UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
(Amendment No. 11)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
Majesco Entertainment Company
-----------------------------
(Name of Issuer)
Common Stock
------------------------------
(Title of Class of Securities)
784495103
--------------
(CUSIP Number)
Trinad Capital Master Fund Ltd.
2121 Avenue of the Stars, Suite 1650
Los Angeles, CA 90067
(310) 601-2500
--------------------------------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
March 30, 2006
------------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f), or 13d-1(g), check the following
box: |_|.
SCHEDULE 13D
CUSIP No. 784495103
-------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Trinad Capital Master Fund Ltd.
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |_|
--------------------------------------------------------------------------------
3) SEC USE ONLY
--------------------------------------------------------------------------------
4) SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
|_|
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7) SOLE VOTING POWER
2,543,984
SHARES
-----------------------------------------------------
BENEFICIALLY
8) SHARED VOTING POWER
OWNED BY
-----------------------------------------------------
EACH
9) SOLE DISPOSITIVE POWER
REPORTING 2,543,984
PERSON -----------------------------------------------------
WITH 10) SHARED DISPOSITIVE POWER
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,543,984
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.43%
--------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
PN
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SCHEDULE 13D
CUSIP No. 784495103
-------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert S. Ellin
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |_|
--------------------------------------------------------------------------------
3) SEC USE ONLY
--------------------------------------------------------------------------------
4) SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
|_|
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
--------------------------------------------------------------------------------
NUMBER OF 7) SOLE VOTING POWER
33,856
SHARES
-----------------------------------------------------
BENEFICIALLY
8) SHARED VOTING POWER
OWNED BY 2,898,538(1)
EACH -----------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
33,856
PERSON
-----------------------------------------------------
WITH
10) SHARED DISPOSITIVE POWER
2,898,538(1)
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,932,394(1)
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.17%
--------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
(1) Includes (A) 2,543,984 shares of Common Stock owned by the Trinad Capital
Master Fund Ltd. (the "Fund"); (B) 47,656 shares of Common Stock owned directly
by Nancy J. Ellin, the spouse of Robert S. Ellin; (C) 225,456 shares of Common
Stock that are owned directly by Atlantis Equities, Inc., a Delaware corporation
of which Nancy J. Ellin is the sole stockholder ("Atlantis"); and (D) 81,442
shares of Common Stock owned by the Robert S. Ellin Profit Sharing Plan (the
"Plan"). Mr. Ellin disclaims any beneficial ownership of shares of Common Stock
held by the Fund except to the extent of (1) his indirect beneficial ownership
as the managing member of Trinad Advisors GP, LLC, the general partner of a
principal stockholder of the Fund, and (2) his indirect beneficial ownership as
a limited partner of the Fund. Mr. Ellin also disclaims any beneficial ownership
of shares of Common Stock owned directly by Mrs. Ellin, Atlantis and the Plan.
SCHEDULE 13D
CUSIP No. 784495103
-------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Nancy J. Ellin
--------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |_|
--------------------------------------------------------------------------------
3) SEC USE ONLY
--------------------------------------------------------------------------------
4) SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
|_|
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
--------------------------------------------------------------------------------
NUMBER OF 7) SOLE VOTING POWER
47,656
SHARES
-----------------------------------------------------
BENEFICIALLY
8) SHARED VOTING POWER
OWNED BY 340,754(2)
EACH -----------------------------------------------------
REPORTING 9) SOLE DISPOSITIVE POWER
47,656
PERSON
-----------------------------------------------------
WITH
10) SHARED DISPOSITIVE POWER
340,754(2)
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
388,410(2)
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.75%
--------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
(2) Includes (A) 33,856 shares of Common Stock owned by Robert S. Ellin, Mrs.
Ellin's spouse, (B) 225,456 shares of Common Stock that are owned directly by
Atlantis, a company of which Mrs. Ellin is the sole stockholder; and (C) 81,442
shares of Common Stock owned by the Plan. Mrs. Ellin disclaims any beneficial
ownership of shares of Common Stock owned individually by Mr. Ellin, and owned
directly by Mr. Ellin and the Plan.
SCHEDULE 13D
CUSIP No. 784495103
-------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Atlantis Equities, Inc.
