannot assure you that new products introduced by us will achieve significant market acceptance or that such acceptance, if achieved, will be sufficient in order for us to achieve profitability.

The development cycle for new titles is long and during this time the market appeal of a title may decline.

We believe the development cycle for new titles is long, typically ranging from 12 to 24 months. After development of the initial product, we believe it may take between six and 12 additional months to develop the product for additional hardware platforms. In order to distribute a product, we must develop and test the necessary game software, obtain approval from the manufacturer and licensor if required, and have the initial order of cartridges or disks manufactured. During the development cycle, the market appeal of a title or of a property on which the title is based may decline. If market acceptance is not achieved, we may, and historically have, granted markdown allowances to maintain our relationship with retailers and our access to distribution channels. Because we introduce a relatively limited number of new products in a given period, the failure of one or more of our products to achieve market acceptance could and have harmed our business.

The introduction of new interactive entertainment hardware platforms creates risks relating to the development of titles for those hardware platforms.

The interactive entertainment industry is also characterized by rapid technological change. For example, the 128-bit hardware platform was released within five years of the release of the 64-bit hardware platform. As a result, we must continually anticipate these changes and adapt our offerings to emerging

hardware platforms and evolving consumer preferences. Generally, because of the length of the development cycle, our development efforts must begin well in advance of the release of new hardware platforms in order to introduce titles on a timely basis with the release of such hardware platforms. Further, we have no control over the release dates of new hardware platforms or the number of units that will be shipped upon such release. It is difficult to ensure that our schedule for releasing new titles will coincide with the release of the corresponding hardware platforms. Additionally, if fewer than expected units of a new hardware platform are produced or shipped, such as occurred with Microsoft’s Xbox and Nintendo’s Gamecube and Game Boy Advance, developers of titles for those hardware platforms may experience lower than expected sales.

The introduction of new hardware platforms and technologies can also render existing titles obsolete and unmarketable. Generally, as more advanced hardware platforms are introduced, consumer demand for titles for older hardware platforms diminishes. In addition, a broad range of competing and incompatible emerging technologies may lead consumers to postpone buying decisions until a particular hardware platform gains widespread acceptance. As a result of such reduced consumer demand for titles on older hardware platforms, our titles for older hardware platforms may not generate sufficient sales to make our titles profitable.

The development of software products is complex and time consuming and may not lead to marketable titles.

The development of software products is complex and time consuming. Our development efforts may not lead to marketable titles or titles that generate sufficient revenues to recover their development and marketing costs, especially if a hardware platform does not reach or sustain an expected level of acceptance. This risk may increase in the future, as continuing increases in development costs require corresponding increases in net sales in order for us to achieve profitability.

The technological advancements of the most popular hardware platforms also allow more complex software products. As software products become more complex, the risk of undetected errors in products when first introduced increases. We cannot assure you that, despite testing, errors will not be found in new products or releases after shipments have been made, resulting in loss of or delay in timely market acceptance, product returns, loss of revenues and damage to our reputation. In the past, we have experienced delays in the introduction of new titles and we anticipate that we will experience similar delays in the future in connection with the introduction of additional new titles, including products currently under development. Because net revenues associated with the initial shipments of a new product generally constitute a high percentage of the total net revenues associated with the life of a product, any delay in the introduction of, or the presence of a defect in, one or more new products could harm the ultimate success of the products or our business and operating results.

The costs of developing and marketing products for existing and anticipated interactive entertainment hardware platforms can be substantial and could negatively impact our results of operations.

The costs associated with the introduction of products for new hardware platforms, such as Sony’s PlayStation 2, Nintendo’s GameCube and Microsoft’s Xbox, could harm our business as we believe the costs of developing and publishing titles for these hardware platforms require greater financial and technical resources than prior development and publishing efforts. Additionally, during periods of new technology introductions, forecasting our revenues and earnings is more difficult than in more stable or rising product markets.

If interactive entertainment hardware platforms fail to achieve significant market acceptance, it may harm our sales and results of operations.

Our sales are dependent on, among other factors, the popularity and unit sales of the interactive entertainment hardware platforms of the various manufacturers. The interactive entertainment industry has experienced periods of significant growth in consumer interest and popularity, followed by periods in which consumer demand for interactive entertainment products has slowed. Unexpected shortfalls in the market acceptance of a particular hardware platform, such as occurred with Microsoft’s Xbox and Nintendo’s Gamecube and Game Boy Advance, can and have significantly harmed consumer demand for titles released or scheduled for release for that hardware platform. Therefore, we are dependent upon the successful marketing efforts of the manufacturers of the various hardware platforms to meet financial expectations.

Over 98% of our net revenues are derived from sales to our three largest customers. We could be adversely affected if any of them reduced or terminated their purchases from us or did not pay their obligations to us.

Revenues from our three largest customers collectively accounted for 98% of our net revenues for the three months ended September 30, 2003, as compared to 34% of our net revenue for the three months ended September 30, 2002. Revenues from our four largest customers collectively accounted for 48% of our net revenues for the year ended June 30, 2003, as compared to 48% of our net revenues for the year ended June 30, 2002, and 52% of our revenues for the year ended June 30, 2001. As of September 30, 2003, four customers each accounted for between 5% and 28% of our gross trade accounts receivable, as of June 30, 2003, four customers each accounted for between 8% and 19% of our gross trade accounts receivable, as of June 30, 2002, four customers each accounted for between 8% and 12% of our gross trade accounts receivable and as of June 30, 2001, four customers each accounted for between 9% and 23% of our gross trade accounts receivable. We have no written agreements or other understandings with any of our customers that relate to future purchases. Therefore, purchases by these customers or any others could be reduced or terminated at any time. A substantial reduction or a termination of purchases by any of our largest customers would negatively impact us.

Substantially all of our sales are made on credit, which exposes us to bad debt risk.

Our sales are typically made on credit, with terms that vary depending upon the customer and other factors. While we attempt to carefully monitor the creditworthiness of our customers and distributors, we bear the risk of their inability to pay our receivables and of any delay in payment. A business failure by any of our largest customers, such as occurred with Kmart in January 2002, would negatively impact us, as could a business failure by any of our distributors or other retailers.

Product returns and markdown allowances could negatively impact our business.

We have experienced, and are exposed to the risk of product returns and markdown allowances with respect to our customers. The decrease in demand for products based upon older hardware platforms may lead to a high level of these product returns and markdown allowances. We also allow distributors and retailers to return defective and damaged products in accordance with negotiated terms. Product returns and markdown allowances that exceed our expectations could negatively impact our business.

We cannot publish our interactive entertainment software titles without the approval of hardware manufacturers. Our ability to continue to develop and market our titles is dependent on the hardware manufacturers continuing to do business with us.

We are wholly dependent on the manufacturers of interactive entertainment hardware platforms and our ability to obtain or maintain non-exclusive licenses with them, both for the rights to publish and to manufacture titles for their hardware platforms. We are required to obtain a license to develop and publish titles for each hardware platform for which we develop and publish titles. Each license specifies the territory to which it applies, and such licenses range from as broad as multi-national distribution to as narrow as approval on a title-by-title basis. Our existing hardware platform licenses for Sony’s PlayStation and PlayStation 2, Nintendo’s Game Boy Color and Game Boy Advance, Nintendo 64, Nintendo GameCube, and Microsoft’s Xbox require that we obtain approval for the publication of new titles on a title-by-title basis. As a result, the number of titles we are able to publish for these hardware platforms, along with our ability to time the release of these titles is dependent upon decisions made by third party manufacturers. Accordingly, our revenues from titles for these hardware platforms may be limited. Should any manufacturer choose not to renew or extend our license agreement at the end of its current term, or if the manufacturer were to terminate our license for any reason, we would be unable to publish additional titles for that manufacturer’s hardware platform.

