Posts Tagged ‘videogames’

Article from NYTimes.

With Andrew Mason’s forced resignation from Groupon on Thursday, the career of one of the most unusual corporate chieftains has ended.

And what an eclectic journey it has been for the onetime darling of Silicon Valley, which ascended with blinding speed, then crashed just as quickly.

Though Mr. Mason’s departure from the four-year-old company he founded had been speculated about for some time — certainly in light of Groupon’s poor financial performance since its initial public offering — the exit was finalized only on Thursday morning, according to people briefed on the matter.

It was little surprise, coming after yet another disappointing quarter, in which the company missed analyst estimates and posted revenue guidance that also fell short of expectations. The company’s stock slid 24.3 percent on Thursday, to $4.53.

That valued Groupon at just $3 billion — after the company went public in late 2011 at a $12.7 billion valuation.

After meeting Thursday morning, Groupon’s board requested that Mr. Mason resign. He agreed.

Mr. Mason will be replaced on an interim basis by an “office of the chief executive” formed Thursday morning, made up of Eric Lefkofsky, Groupon’s chairman and co-founder, and Ted Leonsis, the board’s vice chairman.

Mr. Mason will still have some presence at the company: He currently owns about 7 percent of Groupon’s stock, and controls a much larger percentage of its voting power.

Mr. Lefkofsky bid Mr. Mason farewell in a fairly standard corporate statement: “On behalf of the entire Groupon board, I want to thank Andrew for his leadership, his creativity and his deep loyalty to Groupon. As a founder, Andrew helped invent the daily deals space, leading Groupon to become one of the fastest growing companies in history.”

In typical fashion, Mr. Mason described the circumstances a bit more trenchantly. Here’s an excerpt from a letter he sent to company employees on Thursday, which he posted online “since it will leak anyway”:

After four and a half intense and wonderful years as C.E.O. of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today.

He also references “Battletoads,” a cult video game for the Nintendo Entertainment System that a small minority of DealBook remembers as being sometimes absurdly difficult.

A Pittsburgh native who graduated from Northwestern University with a degree in music, Mr. Mason rarely ever seemed like the corporate type. He originally created Groupon as part of a bigger Web venture, focusing on daily deals as the most commercially viable part of that start-up.

Even then, he was known for his quirky humor. Three years ago, Mr. Mason made a video for a fictional “Monkey for a Week” lending service.

As Groupon grew, Mr. Mason’s peculiar demeanor sense of humor continued to garner attention. His grooming came up at least once, as Silicon Valley denizens pondered whether he’d hit a tanning salon before appearing at a TechCrunch conference in 2010 with a prominent bronze glow.

And in 2011, Mr. Mason had an unusual way of not responding to a question by All Things D’s Kara Swisher that he didn’t want to answer: with a “death stare.”

Groupon's I.P.O. roadshow video presentation.Groupon’s I.P.O. roadshow video presentation.

By that fall, as the daily deals giant was preparing to go public, Mr. Mason took on a more professional cast. In a video to prospective investors, the Groupon chief executive looked a bit more professional, complete with slicked-back hair and a dark suit and tie.

It was a persona he settled into post-I.P.O., usually delivering sober financial information in his public appearances.

But other parts of the run-up to Groupon’s I.P.O. in late 2011 were hardly laughing matters. The company took fire for introducing controversial accounting measures in its prospectus, which critics contended masked losses and unfairly diminished a need to spend heavily on marketing.

The Securities and Exchange Commission queried the company over its financial information in a series of letters that were eventually made public.

In August of 2011, Groupon announced that it was dropping the metric.

Two months later, the company revised its prospectus again to further clarify additional financial reporting measures, as well as to include an internal e-mail from Mr. Mason that was subsequently leaked to the press.

Even after going public, Groupon still ran into the occasional issue. It restated quarterly results last year after disclosing a “material weakness” in its internal accounting controls.