--------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |_|
--------------------------------------------------------------------------------
3) SEC USE ONLY
--------------------------------------------------------------------------------
4) SOURCE OF FUNDS SC
--------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
|_|
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
New York
--------------------------------------------------------------------------------
NUMBER OF 7) SOLE VOTING POWER
225,456
SHARES
-----------------------------------------------------
BENEFICIALLY
8) SHARED VOTING POWER
OWNED BY
-----------------------------------------------------
EACH
9) SOLE DISPOSITIVE POWER
REPORTING 225,456
PERSON -----------------------------------------------------
WITH 10) SHARED DISPOSITIVE POWER
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
225,456
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.01%
--------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
CO
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SCHEDULE 13D
CUSIP No. 784495103
-------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert S. Ellin Profit Sharing Plan
--------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |_|
--------------------------------------------------------------------------------
3) SEC USE ONLY
--------------------------------------------------------------------------------
4) SOURCE OF FUNDS OO
--------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
|_|
--------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
--------------------------------------------------------------------------------
NUMBER OF 7) SOLE VOTING POWER
81,442
SHARES
-----------------------------------------------------
BENEFICIALLY
8) SHARED VOTING POWER
OWNED BY
-----------------------------------------------------
EACH
9) SOLE DISPOSITIVE POWER
REPORTING 81,442
PERSON -----------------------------------------------------
WITH 10) SHARED DISPOSITIVE POWER
--------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
81,442
--------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
--------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.37%
--------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
The purpose of this Schedule 13D/A is to reflect the delivery
by Trinad Capital Master Fund Ltd. (the "Fund") to Majesco Entertainment Company
(the "Issuer") of a letter (the "Letter") on March 30, 2006 in response to a
letter the Fund received from the board of directors (sometimes referred to
herein as the "Board") of the Issuer on March 29, 2006 and to reflect the
purchases of additional shares of common stock, $.001 par value per share (the
"Common Stock"), purchased by one or more of the Reporting Persons since the
date of the filing of amendment number 10 to this Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Since the date of the previous amendment number 10 to the
Schedule 13D, the Fund used $213,037.74 of investment capital to purchase an
aggregate of 171,730 shares of Common Stock.
ITEM 4. PURPOSE OF TRANSACTION.
The shares of Common Stock owned by the Reporting Persons were
acquired for investment purposes. The Reporting Persons have purchased and hold
the shares of Common Stock reported by them for investment purposes.
On May 11, 2005, one of the Reporting Persons, sent a letter
to the Issuer's board of directors requesting that (i) two nominees of the Fund
be appointed to serve on the Issuer's Board, (ii) the Issuer withdraw and amend
its recently-filed proxy statement relating to its 2005 annual meeting of
shareholders, to remove from shareholder consideration the proposal to amend the
Issuer's certificate of incorporation to permit a staggered board consisting of
three classes of directors, (iii) the Board conduct a thorough review of the
Issuer's operations and business model, with a view to maximizing financial
performance and limiting SG&A growth to ensure that the forecasted 50% revenue
growth the Issuer has publicly projected in fiscal 2005 translates into healthy
margin expansion and improved earnings as a percentage of overall revenues; and
(iv) that management compensation be better aligned with operating results and
shareholder return. The letter further states that in the event that the
Issuer's common shares continue in the Fund's view to remain undervalued, that
it may seek to accumulate additional common shares and become more actively
involved in the Issuer. The Issuer's Board has failed to respond to the May 11,
2005 letter.
On September 28, 2005, the Fund made an offer (the "Offer") to
the Issuer in a letter addressed to the Issuer's Board to invest $5 million in
the Issuer through the purchase from the Issuer of 3,333,333 shares of Common
Stock at a price of $1.50 per share, representing a premium of 13.6% over the
closing price of the Common Stock on the date immediately preceding the Offer.
On October 6, 2005, the Fund received a response from the
Issuer's Board that stated only that the Board reviewed the Offer and "does not
feel that this proposal is in the best interests of our shareholders (other than
Trinad)." The Issuer has failed to provide any further explanation or
justification for its response.
On October 18, 2005, the Fund sent another letter to the
Issuer's Board requesting that it immediately begin exploring strategic
alternatives to increase
shareholder value, including, without limitation, a debt or equity financing to
improve liquidity, one or more strategic acquisitions (combined with any
required financing), a merger of the Issuer with another company or a sale of
the Issuer, whether through the sale of its assets, a merger or consolidation or
otherwise.