We are dependent on Sony and Nintendo for the manufacture of products that we develop for their hardware platforms.

When we develop interactive entertainment software titles for a hardware platform offered by Sony or Nintendo, the products are manufactured exclusively by that hardware manufacturer. Our hardware platform licenses with Sony and Nintendo provide that the manufacturer may change prices for the manufacturing of products at any time. In addition, these licenses include other provisions that give the manufacturer substantial control over our costs and the release of new titles. Since each of the manufacturers is also a publisher of games for its own hardware platforms and manufactures products for all of its other licensees, a manufacturer may give priority to its own products or those of our competitors in the event of insufficient manufacturing capacity. We would be materially harmed by unanticipated delays in the manufacturing and delivery of products.

If we cannot retain our key personnel and attract and retain additional key personnel, our business will be harmed.

We depend to a significant extent on the contributions and industry experience of our key personnel, in particular our Chief Executive Officer, Raymond C. Musci, and our Vice Chairman, Anthony R. Williams. If we fail to retain the services of our key personnel, our ability to secure additional licenses and develop and sell new products might be impaired. In addition, our future success will also depend upon our ability to continue to attract, motivate and retain highly qualified employees and third-party contractors, particularly software design and development personnel and outside sales representatives. Competition for highly skilled employees is intense and we may not be successful in attracting and retaining such personnel.

We are dependent upon licenses to properties originated and owned by third parties for the development of our titles.

Many of our titles, such as those from our Powerpuff Girls series, Dexter’s Laboratory series, Ecks v Sever and Reign of Fire are based upon entertainment properties licensed from third parties. We cannot assure you that we will be able to obtain new licenses, or renew existing ones, on reasonable terms, if at all. If we are unable to obtain licenses for the properties which we believe offer significant consumer

appeal, we would be required to obtain licenses for less popular properties or would have to develop all of our titles based upon internally developed concepts.

To the extent a licensed property is less popular than we anticipate, or is unsuccessful, sales of titles based on that property may be negatively impacted.

We have in the past experienced unsuccessful releases of titles based on properties that we licensed from third parties. Titles based on less popular properties, or on internally developed concepts, typically require greater marketing expense in order to establish brand identity and may not achieve broad market acceptance or prove to be successful.

We are dependent on third-party interactive entertainment software developers for developing and completing our titles.

We rely on third-party interactive entertainment software developers for the development of our interactive entertainment software titles. Quality third-party developers are continually in high demand. For this reason, we cannot assure you that the third-party software developers who have developed titles for us in the past will continue to be available to develop software for us in the future. Due to the limited number of third-party software developers and the lack of control that we exercise over them, we cannot assure you that these developers will complete titles for us on a timely basis or within acceptable quality standards, if at all.

Our future success is highly dependent on our proprietary software and intellectual property.

We rely primarily on a combination of copyright, trademark and trade secret laws, employee and third-party nondisclosure agreements and other methods to protect our proprietary rights. We require our employees, consultants and other outside individuals and entities to execute confidentiality and nondisclosure agreements upon the start of employment, consulting or other contractual relationships with us. However, our ability to police these individuals and entities and enforce these agreements is costly and uncertain. We are aware that unauthorized copying occurs within our industry. If a significantly greater amount of unauthorized copying of our interactive entertainment software products were to occur, our business would be harmed. We generally obtain ownership of the software code and related documentation from third-party software developers. In instances where we do not retain sole ownership of the source code, the owner may use or license the code for development of other software products that may compete directly with our products and we may not have sufficient rights in the source code to produce derivative products.

We rely on existing copyright laws to prevent unauthorized distribution of our products. Existing copyright laws afford only limited protection. Policing unauthorized use of our products is difficult, and software piracy is a persistent problem, especially in international markets. In addition, the laws of some countries in which our products are or may be distributed either do not protect our products and intellectual property rights to the same extent as the laws of the United States or are weakly enforced. Legal protection of our rights may be ineffective in these countries. Any unauthorized use of our proprietary information could result in costly and time-consuming litigation to enforce our proprietary rights.

Other parties may assert claims against us that we are infringing upon their intellectual property rights and we are required to indemnify hardware manufacturers from certain claims in exchange for the right to purchase titles and manufacture our software for their hardware application.

We cannot be certain that our products do not infringe upon the intellectual property rights of others. We may be subject to legal proceedings and claims from time to time in the ordinary course of our business, including claims of alleged infringement of the intellectual property rights of third parties. If our products

violate third-party proprietary rights, we cannot assure you that we would be able to obtain licenses to continue offering such products on commercially reasonable terms, or at all. In addition, we must indemnify the hardware manufacturers with respect to all loss, liability and expense resulting from any claim against them involving the development, marketing, sale or use of our products. This includes any claims for copyright or trademark infringement brought against them. As a result, we bear the risk that the properties upon which our software titles are based, or that the information and technology licensed from the hardware manufacturer and incorporated in our software, may infringe the rights of third parties. Any claims against us or the parties we indemnify relating to the infringement of third-party proprietary rights, even if not meritorious, could result in the expenditure of significant financial and managerial resources. Their claims could also result in injunctions preventing us from offering these products. Such claims could severely harm our financial condition and ability to compete.

We face risks associated with doing business in foreign countries, including our ability to generate international demand for our products.

We intend to increase our international revenues. We cannot assure you that we will be able to generate international market demand for our products. International sales and operations are subject to a number of risks, including:

•

the time and costs associated with translating and localizing products for foreign markets;

•

difficulties and costs of staffing and managing foreign operations, or licensing to foreign entities ; and

A significant downturn in general economic condition which results in a reduction in discretionary spending has reduced, and may continue to reduce, demand for our products and could harm our business.

Our product sales are affected by a retail customer’s ability and desire to spend disposable income on the purchase of our software titles. Any significant downturn in general economic conditions which results in a reduction of discretionary spending could result in a reduction in demand for our products and could harm our business. The United States economy is currently undergoing a period of slowdown, which some observers view as a recession. The United States and world economic condition has been worsened by the terrorist attacks on September 11, 2001. Moreover, any further terrorist activities, or the effect of the United States’ political, economic or military response to such activities, could result in the further deterioration of the United States and world economy. Such industry downturns have been, and may continue to be, characterized by diminished product demand and erosion of average selling prices. A continued economic downturn or recession would have a significant adverse effect on our operating results in future periods.

Competition within the interactive entertainment software industry is intense and poses an ongoing threat to the success of our business.

The interactive entertainment industry is intensely competitive. Many of our competitors have greater name recognition among consumers and licensors of entertainment properties, broader product lines and greater financial, marketing and other resources than us. Accordingly, these competitors may be able to market their products more effectively, make larger offers or guarantees in connection with the acquisition of licensed entertainment properties, adopt more aggressive pricing policies or pay more to third-party developers. We believe that other technology, entertainment and media companies are increasing their focus on the interactive entertainment software market, which might result in greater competition for us. In addition, many of our competitors are developing online interactive entertainment software products and interactive networks that will be competitive with our interactive entertainment software products.