For all those troubles, Mr. Mason accepted responsibility.

“From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable,” he wrote in his letter…

Read more here.

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UnknownMaintaining continued growth and leadership in the evolving children’s application market requires maximizing the value of our products to serve parents and children.  In this paper, we discuss how infusing Common Core State Standards into our apps/games and conducting our business in a socially responsible manner contributes to building trust among our target purchasers and to our future success.


To demonstrate how Cupcake Digital is maximizing its potential for leadership in the children’s app market by infusing its apps with educator-developed learning moments specifically aligned with Common Core State Standards (CCSS).


The Common Core State Standards will play a critical role in the education of America’s children going forward.

The Common Core State Standards Initiative is a state-led effort — developed in collaboration with teachers, school administrators and experts – to provide a consistent framework that will help ensure children are college and career-ready by the end of high school. The CCSS set the requirements for children K-12 in all academic subjects and provide teachers and parents with a common understanding of what students are expected to learn.
However, as the introduction of the Common Core State Standards is in its earliest stages, communication to parents about this new concept and what is means to their children’s education is not yet clear or sufficient.

Common Core: A Social Responsibility

Cupcake Digital is committed to being a thoughtful, socially responsible company that parents, caregivers and educators can trust. We believe that producing apps that not only entertain, but also help ready a child to meet nationally acknowledged academic requirements can only enhance our own potential for success.

The apps and games we produce are based on well-known, highly successful children’s entertainment media properties.  These delightful stories are adapted in the form of deluxe storybook experiences and interactive games.

The infusion of learning moments — aligned with Common Core State Standards – enables us to maximize the educational value of our apps and games.

Cupcake Digital has taken a leadership role in the curriculum-infused children’s app market by creating free, educator-developed worksheets and activities that supplement learning moments in the story.

While 47 states have committed to adopting the Common Core Curriculum by 2014, awareness of the initiative’s specifics and value is not yet widespread.

Cupcake Digital has identified a clear opportunity to help inform parents about the Common Core State Standards – in layman’s terms – in the Common Core Corner at the end of each app.  It is intended to help parents understand how the app is preparing their children to meet the CCSS challenges at school and what their children are learning through the app’s activities and the process of reading the app itself.



Infusion of Common Core State Standards: Serious Business

“Digital media offers children unparalleled opportunities to learn, imagine, participate, practice, and create. But without a guidepost, we know parents, educators, and kids have difficulty finding engaging, enriching interactive experiences,” said Susan Crown, founder and chairman of SCE.

Cupcake Digital is one of the first companies in the children’s digital space to blend entertainment with Common Core State Standards learning moments, and we do so responsibly.

“The process of infusing our apps with CCSS was not one we approached lightly,” says Susan Miller, President and Co-founder of Cupcake Digital.  “To align our learning moments effectively with Common Core requirements, we looked to educational consultants  — experts in the Common Core State Standards – to work with us,” she continues.

An example of how CCSS-aligned learning moments are infused into Cupcake’s apps is attached. (link to examples provided at the end of this position paper) The example shown addresses the infusion of English language arts and mathematics activities in Wubbzy’s Dinosaur Adventure.

Cupcake is dedicated to the notion that there is room for fun in learning.  While our apps are infused with the CCSS, we make the learning process entertaining and thoroughly enjoyable!

Common Core: A Competitive Advantage

Cupcake Digital is one of the first companies in the children’s digital space to recognize the opportunity to serve parents and children better by maximizing the value of our products through the infusion of Common Core State Standards learning moments.  In so doing, we are also striving to help make CCSS easy to understand and easy to practice for parents and kids.

“As the children’s digital market floods with new products at exponential rates, parents will need guidance in choosing the highest quality products for their kids,” says Brad Powers, Chairman and CEO of Cupcake Digital.

“Our goal,” he adds, “is to be the number one choice among parents for apps that they can trust to entertain, inspire and help prepare young children for success in school and beyond.”