Despite an announcement by the Issuer that it had amended its
existing Factoring Agreement, the Reporting Persons continue to believe that the
Issuer is facing a liquidity crisis. Further, to the knowledge of the Reporting
Persons, the Issuer has not received any other offers to make an equity
investment in the Issuer. The Reporting Persons continue to believe that the
Issuer would stand to benefit substantially by the infusion of additional equity
capital. Such equity capital would improve the Issuer's financial position and
increase the likelihood that it would be able to obtain additional, needed
equity capital and funds from additional borrowings, if necessary. Accordingly,
on October 28, 2005, the Fund made another offer (the "Revised Offer") to the
Issuer's Board to invest $7.5 million in the Issuer through the purchase from
the Issuer of approximately 4,285,714 shares of Common Stock at a price of $1.75
per share, representing a premium of more than 20% over the closing price of the
Common Stock on the date immediately preceding the Offer. The Revised Offer also
represents an increase of 16.7% in the per share price, and an aggregate
increase of $2,500,000, compared to the initial Offer. The Revised Offer was
subject to a satisfactory due diligence review of the Issuer and to majority
representation on the Issuer's Board of qualified individuals nominated by the
Fund . The Issuer's Board failed to respond to the October 28, 2005 letter.
On November 7, 2005, the Fund sent another letter to the
Issuer's Board in which it questioned the failure by the Issuer to respond to
the Fund's offer to provide $7.5 million in equity financing to the Issuer at a
price that represents a substantial premium to the then-trading price of the
Issuer's Common Stock. In that letter the Fund also requested that the Issuer
immediately call a special meeting of the shareholders so that the Issuer's
shareholders may immediately consider again whether a staggered Board is
appropriate given the Issuer's disappointing performance, and whether the
current members of the Board are suitable to continue to lead the Issuer.
On February 10, 2006, in the wake of the resignation of two
additional members of the Issuer's Board , the Fund sent another letter to the
Issuer's Board, in which the Fund requested the following:
o that the Issuer immediately move to create an independent board of
directors and appoint two designees of the Fund to the Issuer's Board,
to fill the vacancies recently created by the resignations of Messrs.
Halpin and Weisman;
o that Messrs. Jessie and Joey Sutton, the sons of Morris Sutton,
immediately resign or be removed as officers and employees of the
Issuer; and
o that Morris Sutton, the Chief Executive Officer and a member of the
Board of the Issuer, cease making threats to resign from the Issuer and
establish a new business in competition with the Issuer.
Once again, the Issuer failed to formally respond to this
letter.
The Fund continues to request that the Issuer immediately
create an independent board of directors and appoint two designees of the Fund
as discussed above, and that Messrs. Jessie and Joey Sutton, the sons of Morris
Sutton, immediately resign or be removed as officers and employees of the
Issuer. The Reporting Persons continue to believe that a more independent board
of directors would provide greater value to the Issuer and its shareholders, and
that the Board has improperly served to implement the personal directives of
Morris Sutton at a great cost to the Issuer and its shareholders. The Fund has
proposed that its two managing directors be appointed to the Issuer's Board to
fill the vacancies recently created by the unexpected resignations of Messrs.
Halpin and Weisman. In doing so, the Issuer would have a primarily independent
Board that is far more likely to serve and represent the interests of all of the
Issuer's shareholders and not merely one constituency led by Morris Sutton.
Further, the Reporting Persons believe that Messrs. Jessie and Joey Sutton do
little to further the Issuer's business and strategic objectives, and have been
placed in such high-paying positions of management as a result of Morris
Sutton's selfish desire to compensate his own children at the expense of the
Issuer and its shareholders.
The Fund had been advised by members of the Issuer's Board
that it would receive a response during the week of March 13th to its request to
appoint two nominees to the Board and to terminate Messrs. Jessie and Joey
Sutton. The Fund once again failed to receive a response within the time frame
and, as a result, the Fund has begun to take steps to more actively seek to
change the composition of the Issuer's Board and to effect the other changes it
has been seeking, including, without limitation, by means of seeking to call a
special meeting of shareholders to elect a new slate of directors.