•

as competition for popular entertainment properties increases, our cost of acquiring licenses for those properties may increase, resulting in reduced margins;

•

we might not be able to achieve full distribution of our products with our customers;

•

as competition for retail shelf space becomes more intense, we may need to increase our marketing expenditures to maintain sales of our interactive entertainment software titles; and

Competition for limited shelf space and promotional resources among interactive entertainment software publishers is intense and poses an ongoing threat to the success of our business.

There is intense competition among developers and publishers of interactive entertainment software products for high quality retail shelf space and promotional support from retailers. As the number of titles and hardware platforms increases, competition for shelf space will intensify and may require us to increase our marketing expenditures. Due to increased competition for limited shelf space, retailers and distributors are in an increasingly better position to negotiate favorable terms of sale, including price discounts, price protection, marketing and display fees and product return policies. Our products constitute a relatively small percentage of any retailer’s sales volume, and we cannot assure you that retailers will continue to purchase our products or to provide our products with adequate levels of shelf space and promotional support. As a result of their positions in the industry, the manufacturers of interactive entertainment hardware platforms generally have better bargaining positions with respect to retail pricing, shelf space and retailer accommodations than do any of their licensees, including us.

Government restrictions including the possible adoption of an interactive entertainment software rating system could harm our business.

Legislation is periodically introduced at the state and federal levels in the United States and in foreign countries to establish a system for providing consumers with information about graphic violence and sexually explicit material contained in interactive entertainment software products. Under such a system, interactive entertainment software publishers would be expected to comply by identifying particular products within defined rating categories. In addition, these publishers would be required to communicate these ratings to consumers through appropriate package labeling and through advertising and marketing

presentations consistent with each product’s rating. Many foreign countries have laws which permit governmental entities to censor the content of products, including interactive entertainment software. In some instances, we may be required to modify our products to comply with the requirement of such governmental entities, which could delay the release of those products in such countries. These delays could harm our business. We currently voluntarily submit our products to industry-created review boards and publish their ratings on our game packaging. Some retailers may refuse to carry titles that bear an unacceptable rating. We believe that mandatory government-run interactive entertainment software products rating systems eventually will be adopted in many countries which represent significant markets or potential markets for us. Due to the uncertainties in the implementation of such a rating system, confusion in the marketplace may occur. We are unable to predict what effect, if any, such a rating system would have on our business.

Potential opposition by consumer advocacy groups to certain software content could harm our business.

Consumer advocacy groups have in the past opposed sales of interactive entertainment software products containing graphic violence and sexually explicit content. These groups have pressed for legislation in these areas and engaged in public demonstrations and media campaigns. While to date such actions have not harmed our business, we cannot assure you that these groups will not target our products in the future. If that occurs, we may be required to significantly change or discontinue one or more of our titles.

If our common stock is delisted from The Nasdaq SmallCap Market, the liquidity and price of our common stock may be adversely affected.

Our common stock is listed on The Nasdaq SmallCap Market. In order for our common stock to continue to be listed on The Nasdaq SmallCap Market, however, we must continue to satisfy specified listing maintenance standards established by Nasdaq, including (i) required levels of total assets, net tangible assets, stockholders’ equity or revenues, (ii) minimum market value of our public float and (iii) a minimum bid price per share.

We transferred to The Nasdaq SmallCap Market from The Nasdaq National Market on March 27, 2003. We currently do not meet The Nasdaq SmallCap Market’s required levels of stockholders’ equity, net income or market value of listed securities, one of which must be met to satisfy the required listing standards. On November 24, 2003, we received a notification letter from Nasdaq that our common stock failed to meet these required listing standards. We provided Nasdaq with a plan setting forth how we expect to regain compliance with the required listing standards. On February 10, 2004, we received a staff determination letter of delisting from Nasdaq. The letter provides that our plan was not accepted by Nasdaq and that our common stock will be delisted on February 19, 2004, pending our right to appeal Nasdaq’s decision prior to a deadline of February 17, 2004 imposed by Nasdaq. We plan to request an oral hearing before the Nasdaq Listing Qualifications Panel to appeal Nasdaq’s determination to delist our common stock. The hearing is expected to be scheduled within 45 days of the filing of the hearing request. Under applicable rules, the hearing request will stay the delisting of our common stock, pending a decision by the Nasdaq Panel. We intend to present a plan to the Nasdaq Panel for achieving and sustaining compliance with the required listing standards, but there can be no assurance the Nasdaq Panel will grant our request for continued listing.

If our common stock is delisted from The Nasdaq SmallCap Market, our common stock would trade on the Over-The-Counter Bulletin Board, which is viewed by most investors as a less desirable and less liquid marketplace. In addition, we would incur penalties under the terms of our October 2003 financing. Thus, delisting from The Nasdaq SmallCap Market would adversely affect our financial condition and the liquidity and price of our common stock and would have a long-term impact on our ability to raise additional capital in the future.

Our stock price has been volatile and we expect it to continue to be volatile.

Prior to our initial public offering in November 2001, there was no public market for our common stock. Since our initial public offering the market price of our common stock has been volatile. We have experienced a decline in the market price of our common stock from the initial public offering price. The stock market has experienced significant price and volume fluctuations that affected the market price for the common stock of many technology, communications and entertainment and media companies. These market fluctuations were sometimes unrelated or disproportionate to the operating performance of these companies. Any significant stock market fluctuations in the future, irrespective of our actual performance or prospects, could result in a further decline in the market price of our common stock.

Anti-takeover provisions in our charter documents and in Delaware law could prevent or delay a change in control and, as a result, negatively impact our stockholders.

Provisions of our certificate of incorporation and bylaws may discourage, delay or prevent a merger or acquisition or make removal of incumbent directors or officers more difficult. These provisions may discourage takeover attempts and bids for our common stock at a premium over the market price. These provisions include:

•

the ability of our board of directors to alter our bylaws without stockholder approval;

•

the restriction on the ability of our stockholders to act by written consent;

•

the establishment of advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by stockholders at stockholders meetings; and

•

the establishment of a classified board of directors with staggered, three-year terms, which prevents a majority of the board from being elected at one time.

In addition, we are subject to Section 203 of the Delaware General Corporation Law, which prohibits a publicly held Delaware corporation from engaging in a merger, asset or stock sale or other transaction with an interested stockholder for a period of three years following the date such person became an interested stockholder, unless prior approval of our board of directors is obtained or as otherwise provided. These provisions of Delaware law also may discourage, delay or prevent someone from acquiring or merging with us without obtaining the prior approval of our board of directors, which may cause the market price of our common stock to decline.