The Common Core State Standards are here to stay; and   national awareness of them will increase over the next two years. Cupcake Digital’s authority on the subject of CCSS and accountability for responsible infusion of the standards into our apps will continue to provide us a strong competitive edge.


Three games in Wubbzy’s Dinosaur Adventure are specifically designed to help prepare children to meet the requirements set forth for Kindergarten by the CCSS.  The games illustrate how Cupcake Digital blends entertainment and learning in games that are fun and fanciful, while also instructive.

Dino Alphabet Game

Children are asked to drag the dinosaur over the trees to eat all the letters. As the letters are eaten, the letter name is spoken by the narrator so that children can make the association.


The Dino Alphabet Game supports the English Language Arts CCSS for the foundation of reading, which require children to recognize and name all upper- and lowercase letters of the alphabet.

Dino Numbers Game

Children are asked to help the dinosaur to eat all the numbers from one to 10.  The numbers are read aloud, so that children can learn to recognize them.


The Dino Numbers Game supports math learning by motivating children to count a variety of quantities and numbers. CCSS requires children to be able to count to 100 by ones and by tens.

Dino Word Game

Children are asked to help the hungry dinosaur find some words to snack on. A word appears at the top of the screen and is read aloud.  Below the word is a list of three words.  The child must select the one that matches the word at the top of the screen.


Dino Word Game supports the English Language Arts CCSS requirement for children by teaching them to recognize a list of basic sight words that make up the majority of text and are critical to reading.

About Cupcake Digital Inc.
Cupcake Digital, Inc. was established in June 2012 with the intent of transforming children’s entertainment properties into deluxe story experiences infused with educational moments. Its first venture into digital applications was based on the Emmy Award-winning television series “Wow! Wow! Wubbzy!” The app immediately rose to # 1 and # 3 among children’s book apps on Amazon and iTunes respectively. Since then, every subsequent children’s story app created by Cupcake Digital has achieved a top 10 rating on Amazon. Headquartered in NYC, Cupcake Digital was founded by proven professionals in the fields of technology, family entertainment, publishing and brand marketing. In October of 2012, Cupcake Digital received its first round of private funding and has since gone on to partner with additional major children’s entertainment properties. For more information about Cupcake Digital Inc., please contact Carmen Hernandez at pr@cupcakedigital.com or visit www.cupcakedigital.com.

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Article from GigaOm.

For some odd reason, I felt that it was slim pickings when it came to stories for this weekend. It just might have been my NyQuil. Here are some great stories for you to enjoy while you relax over the next two days.

  • More drugs, more sports, same old Alex Rodriguez: By now you may have heard about New York Yankees third baseman Alex Rodriguez being embroiled in another performance-enhancing drugs scandal. Well, what you might not have done is read the whole 4,500 word piece that started it all. Miami New Times‘ Tim Elfrink in this old-fashioned investigative piece shows you don’t need to have a big budget to write stories that change the game.
  • In conversation with John Cheever: The Paris Review goes back in time and brings to us this conversation with one of America’s beloved writers.
  • Living the American Dream in West Bank: Vice‘s Kiera Feldman goes to hang out with Israel’s illegal homesteaders.
  • Home alone, no really: A Siberian family was cut off from the world for 40 years and lived blissfully unaware of World War II. Great piece.
  • The Art Collector: Steven Cohen, the man behind the hedge fund SAC Capital that is consistently in trouble with prosecutors over issues of insider trading, seems to spend hundreds of millions buying up rare and expensive art. I guess one has to do something with all that money. This is a great profile in n+1 magazine.
  • The parking meters and the coming revolution: Just a great little piece.
  • The spy novelist who knows too much: The New York Times reports on Gérard de Villiers, an 83-year-old Frenchman who writes pulp fiction books — four to five a year — and they are, well, literally ripped from the headlines. Someone please help me get the English translations.

Read more here.