On March 24, 2006, the Fund delivered to the Secretary of the
Issuer the Notice notifying the Issuer of the Fund's intention to nominate three
(3) persons for election to the Board of Directors of the Issuer at the 2006
annual meeting of stockholders of the Issuer. As previously disclosed on several
occasions, the Fund has sought to create a more independent Board and has
requested that the Issuer take all appropriate action to appoint independent
members designated by the Fund. The Fund intends to prepare and file with the
Securities and Exchange Commission (the "SEC") a proxy statement and form of
proxy relating to the nomination of three persons to serve as members of the
Issuer's Board.
The Reporting Persons have made numerous requests that the
Issuer and the Board take actions to improve the performance and financial
condition of the Issuer and to establish a more appropriate corporate governance
structure. To date, all of the Fund's requests have been ignored, apparently for
the purpose of furthering Morris Sutton's objective to entrench his family
members and operate the Issuer for the financial benefit of himself and his
family members. The Fund believes that a number of factors clearly support this
conclusion and the necessity of immediately expanding the current Board
(consisting of three individuals) through the election of experienced
independent directors that are capable of adding value to the Issuer. These
factors include the following:
o The Issuer continues to experience substantial and increasing
reductions in revenues and substantial losses. The Issuer had revenues
of approximately $59.7 million and it incurred an operating loss of
approximately $70.1 million in fiscal 2005, compared to revenues of
approximately $120.9 million and an operating profit of $12.1 million
in fiscal 2004.
o Notwithstanding these increasingly poor results from operations, based
on the Issuer's filings with the SEC, in fiscal 2005 the Issuer:
o paid Jesse Sutton, the son of Morris Sutton, more than
$555,000 in total cash compensation, granted him options to
purchase 90,000 shares of Common Stock having a present value
as of the grant date of $288,000;
o paid Joseph Sutton, the son of Morris Sutton, more than
$246,000 in total cash compensation, granted him options to
purchase 51,000 shares of Common Stock having a present value
as of the grant date of $163,200; and
o engaged a printing and packaging company in which Morris
Sutton's brother is a co-owner, for which the Issuer has
received bills of approximately $2,300,000.
o In February 2006, the Issuer named Morris Sutton, the Chairman and a
principal shareholder of the Issuer, President and Interim Chief
Executive Officer.
o Also in February 2006, two of the Issuer's independent directors
resigned because, according to disclosure made by the Issuer in a Form
8-K, "[the independent directors] believed Morris Sutton would not
commit to continuing his association with the Issuer if the independent
directors were to insist upon the resignation of certain other members
of the Sutton family employed by the Company."
o On March 16, 2006, the Nasdaq Stock Market ("Nasdaq") notified the
Issuer that based on the Issuer's Form 10-Q for the period ended
January 31, 2006, the Issuer no longer satisfies the requirement for
continued listing on the Nasdaq Capital Market set forth in Marketplace
Rule 4310(c)(2)(B), which requires the Issuer to have a minimum of $2.5
million in stockholders' equity, $35.0 million market value of listed
securities, or $500,000 of net income from continuing operations. The
Company is required to present its plan to achieve and sustain
compliance to Nasdaq on or before March 30, 2006.
o On January 25, 2005, one day before the Issuer's offering of six
million shares of Common Stock, Albert Ades, the father-in-law of Jesse
Sutton, filed a notice of his intention to sell 25,000 shares of the
Issuer's Common Stock, resulting in gross proceeds of more than
$343,000. This offering has been the subject of numerous lawsuits based
on extensive violations of securities laws, described below.
o There have been numerous lawsuits filed against the Issuer and its
current and former directors, including:
o On December 2, 2005, a vendor filed a complaint against the
Issuer in the Supreme Court of the State of New York, County
of New York, alleging breach of contract and failure to pay in
connection with services rendered. The complaint seeks
approximately $2.6 million in damages plus interest and costs,
including attorney's fees.