We will not receive any proceeds from the sale by any selling stockholder of the 10,210,776 shares of our common stock being offered in this prospectus. If the warrants that were issued to the selling stockholders to purchase 3,462,013 shares of our common stock are exercised, we will receive estimated proceeds of approximately $5.8 million. Of the additional investment rights that were granted to the selling stockholders to purchase an additional 3,579,103 shares of our common stock, rights were exercised to purchase 990,696 shares resulting in gross proceeds of approximately $950,000, and if the rights to purchase the remaining 2,588,407 shares are exercised, we will receive estimated proceeds of approximately $2.4 million. Further, in connection with those rights that were exercised, warrants were granted to certain of the selling stockholders to purchase an additional 891,626 shares of our common stock, which if exercised we will receive additional estimated proceeds of at least $1.65 million. All of such proceeds have been, and would be, used for general corporate purposes including working capital. In addition to approximately $150,000 of expenses incurred in connection with the registration of shares on registration statement (file no. 333-110063), we will incur approximately $80,000 of expenses relating

to the registration of the shares being offered and sold by the selling stockholders in this registration statement, including the SEC registration fee and legal, accounting, printing and other expenses of this offering; a portion of the proceeds received from the exercise of the warrants or additional investment rights referenced above may be used to pay such expenses.

This prospectus relates to the resale from time to time of up to a total of 10,210,776 shares of our common stock by the selling stockholders, comprising:

•

587,605 shares of common stock issued (i) in a private offering that was completed on October 1, 2003 or (ii) upon the exercise of additional investment rights that were issued in the private offering. Pursuant to Rule 429 under the Securities Act, these shares represent shares previously registered on Form S-3 (file no. 333-110063), which was declared effective by the Securities and Exchange Commission on January 6, 2004, that remain eligible for resale. These shares are included in the prospectus that forms a part of this registration statement, which upon its being declared effective by the Securities and Exchange Commission shall constitute a post-effective amendment to the Form S-3 (file no. 333-110063);

•

2,982,729 shares of common stock issuable upon the exercise of warrants issued (i) in the private offering that was completed on October 1, 2003 or (ii) upon the subsequent exercise in January 2004 of additional investment rights that were issued in the private offering. Pursuant to Rule 429 under the Securities Act, these shares represent shares previously registered on Form S-3 (file no. 333-110063), which was declared effective by the Securities and Exchange Commission on January 6, 2004, that remain eligible for resale. These shares are included in the prospectus that forms a part of this registration statement, which upon its being declared effective by the Securities and Exchange Commission shall constitute a post-effective amendment to the Form S-3 (file no. 333-110063);

•

120,929 shares of common stock issuable upon the exercise of additional investment rights issued in the private offering that was completed on October 1, 2003 but which have not been exercised as of the date of this registration statement. Pursuant to Rule 429 under the Securities Act, these shares represent shares previously registered on Form S-3 (file no. 333-110063), which was declared effective by the Securities and Exchange Commission on January 6, 2004, that remain eligible for resale. These shares are included in the prospectus that forms a part of this registration statement, which upon its being declared effective by the Securities and Exchange Commission shall constitute a post-effective amendment to the Form S-3 (file no. 333-110063);

•

2,532,522 shares of common stock issued in a private offering that was completed on January 29, 2004; and

•

3,986,991 shares of common stock issuable upon the exercise of warrants and additional investment rights that were issued in the private offering that was completed on January 29, 2004 (but excluding the shares issuable upon exercise of the warrants underlying the additional investment rights).

The following table sets forth certain information regarding the selling stockholders and the shares offered by them in this prospectus. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to the securities, or the right to acquire voting or investment power within 60 days through the exercise of an option, warrant or right, through the conversion of a security, or through the power to revoke a trust. All shares of our common stock registered in this offering represent shares issued to each selling stockholder or shares that have been or may be acquired within 60 days of February 9, 2004 upon the

exercise of the warrants and additional investment rights issued to each selling stockholder. The percentage ownership is calculated based on 20,340,822 shares, which represents the number of shares of our commons stock that were outstanding as of February 9, 2004, and the total number of shares issuable to each selling stockholder upon the exercise of the warrants and additional investment rights. The shares issuable upon the exercise of the warrants and additional investment rights by each selling stockholder, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other selling stockholder. Except for our agreement to issue additional shares of our common stock and warrants upon exercise of the additional investment rights as described above, none of the selling stockholders within the past three years has had any material relationship with us or any of our affiliates. To our knowledge, subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares of common stock set forth opposite such person’s name, unless otherwise indicated in the table.


	Number of			Percentage of
	Shares of			Shares of			Number of		Number of Shares of
	Common Stock			Common Stock			Shares of		Common Stock
	Beneficially Owned			Beneficially Owned			Common Stock		Beneficially Owned
	Prior to the			Prior to the			Registered for Sale		After the
Selling Stockholder	Offering			Offering			Hereby		Offering(1)

Vertical Ventures LLC 641 Lexington Ave., 26th Floor New York, NY 10022		1,130,323	(2)		4.99	%		2,536,709		- 0 -
Crescent International LTD c/o Greenlight (Switzerland) SA 84 Av.Louis-Casai CH 1216 Cointrin, Geneva Switzerland		1,085,998	(3)		4.99	%		1,704,912		- 0 -
Cranshire Capital, L.P. 666 Dundee Road, Suite 1901 Northbrook, IL 60062		1,073,555	(4)		4.99	%		1,399,085		- 0 -
Omicron Master Trust 810 Seventh Avenue, 39th Fl. New York, NY 10019		1,030,078	(5)		4.9	%		839,451		- 0 -
Bristol Investment Fund, Ltd. c/o Bristol Capital Advisors, LLC 6363 Sunset Blvd., 5th Fl. Hollywood, CA 90028		686,719	(6)		3.3	%		559,634		- 0 -
Basso Equity Opportunity Holding Fund Ltd. 1266 East Main St. Stamford, CT 06902		604,639	(7)		2.9	%		494,842		- 0 -
OTAPE Investments LLC One Manhattenville Road Purchase, NY 10577		538,987	(8)		2.6	%		538,987		- 0 -
AS Capital Partners, LLC 120 Broadway, 9th Fl. New York, NY 10271		515,039	(9)		2.5	%		419,726		- 0 -


	Number of			Percentage of
	Shares of			Shares of			Number of		Number of Shares of
	Common Stock			Common Stock			Shares of		Common Stock
	Beneficially Owned			Beneficially Owned			Common Stock		Beneficially Owned
	Prior to the			Prior to the			Registered for Sale		After the
Selling Stockholder	Offering			Offering			Hereby		Offering(1)

SRG Capital, LLC 120 Broadway New York, NY 10271		515,039	(10)		2.5	%		419,726		- 0 -
Smithfield Fiduciary LLC c/o Highbridge Capital Management 9 West 57th Street, 27th Floor New York, NY 10019		337,685	(11)		1.6	%		337,685		- 0 -
JAS Securities, LLC 120 Broadway, 9th Floor New York, NY 10271		256,986	(12)		1.3	%		211,296		- 0 -
HD Brous & Co., Inc. 60 Cuttermill Road, Suite 500 Great Neck, NY 11021		202,813	(13)		*			202,813		- 0 -
Truk Opportunity Fund, LLC 45 Rockefeller Plaza, Suite 2000 New York, NY 10111		109,347	(14)		*			97,539		- 0 -
WestPark Holdings, LLC 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		101,425	(15)		*			101,425		- 0 -
Stephen J. Posner c/o HD Brous & Co., Inc. 60 Cuttermill Road, Suite 500 Great Neck, NY 11021		81,865	(16)		*			81,865		- 0 -
Ellen Brous c/o HD Brous & Co., Inc. 60 Cuttermill Road, Suite 500 Great Neck, NY 11021		30,000	(16)		*			30,000		- 0 -
Truk International Fund, LP 45 Rockefeller Plaza, Suite 2000 New York, NY 10011		18,954	(17)		*			15,446		- 0 -
Robert S. King c/o HD Brous & Co., Inc. 60 Cuttermill Road, Suite 500 Great Neck, NY 11021		10,000	(16)		*			10,000		- 0 -

(1) Assumes that all shares of common stock being offered pursuant to this prospectus will be resold by the selling stockholders and none will be held by the selling stockholders for their own accounts.