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Gerbsman Partners (www.gerbsmanpartners.com) has been retained by Venture Lending & Leasing V, Inc. (“WTI”), the senior secured lender to Emergent Game Technologies, Inc., (“EGT”), (www.emergent.net) to solicit interest for the acquisition of all or substantially all of EGT’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “EGT Assets”).

Please be advised that the EGT Assets are being offered for sale pursuant to Section 9-610 of the Uniform Commercial Code. Purchasers of the EGT Assets will receive all of EGT’s right, title, and interest in the purchased portion of WTI’s collateral, which consists of substantially all of EGT’s assets, as provided in the Uniform Commercial Code.

The sale is being conducted with the cooperation of WTI and EGT. EGT has advised WTI that it will use its best efforts to make its employees available to assist purchasers with due diligence and assist with a prompt and efficient transition at mutually convenient time.


The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to the EGT Assets has been supplied by third parties and obtained from a variety of sources.  It has not been independently investigated or verified by WTI or Gerbsman Partners or their respective agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by WTI or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing (the “information”), as a statement, opinion, or representation of fact.  Please further note that all information provided herein relating to the operations of EGT’s business and its market positions relates to periods on or prior to October 31, 2010.  Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

WTI and Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of WTI’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the EGT Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of, WTI and Gerbsman Partners.  Without limiting the generality of the foregoing, WTI and Gerbsman Partners, and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the EGT Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum is not to be supplied to any other person without Gerbsman Partners’ prior consent.  The information contained herein is not subject to the Non-Disclosure Agreement, however any additional requested information will require execution of the attached NDA attached hereto as Exhibit A.


Emergent Game Technologies (“Company” or “”Emergent”) is a technology company that directly licenses and supports its products, Gamebryo® and Gamebryo LightSpeed®, to customers around the world.  Founded in 2000 with a mission of developing tools and technologies for 3D interactive entertainment, Emergent merged with NDL in 2005, the company that created the Gamebryo game development engine and tools.

The Company’s assets are well-positioned to capitalize on several industry trends – largely around online games and online distribution – which enable the potential for game developers to reach customers more effectively through direct relationships online and more efficiently by constantly developing new content.  Online game consumers have a rapidly growing appetite for progressive content.  Emergent’s products can help accelerate the demand for 3D content by providing a higher quality of supply in less time and with less risk.

Best known for its industry-leading 3D game engines, Gamebryo and Gamebryo LightSpeed, Emergent’s assets and intellectual property have been selected by studios around the globe to bring over 350 titles across more than 15 game genres to market. At any given time, Emergent is supporting over 100 projects in development and has sold over 490 licenses in the past five years. Titles using Emergent’s technology  include Game of the Year award-winning titles like Fallout 3, The Elder Scrolls IV: Oblivion, as well as critically acclaimed titles like Warhammer Online: Age of Reckoning, Civilization Revolution, QQ Speed, Divinity II – Ego Draconis, Dance on Broadway, LEGO Universe, Epic Mickey, Bully and more. Emergent’s assets and intellectual property allow studios to focus on creating innovative gameplay by enabling rapid prototyping and rapid iteration, and delivers proven production pipelines with real-time on-target updates for Microsoft’s Xbox 360, Sony’s PlayStation 3 system, Nintendo’s Wii and PC. As part of the international development community, Emergent provides world class support and technologies evolved from deep relationships with its developer partners.

Emergent is a privately-held, venture-backed company.  Some of Emergent’s investors include well-known organizations such as Worldview Technology Partners, Jerusalem Venture Partners, Hopewell Ventures and Cisco Ventures.  To date, Emergent has secured over $40 million in equity financing and raised over $4 million in venture debt financing from WTI.

Emergent is headquartered in Calabasas, California, and has offices in North Carolina, Texas, Tokyo, China and Korea. More information is available on Emergent’s website at http://www.emergent.net.