o In July 2005, four purported class action complaints were
filed against the Issuer and several current and former
directors and officers of the Issuer in the United States
District Court for the District of New Jersey. On September
12, 2005, a fifth purported class action complaint was filed
in the same court on behalf of a class of individuals who
purchased shares of the Issuer's Common Stock in the Issuer's
January 26, 2005 offering of six million shares of Common
Stock (the "Offering"). The complaint named as defendants the
Issuer, several current and former directors and officers of
the Issuer, and certain financial institutions who served as
underwriters with respect to the Offering. The Complaint
alleges that the Registration Statement and Prospectus filed
with the SEC in connection with the Issuer's Offering and
certain of the Issuer's press releases and other public
filings contained material misstatements and omissions about
the Issuer's financial condition and prospects as well as its
products. Lead Plaintiff asserts a claim under Section 11 of
the Securities Act against all the defendants on behalf of
investors who purchased shares in the Offering. It asserts a
Section 12(a)(2) claim against the Issuer and the financial
institutions who served as underwriters in connection with the
Offering, and a Section 15 control person claim against
defendants Carl Yankowski, Jan Chason, Jesse Sutton, Joseph
Sutton, and Morris Sutton (the "Defendants"). Lead Plaintiff
also asserts a claim under Section 10(b) of the Exchange Act
and Rule 10b-5 promulgated thereunder against the Issuer and
the Defendants and a claim under Section 20(a) of the Exchange
Act against the Defendants. The Complaint seeks damages in an
unspecified amount.
o As the Reporting Persons have previously announced, the Issuer has
rejected generous financing offers from the Fund. The Board's failure
to respond to our many overtures has resulted in the continued
deterioration of the Issuer. On October 28, 2005, the Fund made an
offer (the "Offer") to the Board to invest $7.5 million in the Issuer
through the purchase from the Issuer of approximately 4,285,714 shares
of the Issuer's Common Stock at a price of $1.75 per share. The Offer
price represented a premium of more than 20% over the closing price of
the Common Stock on the date immediately preceding the Offer, and
represents a premium of nearly 48% over yesterday's closing price of
the Common Stock. To the shock and dismay of us and our fellow Issuer
shareholders, the Board did not even bother to respond to our Offer. At
the time, and in retrospect, it is clear that the Board's inaction
amounted to a gross and blatant disregard of the interests of the
Issuer and its shareholders.
Further, the Fund continues to request that Messrs. Jessie and
Joey Sutton, the sons of Morris Sutton, immediately resign or be removed as
officers and employees of the Issuer. The Reporting Persons continue to believe
that a more independent board of directors would provide greater value to the
Issuer and its shareholders, and that the Board has improperly served to
implement the personal directives of Morris Sutton at a great cost to the Issuer
and its shareholders. In appointing additional independent members to the Board,
the Issuer would have a primarily independent Board that is far more likely to
serve and represent the interests of all of the Issuer's shareholders, and not
merely one constituency led by Morris Sutton. Further, the Reporting Persons
believe that Messrs. Jessie and Joey Sutton do little to further the Issuer's
business and strategic objectives, and have been placed in such high-paying
positions of management as a result of Morris Sutton's selfish desire to
compensate his own children at the expense of the Issuer and its shareholders.
On March 24, 2006, the Fund made an offer to the Issuer in a
letter addressed to the Issuer's Board to invest $3 million in the Issuer
through the purchase from the Issuer of 2,000,000 shares of Common Stock at a
price of $1.50 per share, representing a premium of 27.1% over yesterday's
closing price of the Common Stock. The Fund believes that such financing is
required by the Issuer immediately both to meet internal liquidity requirements
and to address the requirements of Nasdaq described above with the goal of
avoiding delisting of the Common Stock. In accordance with the letter, the
Fund's offer expired on Wednesday, March 29, 2006.
The Fund intends to promptly file a law suit against the
Issuer and several current and former directors and officers of the Issuer. The
complaint may allege, among other things, that the defendants breached their
fiduciary duties while managing the business affairs of the Issuer, engaged in
self-dealing transactions to further their personal interests, usurped corporate
opportunities, mismanaged and/or wasted the Issuer's assets and used poor
judgment in appointing certain officers of the Issuer. The complaint may also
seek to enjoin the Issuer from taking certain corporate actions.
On March 29, 2006, the Fund received a letter from the Board
(the "Board Letter") rejecting the Fund's financing offer and making certain
other allegations. On March 30, 2006, the Fund delivered the Letter to the
Issuer's Board in response to the Board Letter. A copy of the Letter is attached
as Exhibit A hereto and is incorporated herein by reference.