(2) Vertical Ventures LLC holds (a) 543,478 shares of our common stock, (b) warrants to purchase up to 1,463,711 shares of our common stock and (c) additional investment rights to purchase up to 529,520 additional shares of our common stock and warrants to purchase up to 317,712 additional shares of our common stock. Further to the terms of the warrants, the additional investment rights and the warrants comprising a portion of the additional investment rights held by Vertical Ventures LLC, the warrants and the additional investment rights are not exercisable to the extent that (a) the number of shares of our common stock held by Vertical Ventures LLC and (b) the number of shares of our common stock issuable upon exercise of the warrants, the additional investment rights and the warrants comprising a portion of the additional investment rights would result in beneficial ownership by Vertical Ventures LLC of more than 4.99% of our outstanding shares of common stock (“Vertical’s Maximum Percentage”). By written notice to us, Vertical Ventures LLC may waive these provisions, or increase or decrease Vertical’s Maximum Percentage, but any such waiver or increase will not be effective until the 61st day after such

notice is delivered to us (any such waiver of increase or decrease will apply only to Vertical Ventures LLC and not to any other holder of warrants, additional investment rights or warrants comprising a portion of the additional investment rights). Vertical Ventures LLC beneficially owns 1,724,098 shares of common stock underlying warrants, additional investment rights and warrants comprising a portion of the additional investment rights that are currently exercisable or exercisable within 60 days. Joshua Silverman has voting control and investment power over securities held by Vertical Ventures LLC. Mr. Silverman disclaims beneficial ownership of the securities held by Vertical Ventures LLC.

(3) Crescent International LTD holds (a) 539,463 shares of our common stock, (b) warrants to purchase up to 736,760 shares of our common stock and (c) additional investment rights to purchase up to 428,699 additional shares of our common stock and warrants to purchase up to 257,220 additional shares of our common stock. Further to the terms of the warrants, the additional investment rights and the warrants comprising a portion of the additional investment rights held by Crescent International LTD, the warrants and the additional investment rights are not exercisable to the extent that (a) the number of shares of our common stock held by Crescent International LTD and (b) the number of shares of our common stock issuable upon exercise of the warrants, the additional investment rights and the warrants comprising a portion of the additional investment rights would result in beneficial ownership by Crescent International LTD of more than 4.99% of our outstanding shares of common stock (“ Crescent’s Maximum Percentage”). By written notice to us, Crescent International LTD may waive these provisions, or increase or decrease Crescent’s Maximum Percentage, but any such waiver or increase will not be effective until the 61st day after such notice is delivered to us (any such waiver of increase or decrease will apply only to Crescent International LTD and not to any other holder of warrants, additional investment rights or warrants comprising a portion of the additional investment rights). Crescent International LTD beneficially owns 546,535 shares of common stock underlying warrants that are currently exercisable or exercisable within 60 days. Mel Craw and Maxi Brezzi, in their capacity as managers for GreenLight (Switzerland) SA, the investment advisor to Crescent International LTD, are the individuals that have voting and dispositive power over the shares to be sold by Crescent International LTD. Messrs. Craw and Brezzi disclaim beneficial ownership of these securities.

(4) Cranshire Capital, L.P. holds (a) 543,478 shares of our common stock, (b) warrants to purchase up to 326,087 shares of our common stock and (c) additional investment rights to purchase up to 529,520 additional shares of our common stock and warrants to purchase up to 317,712 additional shares of our common stock. Further to the terms of the warrants, the additional investment rights and the warrants comprising a portion of the additional investment rights held by Cranshire Capital, L.P., the warrants and the additional investment rights are not exercisable to the extent that (a) the number of shares of our common stock held by Cranshire Capital, L.P. and (b) the number of shares of our common stock issuable upon exercise of the warrants, the additional investment rights and the warrants comprising a portion of the additional investment rights would result in beneficial ownership by Cranshire Capital, L.P. of more than 4.99% of our outstanding shares of common stock (“Cranshire’s Maximum Percentage”). By written notice to us, Cranshire Capital, L.P. may waive these provisions, or increase or decrease Cranshire’s Maximum Percentage, but any such waiver or increase will not be effective until the 61st day after such notice is delivered to us (any such waiver of increase or decrease will apply only to Cranshire Capital, L.P. and not to any other holder of warrants, additional investment rights or warrants comprising a portion of the additional investment rights). Cranshire Capital, L.P. beneficially owns 530,077 shares of common stock underlying warrants, additional investment rights and warrants comprising a portion of the additional investment rights that are currently exercisable or exercisable within 60 days. Mitchell P. Kopin, President of Downsview Capital, Inc., the general partner of Cranshire Capital LP, has voting control and investment power over securities held by Cranshire Capital, L.P. Mr. Kopin disclaims beneficial ownership of the securities held by Cranshire Capital, L.P.

(5) Includes 195,652 warrants exercisable within 60 days, and 317,712 shares and 190,627 warrants underlying additional investment rights that may be exercised within 60 days. Omicron Capital, L.P., a Delaware limited partnership (“Omicron Capital”), serves as investment manager to Omicron Master Trust, a trust formed under the laws of Bermuda (“Omicron”), Omicron Capital, Inc., a Delaware

corporation (“OCI”), serves as general partner of Omicron Capital, and Winchester Global Trust Company Limited (“Winchester”) serves as the trustee of Omicron. By reason of such relationships, Omicron Capital and OCI may be deemed to share dispositive power over securities owned by Omicron, and Winchester may be deemed to share voting and dispositive power over the securities owned by Omicron. Omicron Capital, OCI and Winchester disclaim beneficial ownership of such securities. Omicron Capital has delegated authority from the board of directors of Winchester regarding the portfolio management decisions with respect to the securities owned by Omicron and, as of April 21, 2003, Mr. Olivier H. Morali and Mr. Bruce T. Bernstein, officers of OCI, have delegated authority from the board of directors of OCI regarding the portfolio management decisions of Omicron Capital with respect to the securities owned by Omicron. By reason of such delegated authority, Messrs. Morali and Bernstein may be deemed to share dispositive power over the securities owned by Omicron. Messrs. Morali and Bernstein disclaim beneficial ownership of such securities and neither of such persons has any legal right to maintain such delegated authority. No other person has sole or shared voting or dispositive power with respect to securities being offered by Omicron, as those terms are used for purposes under Regulation 13D-G of the Securities Exchange Act of 1934, as amended. Omicron and Winchester are not “affiliates” of one another, as that term is used for purposes of the Securities Exchange Act of 1934, as amended, or of any other person named in this prospectus as a selling stockholder. No person or “group” (as that term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended, or the SEC’s Regulation 13D-G) controls Omicron and Winchester.