Great games in less time and with less risk:
Emergent expresses this goal in its incubation program aptly named the Game Team Initiative (“GTI”).  GTI is designed to fuel the burgeoning independent game development community, which was reinvigorated by the economic downturn in 2009, with the fundamental resources needed to compete on the world stage.   Emergent’s assets provide the best and the brightest developers a platform that allows new and innovative games to get on screen in less time and with less risk than ever before.  This intimate relationship is beneficial  in two ways as it continually builds a customer base, and adds the context and focus required to keep production processes on the cutting edge.  Emergent’s efforts have been successful in creating new customers both central to Los Angeles, CA – where such notable up and coming game teams as Big Red Button, Kung-Fu Factory, Killspace Entertainment and GameMechanic have all participated; and international, touching teams around the globe, such as Coldwood in Sweden, Bedlam in Canada, Epiphany in Australia, Acquire in Japan and Firehose in Boston.

Target Market:
The video game industry continues to be a growth markets with 7 percent compounded annual growth from 2009 to 2013 reaching $70.9B.  Important segmentation across online and traditional retail products, new device platforms, as well as western and eastern markets, provides the unique opportunity for an opportunistic buyer to use Emergent’s intellectual property  to apply its common underlying technologies across multiple sales opportunities. According to Niko Partners, a leading market intelligence firm, China game revenue CAGR will exceed 20 percent growing from $3.7B in 2009 to $9.2B in 2014.

Emergent’s clients range across a broad set of industries, covering traditional video games, to online persistent worlds, to academic environments, military simulations and large scale virtual worlds.  The installed base of users represents a valuable platform for future revenue streams.  The majority of Emergent’s revenue has been generated in video games, however approximately 14% has derived from other channels without substantial incremental product investment.  A customers overview includes:

·      Video games: Electronic Arts, Activision, THQ, Ubisoft, Sony, Bethesda, 2K, Atari, Disney

·      Online games: Tencent, Shanda, TheNine, NineYou, NC Soft, Kingsisle, EA Mythic, Trion

·      Military simulation:  USC ITC, Total Immersion, IP Keys, Lockheed

·      Education: USC, University of Pennsylvania, UNC, Nanyang Polytechnic

·      Other: Rio Tinto, Tacx, WMS, GTech

The accounts receivable base of Emergent is traditionally diverse, as no client historically represented over 10% of Emergent’s accounts receivable balance.

Proprietary Technology – Intellectual Property:
Gamebryo LightSpeed (“LightSpeed”) is the newest leap forward in game development technology delivering the only professional technology for start-to-finish multi-genre/multi-platform game development.  The Gamebryo LightSpeed game development system enables rapid prototyping, rapid iteration and real-time updates, simplifying game development through a data driven framework that opens doors to exciting gameplay possibilities.

LightSpeed is built on top of Gamebryo, the multiplatform engine and foundational technology with more than 350 game productions worldwide across every genre. LightSpeed adds a game framework, scripting system, tools, and extensible infrastructure.

LightSpeed provides a pipeline and runtime solution that allows programmers, artists, and designers to quickly stand up content; then rapidly and continuously iterate on game design, level design, gameplay mechanics, core logic, and game assets; transition to full production; and ship. LightSpeed’s functionality is designed to support two principal objectives of today’s game developers:

·      Rapid iteration:  change the art, entities, levels, and behaviors and see the effect in your game without recompiling or restarting. This minimizes the need for game restarts and reduces development delays.

·      Rapid prototyping and production:  quickly move game content into a playable form, enabling you to evaluate technology and gameplay mechanics and assess the look and feel of levels and assets, and build on that work throughout the production cycle.

Aimed to empower innovation, LightSpeed gives developers the tools to quickly realize ideas and be free to iterate throughout the development process.  From first construction through final polish, developers can iterate faster and get their playable design into the team’s and publishers’ hands faster.