The Reporting Persons may at any time, or from time to time,
acquire additional shares of Common Stock or dispose of their shares of Common
Stock, propose or pursue any of the foregoing actions or matters or change their
intentions with respect to the matters referred to herein.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date hereof:
(i) The Fund may be deemed to beneficially own 2,543,984
shares of Common Stock, representing approximately 11.43% of the
outstanding shares of Common Stock.
(ii) Robert S. Ellin may be deemed to beneficially own
2,932,394 shares of Common Stock, representing approximately 13.17% of
the outstanding shares of Common Stock, including: (A) 33,856 shares of
Common Stock owned directly by Robert S. Ellin; (B) 2,543,984 shares of
Common Stock owned by the Fund; (C) 47,656 shares of Common Stock owned
directly by Nancy J. Ellin, the spouse of Robert S. Ellin; (D) 225,456
shares of Common Stock owned directly by Atlantis, a Delaware
corporation of which Nancy J. Ellin is the sole stockholder; and (E)
81,442 shares of Common Stock owned by the Plan. Mr. Ellin disclaims
any beneficial ownership of shares of Common Stock held by the Fund
except to the extent of (1) his indirect beneficial ownership as the
managing member of Trinad Advisors GP, LLC, the general partner of a
principal stockholder of the Fund, and (2) his indirect beneficial
ownership as a limited partner of the Fund. Mr. Ellin also disclaims
any beneficial ownership of shares of Common Stock owned directly by
Mrs. Ellin, Atlantis and the Plan.
(b) As of the date hereof:
(i) The Fund has sole power to vote and dispose of 2,543,984
shares of Common Stock.
(ii) Robert S. Ellin has sole power to vote and dispose of
33,856 shares of Common Stock and shared power to vote and dispose of
2,898,538 shares of Common Stock, reflecting, (A) 2,543,984 shares of
Common Stock owned by the Fund; (b) 47,656 shares of Common Stock owned
directly by Nancy J. Ellin, the spouse of Robert S. Ellin; (C) 225,456
shares of Common Stock that are owned directly by Atlantis; and (D)
81,442 shares of Common Stock owned by the Plan. Mr. Ellin disclaims
any beneficial ownership of shares of Common Stock held by the Fund
except to the extent of (1) his indirect beneficial ownership as the
managing member of Trinad Advisors GP, LLC, the general partner of a
principal stockholder of the Fund, and (2) his indirect beneficial
ownership as a limited partner of the Fund. Mr. Ellin also disclaims
any beneficial ownership of shares of Common Stock owned directly by
Mrs. Ellin, Atlantis and the Plan.
(c) The following Reporting Persons have effected the
following transactions with respect to shares of the Common Stock since
the date of the previous amendment number 10 to the Schedule 13D:
On March 27, 2006, the Fund purchased 100,000 shares of Common
Stock through an open market transaction at a price of $1.2113 per share.
On March 29, 2006, the Fund purchased 5,510 shares of Common
Stock through an open market transaction at a price of $1.2227 per share.
On March 29, 2006, the Fund purchased 66,220 shares of Common
Stock through an open market transaction at a price of $1.2861 per share.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
Not applicable.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A: Letter dated March 30, 2006 from Trinad Capital
Master Fund Ltd. to the Board of Directors of
Majesco Entertainment Company
SIGNATURES
After reasonable inquiry and to the best knowledge and belief
of the undersigned, the undersigned certifies that the information set forth in
this statement is true, complete and correct.
Dated: March 31, 2006
TRINAD CAPITAL MASTER FUND LTD.
By: Trinad Capital L.P.
By: Trinad Advisors GP, LLC
By: /s/ Robert S. Ellin
--------------------------------
Robert. S. Ellin, Managing Member
/s/ Robert S. Ellin
-------------------------------------
Robert S. Ellin
/s/ Nancy J. Ellin
-------------------------------------
Nancy J. Ellin
ATLANTIS EQUITIES, INC.
/s/ Nancy J. Ellin
-------------------------------------
By: Nancy J. Ellin, President
ROBERT S. ELLIN PROFIT SHARING PLAN
/s/ Robert S. Ellin, Trustee
-------------------------------------
By: Robert S. Ellin, Trustee
TRINAD CAPITAL MASTER FUND LTD.
By: Trinad Capital L.P.
By: Trinad Advisors GP LLC
By: /s/ Robert S. Ellin
--------------------------------
Name: Robert S. Ellin
Title: Managing Member