(6) Includes 130,435 warrants exercisable within 60 days, and 211,808 shares and 127,085 warrants underlying additional investment rights that may be exercised within 60 days. Paul Kessler, Director and Member of the investment manager to Bristol Investment Fund, Ltd., has investment power and voting control over securities held by Bristol Investment Fund, Ltd. Mr. Kessler disclaims beneficial ownership of the securities held by Bristol Investment Fund, Ltd.

(7) Includes 145,438 warrants exercisable within 60 days, and 154,473 shares and 109,797 warrants underlying additional investment rights that may be exercised within 60 days. Basso Equity Opportunity Holding Fund Ltd. was formerly known as AIG DKR SoundShore Private Investors Holding Fund Ltd. Basso Capital Management, L.P. (“Basso”) is the investment manager to Basso Equity Opportunity Holding Fund Ltd. Howard I. Fischer is a managing member of Basso GP, LLC, the general partner of Basso.

(8) Includes 427,428 warrants exercisable within 60 days. Ira Leventhal a United States citizen may be deemed to have voting control and dispositive power with regard to the securities owned by OTAPE Investments LLC. Mr. Leventhal disclaims any beneficial ownership of the securities held by OTAPE Investments LLC.

(9) Includes 97,826 warrants exercisable within 60 days, and 158,856 shares and 95,313 warrants underlying additional investment rights that may be exercised within 60 days. Andrew Smukler, in his capacity as managing member of AS Capital Partners, LLC, has voting control and investment power over shares held by AS Capital Partners, LLC. Mr. Smukler disclaims beneficial ownership of these securities.

(10) Includes 97,826 warrants exercisable within 60 days, and 158,856 shares and 95,313 warrants underlying additional investment rights that may be exercised within 60 days. Tai May Lee and Edwin Mecabe jointly have investment power and voting control over securities held by SRG Capital, LLC. Tai May Lee and Edwin Mecabe disclaim beneficial ownership of the securities held by SRG Capital, LLC.

(11) Represents warrants exercisable within 60 days. Highbridge Capital Management, LLC is the trading manager of Smithfield Fiduciary LLC and consequently has voting control and investment power over securities held by Smithfield Fiduciary LLC. Glenn Dubin and Henry Swieca control Highbridge Capital Management, LLC. Each of Highbridge Capital Management, LLC, Glenn Dubin and Henry Swieca diclaims beneficial ownership of the securities held by Smithfield Fiduciary LLC.

(12) Includes 76,040 warrants exercisable within 60 days, and 50,767 shares and 45,690 warrants underlying additional investment rights that may be exercised within 60 days. Andrew Smukler, in his

capacity as managing member of JAS Securities, LLC, has voting control and investment power over shares held by JAS Securities, LLC. Mr. Smukler disclaims beneficial ownership of these securities.

(13) Represents warrants currently exercisable or exercisable within 60 days, although the warrants and underlying shares are subject to a 180 day lock-up provision that expires on March 28, 2004. Harold Brous has voting control and investment power over securities held by HD Brous & Co., Inc. Mr. Brous disclaims beneficial ownership of these securities.

(14) Represents 37,651 warrants exercisable within 60 days, and 42,350 shares and 29,346 warrants underlying additional investment rights that may be exercised within 60 days. Michael E. Fein and Stephen Saltzstein, as principals of Atoll Asset Management, LLC, the managing member of Truk Opportunity Fund, LLC, exercise investment and voting control over the shares to be sold by Truk Opportunity Fund, LLC. Both Mr. Fein and Mr. Saltzstein disclaim beneficial ownership of the securities beneficially owned by this selling stockholder.

(15) Represents warrants currently exercisable or exercisable within 60 days, although the warrants and underlying shares are subject to a 180 day lock-up provision that expires on March 28, 2004 with respect to 74,687 shares and July 21, 2004 with respect to 26,738 shares. Richard Rappaport has voting control and investment power over securities held by Westpark Holdings LLC. Mr. Rappaport disclaims beneficial ownership of the securities held by Westpark Holdings LLC.

(16) Represents warrants currently exercisable or exercisable within 60 days, although the warrants and underlying shares are subject to a 180 day lock-up provision that expires on July 21, 2004.

(17) Includes 3,600 warrants exercisable within 60 days, and 5,846 shares and 3,508 warrants underlying additional investment rights that may be exercised within 60 days. Michael E. Fein and Stephen Saltzstein, as principals of Atoll Asset Management, LLC, the managing member of Truk International Fund, LP, exercise investment power and voting control over the shares to be sold by Truk International Fund, LP. Both Mr. Fein and Mr. Saltzstein disclaim beneficial ownership of the securities beneficially owned by this selling stockholder.

The selling stockholders may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The selling stockholders may use any one or more of the following methods when selling shares:

•

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

•

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

•

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

•

an exchange distribution in accordance with the rules of the applicable exchange;

•

broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

The selling stockholders may also sell shares under Rule 144 under the Securities Act of 1933, if available, rather than under this prospectus.

The selling stockholders may also engage in short sales against the box after this registration statement becomes effective, puts and calls and other transactions in our securities or derivatives of our securities and may sell or deliver shares in connection with these trades.

Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. Any profits on the resale of shares of common stock by a broker-dealer acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act of 1933. Discounts, concessions, commissions and similar selling expenses, if any, attributable to the sale of shares will be borne by a selling stockholder. The selling stockholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the shares if liabilities are imposed on that person under the Securities Act of 1933.

The selling stockholders may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time under this prospectus after we have filed an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.

The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus and may sell the shares of common stock from time to time under this prospectus after we have filed an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.

JAS Securities, Ltd. and HD Brous & Co. Inc. are registered broker-dealers and are “underwriters” within the meaning of the Securities Act in connection with the sale of their shares of common stock pursuant to this prospectus. The other selling stockholders and any broker-dealers or agents that are involved in selling the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be , and as to JAS Securities Ltd. and HD Brous & Co., Inc. will be, deemed to be underwriting commissions or discounts under the Securities Act.

We are required to pay all fees and expenses incident to the registration of the shares of common stock. We have agreed to indemnify the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act of 1933.

Each of the selling stockholders acquired the securities offered hereby in the ordinary course of business and has advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their shares of common stock, nor is there an underwriter or coordinating broker acting in connection with a proposed sale of shares of common stock by any selling stockholder. If we are notified by any selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of shares of common stock, if required, we will file a supplement to this prospectus. If the selling stockholders use this prospectus for any sale of the shares of common stock, they will be subject to the prospectus delivery requirements of the Securities Act.

The anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934 may apply to sales of our common stock and activities of the selling stockholders.

The validity of the issuance of the shares offered in this prospectus will be passed upon for us by Kirkpatrick & Lockhart, LLP, Los Angeles, California.

The consolidated financial statements and the related consolidated financial statement schedule incorporated in this prospectus by reference from the Company’s Annual Report on Form 10-K for the year ended June 30, 2003 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference (which report expresses an unqualified opinion and includes an explanatory paragraph referring to the uncertainty of the Company’s ability to continue as a going concern), and have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

We file annual, quarterly and special reports, along with other information with the SEC. You may read and copy any document we file at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our common stock is traded on The American Stock Exchange and the Toronto Stock Exchange. You may inspect reports and other information concerning us at the offices of the American Stock Exchange, Inc., 86 Trinity Place, New York, New York 10006. These filings and other information may also be inspected without charge at a Web site maintained by the SEC. The address of the site is http://www.sec.gov.