·      Strong Growth in Profitability

USD   2005 PF 2006 Audited 2007 Audited 2008 Audited 2009 Audited 2010 YTD

Bookings       $3,423,000   $6,728,209    $10,696,682       $8,873,585       $11,912,613      $6,983,583

Revenue         3,423,000     6,276,083       9,491,308         8,617,604          12,213,826        5,901,836

COS                  410,760        496,383          358,155          1,909,690            2,550,689          669,574

GP                  3,012,240     5,779,700       9,133,153          6,707,914            9,663,137       5,232,262

OPEX             6,408,240   11,706,045      17,039,322        16,706,065         13,243,563       4,822,368

EBITDA         (3,396,000)  (5,926,345)    (7,906,169)         (9,998,151)          (3,580,426)        409,894

·      Attractive Industry – The fastest growing segment of video games is the online segment.  By 2014 it is predicted that over half the games sold will be downloaded.  Emergent is well-positioned to capitalize on major shifts in game design strategies, continuous production pipelines and online product delivery due to its technology and customer base with online games.

·      Market Leader in Asia – Emergent is the market leader in China and Korea, growth rates are consistently exceeding 20 percent annually.

·      Best in Class Technology – Emergent’s proven technologies are delivered in products that game developers know and trust all over the world.  Our code has been evolved over fifteen years, with over $40 million invested in USA software engineering efforts.

·      Proprietary Data Base of over 6,200 profiled developers with over 14,775 contacts.

·      Diversified International Client Base with Low Concentration

·      Excellent Relationships with major publishers and independent game development community – long-standing relationships with key players such as THQ, Disney, Ubisoft, Electronic Arts, Tencent, NC Soft, Shanda and other leading companies

·      Opportunity for Future Growth and Margin Improvement as the Company has already invested heavily (over 400 man years) in its core product architecture which can easily be extended into future platforms.  Further advancements can be done in the context of making games making additional investment recoupable through the revenues stream of games and traditional product licensing.

The reasons why Emergent’s assets are attractive are:

Emergent has historically experienced strong growth and is one of the leaders in the video game engine space. Recent working capital constraints and an overly leveraged balance sheet have created the opportunity for the company’s assets to be purchased.  The acquisition of these assets can enable the purchaser to realize significant short and long term value from Emergent’s assets and maintain the ability to quickly scale within the context of sufficient working capital and a stronger balance sheet.

Robust Growth: Since inception, the Company has grown very impressively, with revenues increasing from $3.4 million to $12.2 million between 2005 and 2009.

Market Position: The Company’s Gamebryo LightSpeed product was awarded the #2 game engine in the world by Develop Magazine in 2009 and remains one of the leaders among five major players in the game engine space in terms of market size and presence. Emergent’s dominance in China and Korea translates to a bold future in the west as our superior technology and proven success with eastern online games take shape in the west and influence the burgeoning online marketplace.

Gamebryo LightSpeed Benefits:
With Gamebryo LightSpeed, Emergent continues a long heritage of dedication to genre and platform diversity, truly enabling our customers’ visions.  Some of the benefits to using LightSpeed include:

·       Rapid Prototyping and Production:  Build a prototype quickly and easily – then build upon it.  When you build your prototype with Gamebryo LightSpeed, you’re building your game. Everything you develop for your demo moves directly into your game, making Gamebryo LightSpeed your prototype and your production solution.

·       Rapid Iteration:  Workflow enablers, real-time updates, and tools usability and functionality unblock artists and designers and increase production efficiency. Streamline the creation of scenes, levels, and worlds. Iterate with gameplay mechanics, look-and-feel, and art assets in more detail with less time, to get your game looking and playing the way you want.

·       Multi-Platform:  All of Emergent’s products are built on a common architecture, but are have targeted for optimization on features and functionality for each specific platform. So even if a studio “only” develops a single PC, Xbox 360, PS3, or Wii title, the studio can rest assured that it’s choosing a proven technology solution optimized for that specific particular platform. Whether you are developing serially or concurrently, Gamebryo LightSpeed maximizes your investment, allowing cross platform games to cost less and deliver faster! Using LightSpeed gives you more options for maximizing your commercial return by giving you the technical option to target multiple platforms – and minimizes risk and cost if the decision happens to be made late in the project.

