MIAMI - Despite a very volatile market for technology stocks, IntraCorp Entertainment Inc., a local developer and publisher of entertainment software, plans raise about $31 million in an initial stock offering.
That's based on an offering of 2.85 million shares at $11 per share, the midpoint of the $10 to $12 per share range. Some 1 million shares are being offered by company executives; Leigh M. Rothschild, the president, chief executive officer and chairman of IntraCorp, is registering 479,738 shares.
After the offering, management's stake will drop to 46.8 percent from 73.4 percent. Rothschild will own 45.1 percent of the stock, which will trade on Nasdaq under the symbol ICEC.
The company will realize about $17.7 million in net proceeds from the offering; it will not receive any of proceeds from shares sold by selling stockholders. In the prospectus, IntraCorp said it will use the proceeds to repay debt and for general corporate purposes.
Wheat First Butcher Singer and Volpe, Welty & Co. are underwriting the offering.
Citing Securities and Exchange Commission "quiet period" rules, IntraCorp executives wouldn't comment on the offering.
Founded in 1985, Intracorp has lost money in each of the last three fiscal years and had an accumulated deficit of $4.9 million as of Sept. 30. The company did earn $177,309 for the three months ended Sept. 30, but one game accounted for some three-quarters of the period's sales.
Intracorp's revenues more than doubled in fiscal 1995, which ended June 30. But at $8.1 million a year, the company is still a small player in a highly competitive industry, dominated by giants like Broderbund Software, Electronic Arts and Lucas Arts Entertainment Co.
Rothschild told a local reporter last year that he expected IntraCorp to be a $100 million software company in the next few years. "We are only limited by our imagination," he was quoted as saying.
But other game software companies, notably North Miami Beach's Gametek Inc., have experienced growing pains. Gametek went public in January 1994 at $9 per share with ambitious growth plans. But since then, the company has seen losses, the departure of its founder and chairman, and a recent downsizing. On Tuesday, Gametek stock closed at $1.625.
Rothschild, 43, started his company out of his home ten years ago. A University of Miami graduate, Rothschild had been in the real estate and video businesses.
IntraCorp's first product, a sex compatibility game called Love Quest, was endorsed by Dr. Joyce Brothers, who became a company shareholder.
From there, IntraCorp began developing games based on hit movies, TV shows and personalities. The company uses both in-house and independent programmers to develop software. Based out of offices on Brickell Key, it has 80 employees, including a 42-person research and development staff in offices in South Florida and Texas.
IntraCorp has published more than 50 action, adventure and other games for use on home PCs. It has licensing agreements with motion picture companies, several popular authors and actor William Shatner. The company sells the software under its Capstone, The Next Move Series and Three-Sixty labels.
Titles include Miami Vice, Home Alone, Wayne's World and Trump Castle, plus Witchaven, TEKWAR and Corridor 7. In its prospectus, IntraCorp said Witchaven accounted for some 74 percent of net product sales for the first quarter of fiscal 1996.
Other software products include Business Card Maker and Bumper Sticker Maker, which are targeted to small businesses.
But in the highly competitive game software business, a company is only as good as its last hit. It's tough to keep up with technological changes and customer platform preferences. Competition for shelf space can be intense, and the Internet ... well, that presents a whole new set of challenges and opportunities.
In its prospectus, IntraCorp acknowledged the intense pressure to produce hits.
"The company's continued success depends primarily on the timely introduction of successful new products or enhancements of exist