The documents listed in paragraphs (a) through (d) below have been filed with the Securities and Exchange Commission (the “SEC”) and are hereby incorporated by reference into this Registration Statement. All documents that we subsequently file pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), prior to the filing of a post-effective amendment which indicates that all securities offered herein have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereto from the date of filing of such documents.

(a)

our annual report on Form 10-K for the year ended June 30, 2003 filed with the SEC on September 30, 2003;

(b)

our quarterly report on Form 10-Q for the quarter ended September 30, 2003 filed with the SEC on November 14, 2003;

(c)

our current reports on Form 8-K filed with the SEC on February 11, 2004, February 2, 2004, December 10, 2003, November 17, 2003, October 3, 2003, October 2, 2003, September 30, 2003, August 20, 2003 and July 23, 2003;

(e)

The description of our common stock contained in our registration statement on Form 8-A, as filed with the SEC on July 13, 2001, including any amendment or report filed for the purpose of updating such description.

The following table sets forth the costs and expenses payable by the Registrant in connection with this offering, other than underwriting commissions and discounts, all of which are estimated except for the SEC registration fee.

Under Section 145 of the General Corporation Law of the State of Delaware, we can indemnify our directors and officers against liabilities they may incur in such capacities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Our certificate of incorporation provides that, pursuant to Delaware law, our directors shall not be liable for monetary damages for breach of the directors’ fiduciary duty of care to us and our stockholders. This provision in the certificate of incorporation does not eliminate the duty of care, and in appropriate circumstances equitable remedies such as injunctive or other forms of nonmonetary relief will remain available under Delaware law. In addition, each director will continue to be subject to liability for breach of the director’s duty of loyalty to us or our stockholders, for acts or omissions not in good faith or involving intentional misconduct or knowing violations of the law, for actions leading to improper personal benefit to the director, and for payment of dividends or approval of stock repurchases or redemptions that are unlawful under Delaware law. The provision also does not affect a director’s responsibilities under any other law, such as the federal securities laws or state or federal environmental laws.

Our bylaws provide for the indemnification of our directors to the fullest extent permitted by the Delaware General Corporation Law. Our bylaws further provide that our Board of Directors has sole discretion to indemnify our officers and other employees. We may limit the extent of such indemnification by individual contracts with our directors and executive officers, but have not done so. We are not, however, required to indemnify any director or executive officer in connection with any proceeding initiated by us and approved by a majority of our Board of Directors, that alleges (a) unlawful misappropriation of corporate assets, (b) disclosure of confidential information or (c) any other willful breach of such director or executive officer’s duty to us or our stockholders. We are required to advance, prior to the final disposition of any proceeding, promptly on request, all expenses incurred by any director or executive officer in connection with that proceeding on receipt of an undertaking by or on behalf of that director or executive officer to repay those amounts if it should be determined ultimately that he or she is not entitled to be indemnified under our bylaws or otherwise.


Exhibit
Number		Description of Exhibit

4.1		Form of Stock Purchase Warrant dated as of September 30, 2003 by and between the Registrant and each of the Purchasers (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 2, 2003)
4.1(a)		List of Purchasers who entered into Stock Purchase Warrant referenced in Exhibit 4.1 with the Registrant (incorporated by reference to Exhibit 4.1(a) of the Registrant’s Registration Statement on Form S-3, as amended (File No 333-110063), filed with the Securities and Exchange Commission on December 10, 2003)
4.2		Form of Additional Investment Right dated as of September 30, 2003 by and between the Registrant and each of the Purchasers (incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on October 3, 2003)
4.2(a)		List of Purchasers who entered into Additional Investment Right referenced in Exhibit 4.2 with the Registrant (incorporated by reference to Exhibit 4.2(a) of the Registrant’s Registration Statement on Form S-3, as amended (File No 333-110063), filed with the Securities and Exchange Commission on December 10, 2003)
4.3		Form of Additional Investment Right Warrant that may be entered into by and between the Registrant and each of the Purchasers, which is attached as Exhibit 1 to the Additional Investment Right (Exhibit 4.2) and incorporated by reference therein (incorporated by reference to Exhibit 4.3 of the Registrant’s Registration Statement on Form S-3 (File No 333-110063), filed with the Securities and Exchange Commission on October 29, 2003)
4.3(a)		List of Purchasers who entered into Additional Investment Right Warrant referenced in Exhibit 4.3 with the Registrant.
4.4		Form of Stock Purchase Warrant dated as of January 29, 2004 by and between the Registrant and each of the Purchasers (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2004)
4.4(a)		List of Purchasers who entered into Stock Purchase Warrant referenced in Exhibit 4.1 with the Registrant.
4.5		Form of Additional Investment Right dated as of January 29, 2004 by and between the Registrant and each of the Purchasers (incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2004)
4.5(a)		List of Purchasers who entered into Additional Investment Right referenced in Exhibit 4.2 with the Registrant.
4.6		Form of Additional Investment Right Warrant that may be entered into by and between the Registrant and each of the Purchasers, which is attached as Exhibit 1 to the Additional Investment Right (Exhibit 4.5) and incorporated by reference therein.
4.7		Common Stock Registration Rights Agreement dated as of September 30, 2003 by and between the Registrant and each of the Purchasers set forth on the execution pages thereof.
4.8		Warrant Shares Registration Rights Agreement dated as of September 30, 2003 by and between the Registrant and each of the Purchasers set forth on the execution pages thereof.
4.9		Common Stock Registration Rights Agreement dated as of January 29, 2004 by and between the Registrant and each of the Purchasers set forth on the execution pages thereof.
4.10		Warrant Shares Registration Rights Agreement dated as of January 29, 2004 by and between the Registrant and each of the Purchasers set forth on the execution pages thereof.


Exhibit
Number		Description of Exhibit

4.11		Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-1, as amended (File No 333-62436), filed with the Securities and Exchange Commission on September 4, 2001)
5.1*		Opinion of Kirkpatrick & Lockhart, LLP.
10.1		Securities Purchase Agreement dated as of September 30, 2003 by and among the Registrant and the Purchasers set forth on the execution pages thereof (incorporated by reference to Exhibit 10.1 of the Registrant’s Registration Statement on Form S-3, as amended (File No 333-110063), filed with the Securities and Exchange Commission on December 10, 2003)
10.2		First Amendment to Securities Purchase Agreement dated as of October 20, 2003 by and among the Registrant and the Purchasers set forth on the execution pages thereof (incorporated by reference to Exhibit 10.2 of the Registrant’s Registration Statement on Form S-3, as amended (File No 333-110063), filed with the Securities and Exchange Commission on December 10, 2003)
10.3		Side Letter Agreement dated as of October 28, 2003 by and among the Registrant and the Purchasers set forth on the execution pages thereof (incorporated by reference to Exhibit 10.3 of the Registrant’s Registration Statement on Form S-3, as amended (File No 333-110063), filed with the Securities and Exchange Commission on December 10, 2003)
10.4		Securities Purchase Agreement dated as of January 29, 2004 by and among the Registrant and the Purchasers set forth on the execution pages thereof (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2004)
23.1		Consent of Deloitte & Touche LLP.
23.2		Consent of Kirkpatrick & Lockhart, LLP (contained in Exhibit 5.1)
24.1		Power of Attorney (included on signature page)

To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the “Securities Act”);

To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (a) and (b) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

The undersigned Registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

For the purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the registration statement as of the time it was declared effective.