·       Modular and Extensible: Middleware is not a “one-size fits all” technology, and it’s not “your game in a box” (otherwise, everyone would be making your game out-of-the-box). Take the pieces of the tech you want, jettison the rest, extend it for your particular genre, your game, your implementation. Because it’s middleware, you’re starting with a deep technology layer, and you can spend the bulk of your production time differentiating your game – not fighting to make the technology support it.

·       Proven and Reliable: Emergent’s products have been part of over 350 games worldwide in every genre. You don’t have to question whether LightSpeed can be used to create a game in a particular genre – it’s been done. And you can look at commercial examples, talk to game teams in the community, and re-use technology and lessons learned from the thousands of folks who have gone before you. Deeper integrations with other best-of-breed game technologies so you can further leverage the investments you’ve already made.

World-Class Product Support & Community (Pulse):
The Pulse community content and support web site includes IP in the form of knowledge base articles, support responses, forum contents, and other materials. This information is necessary for maintaining future support of customers, and is highly valuable in training future support staff and maintaining customer relations.

Extensive Bug Tracking System & Library (DevTrack):
The DevTrack bug database is valuable for its historic information on issues and fixes that have been applied, and its insight into future planned features and known issues with the product. For example, it could be used to estimate the time necessary to reduce a found defect count by a certain amount.  Years of customer support and testing have generated a massive knowledgebase.

Diversified Client Base:
The Company has over 400 past and 40 active support clients engaged in a wide variety of consumer and business-oriented 3D interactive projects. This allows the Company to maximize the revenue and profitability of the products it creates by delivering a flexible system that is appropriate to a wide client base.  In addition, by establishing a diverse customer base, the Company can avoid fluctuation in its revenues caused by adverse changes affecting any particular client industry category.

Certified Partners:
The Company is a licensed tools and middleware provider for Sony, Microsoft and Nintendo enabling it to create and license products that run on these platform holders closed environments.  Emergent also has strategic relationships with Intel, NVIDIA and AMD where research and development efforts push the boundaries of PC related graphics and computer processing.  Finally, the Company has 88 partner integrations, enabling large and small complementary products from other middleware providers to easily integrate into its products.

Trademarks and Patents:
The Company holds trademarks for Emergent, Gamebryo, LightSpeed, and Floodgate, in the US and various territories around the world. The Company holds on patent for Floodgate.

Management Team at Emergent (for information purposes only)

Scott M. Johnson, President & CEO:  Scott has worked with Emergent since 2006 and has driven the company’s growth four-fold, expanding the business world wide. Since taking over as Emergent’s CEO in 2009, he led the company to four consecutive quarters that exceeded financial expectations and seen strong continued growth in revenues worldwide. Scott’s strong relationships have forged licensing deals with the industry’s leading developers and publishers such as THQ, Disney Interactive, Electronic Arts, Square Enix, Tencent, Shanda,  Ubisoft and Atari.

Prior to joining Emergent, Scott was co-founder and CEO of Mobility Entertainment (MENT), a successful mobile entertainment developer that was purchased by Foundation 9 and delivered more than 20 mobile games to market. Before launching MENT, he spent seven years in various executive positions with Vivendi, serving as vice president of Vivendi Universal Games, as vice president and chief financial officer for Universal Interactive, managing core franchises like Crash Bandicoot, Lord of the Rings and Spyro the Dragon, and helping to launch Vivendi’s Black Label Games. Scott began his career in finance at Deloitte & Touche LLP.  He is a Certified Public Accountant and an alumnus of Harvard Business School.