For the purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of San Jose, State of California, on February 10, 2004.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Raymond C. Musci as his true and lawful attorneys-in-fact and agents, with full power of substitution for him in any and all capacities, to sign (1) any and all amendments (including post-effective amendments) to this Registration Statement and (2) any registration statement or post-effective amendment thereto to be filed with the Securities and Exchange Commission pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.


Exhibit Number		Description of Exhibit

4.1		Form of Stock Purchase Warrant dated as of September 30, 2003 by and between the Registrant and each of the Purchasers (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 2, 2003)
4.1(a)		List of Purchasers who entered into Stock Purchase Warrant referenced in Exhibit 4.1 with the Registrant (incorporated by reference to Exhibit 4.1(a) of the Registrant’s Registration Statement on Form S-3, as amended (File No 333-110063), filed with the Securities and Exchange Commission on December 10, 2003)
4.2		Form of Additional Investment Right dated as of September 30, 2003 by and between the Registrant and each of the Purchasers (incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on October 3, 2003)
4.2(a)		List of Purchasers who entered into Additional Investment Right referenced in Exhibit 4.2 with the Registrant (incorporated by reference to Exhibit 4.2(a) of the Registrant’s Registration Statement on Form S-3, as amended (File No 333-110063), filed with the Securities and Exchange Commission on December 10, 2003)
4.3		Form of Additional Investment Right Warrant that may be entered into by and between the Registrant and each of the Purchasers, which is attached as Exhibit 1 to the Additional Investment Right (Exhibit 4.2) and incorporated by reference therein (incorporated by reference to Exhibit 4.3 of the Registrant’s Registration Statement on Form S-3 (File No 333-110063), filed with the Securities and Exchange Commission on October 29, 2003)
4.3(a)		List of Purchasers who entered into Additional Investment Right Warrant referenced in Exhibit 4.3 with the Registrant.
4.4		Form of Stock Purchase Warrant dated as of January 29, 2004 by and between the Registrant and each of the Purchasers (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2004)
4.4(a)		List of Purchasers who entered into Stock Purchase Warrant referenced in Exhibit 4.1 with the Registrant.
4.5		Form of Additional Investment Right dated as of January 29, 2004 by and between the Registrant and each of the Purchasers (incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2004)
4.5(a)		List of Purchasers who entered into Additional Investment Right referenced in Exhibit 4.2 with the Registrant.
4.6		Form of Additional Investment Right Warrant that may be entered into by and between the Registrant and each of the Purchasers, which is attached as Exhibit 1 to the Additional Investment Right (Exhibit 4.5) and incorporated by reference therein.
4.7		Common Stock Registration Rights Agreement dated as of September 30, 2003 by and between the Registrant and each of the Purchasers set forth on the execution pages thereof.
4.8		Warrant Shares Registration Rights Agreement dated as of September 30, 2003 by and between the Registrant and each of the Purchasers set forth on the execution pages thereof.
4.9		Common Stock Registration Rights Agreement dated as of January 29, 2004 by and between the Registrant and each of the Purchasers set forth on the execution pages thereof.
4.10		Warrant Shares Registration Rights Agreement dated as of January 29, 2004 by and between the Registrant and each of the Purchasers set forth on the execution pages thereof.


Exhibit Number		Description of Exhibit

4.11		Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-1, as amended (File No 333-62436), filed with the Securities and Exchange Commission on September 4, 2001)
5.1*		Opinion of Kirkpatrick & Lockhart, LLP.
10.1		Securities Purchase Agreement dated as of September 30, 2003 by and among the Registrant and the Purchasers set forth on the execution pages thereof (incorporated by reference to Exhibit 10.1 of the Registrant’s Registration Statement on Form S-3, as amended (File No 333-110063), filed with the Securities and Exchange Commission on December 10, 2003)
10.2		First Amendment to Securities Purchase Agreement dated as of October 20, 2003 by and among the Registrant and the Purchasers set forth on the execution pages thereof (incorporated by reference to Exhibit 10.2 of the Registrant’s Registration Statement on Form S-3, as amended (File No 333-110063), filed with the Securities and Exchange Commission on December 10, 2003)
10.3		Side Letter Agreement dated as of October 28, 2003 by and among the Registrant and the Purchasers set forth on the execution pages thereof (incorporated by reference to Exhibit 10.3 of the Registrant’s Registration Statement on Form S-3, as amended (File No 333-110063), filed with the Securities and Exchange Commission on December 10, 2003)
10.4		Securities Purchase Agreement dated as of January 29, 2004 by and among the Registrant and the Purchasers set forth on the execution pages thereof (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2004)
23.1		Consent of Deloitte & Touche LLP.
23.2		Consent of Kirkpatrick & Lockhart, LLP (contained in Exhibit 5.1)
24.1		Power of Attorney (included on signature page)


Delaware	7372	77-0553117
(State or other jurisdiction of incorporation	(Primary Standard Industrial	(I.R.S. Employer
or organization)	Classification Code Number)	Identification Number)


Prospectus Summary
Special Note on Forward Looking Statements
Risk Factors
Use of Proceeds
Selling Stockholders
Plan of Distribution
Legal Matters
Experts
Where You Can Find More Information
Incorporation of Certain Documents by Reference
SIGNATURES
EX-4.3(A)
EX-4.4(A)
EX-4.5(A)
EX-4.7
EX-4.8
EX-4.9
EX-4.10
EX-23.1


Item		Amount

SEC registration fee		$	1,772
Printing and engraving expenses			3,000
Legal fees and expenses			50,000
Accounting fees and expenses			20,000
Transfer agent and registrar’s fees and expenses			2,000
Miscellaneous expenses			3,228

	Total	$	80,000


		BAM! ENTERTAINMENT, INC.

		By:		/s/ RAYMOND C. MUSCI

				Raymond C. Musci
				Chief Executive Officer


SIGNATURE	TITLE	DATE


/s/ RAYMOND C. MUSCI	Chief Executive Officer and Director
	(Principal Executive Officer)	February 10, 2004
Raymond C. Musci

/s/ ANTHONY R. WILLIAMS
	Vice Chairman of the Board	February 10, 2004
Anthony R. Williams

/s/ STEPHEN M. AMBLER	Chief Financial Officer and Vice President of Finance (Principal
	Financial and Accounting Officer)	February 10, 2004
Stephen M. Ambler

	Director

Mark Dyne

/s/ ANTHONY G. WILLIAMS
	Director	February 10, 2004
Anthony G. Williams

/s/ JEFF SCHEINROCK
	Director	February 10, 2004
Jeff Scheinrock

/s/ BRENDON GRUNEWALD
	Director	February 10, 2004
Brendon Grunewald

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents


	As Filed with the Securities and Exchange Commission on February 11, 2004	Registration No. 333-


Item 14.	Other Expenses of Issuance and Distribution.