Katie Morgan, Consultant: Katie managed the sales, support and marketing staff and was responsible for all customer relationships, as well as defining the company’s distribution strategies, including pricing, licensing models, customer support and marketing communications. Katie holds a Bachelor of Science in Operations Research and Industrial Engineering from Cornell University and a Master of Business Administration from Stanford University.

David Brame, Vice President of Sales in Asia:  David is a very creative negotiator with 45 years of success in finding solutions for customers and articulating those solutions with a resultant close in business.  He has served Emergent for eight years, is a shareholder in the company, and is highly knowledgeable in large company organizations, purchasing practices and contract requirements selling to game companies and publishers in Asia.  He has a history of meeting or exceeding revenue targets for the Company, most recently exceeding quota in Asia (2009) and successfully maintaining on target performance through 3Q 2010, contributing over 50% of the company’s revenue.  David has years of experience building rep channels including a very productive channel in Korea (Gamebase) and a team in China which provides the ability to access the fastest growing game market in the world. David holds an undergraduate degree in Industrial Technology with a concentration in Electronic Design from East Carolina University and a Masters in Industrial Technology from East Carolina University.

Tim Page, Director of Sales Americas & EMEA: Tim has over 10 years experience selling technology products in the videogame business.  His long-standing relationships with developers and publishers have forged licensing deals with the industry’s leading developers and publishers such as Disney, Ubisoft, 2K, IP Keys, and Sony.  Prior to Emergent, Tim held various sales positions with Criterion Software (a subsidiary of Electronic Arts).  During Tim’s tenure in the middleware business, he has been responsible for selling technology solutions that include audio, physics, visibility, graphics, compilers, and A.I.  Tim holds a Bachelor of Business Administration in Marketing from Texas Tech University.

Marc Levy, Director of Finance: Marc manages the daily financial, accounting and human resources areas. Before joining Emergent, Marc worked at Indymac Securities Corp and Countrywide Securities Corp as Vice President Credit Risk Management.  He was responsible for trading controls as well as counterparty risk.  As Vice President at Countrywide Securities, he established and created the Credit Department.  He is also a part time instructor at Los Angeles City College.   Marc holds a Bachelor of Science in Finance from California State University, Los Angeles and a NASD Series 27 license.

Board of Directors for Emergent (for information purposes only)

Scott M. Johnson, President and CEO
Thomas E. Parkinson, Hopewell Ventures
Mathew J. McCue, Hopewell Ventures
Pete Goettner, Worldview Technology Partners
Gadi Triosh, Jerusalem Venture Partners
Gina Dubbe, Walker Ventures

WTI is seeking a buyer of the Emergent’s Assets.  Interested parties may bid on Emergent’s assets, which include its products, core technologies, customer support systems, bug fix library and customer contracts, enabling the purchaser to leverage Emergent’s assets and relationships to obtain new sales, enhance revenue streams or accentuate or augment their existing business.

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a nondisclosure agreement (attached hereto as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence “war room” documentation (the “Due Diligence Access”).  Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the EGT Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of WTI,  Gerbsman Partners, or EGT, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and WTI, EGT, and Gerbsman Partners (and their respective, staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the EGT Assets.  Sealed bids must be submitted so that they are actually received by Gerbsman Partners no later than Friday, December 10, 2010 at 3:00 p.m. Pacific Time (the “Bid Deadline”) at EGT’s office, located at 5016 N. Parkway Calabasas, Suite 210, Calabasas, California 91302.  Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable.  All bids must be accompanied by a refundable deposit check in the amount of $250,000 (payable to Venture Lending & Leasing V, Inc.).  The winning bidder will be notified within 3 business days of the Bid Deadline.  Unsuccessful bidders will have their deposits returned to them within 3 business days of notification that they are an unsuccessful bidder.

WTI reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all of the assets from sale.  Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

WTI will require the successful bidder to close within a 7 day period.  Any or all of the assets of EGT will be sold on an “as is, where is” basis, with no representation or warranties whatsoever.

All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the EGT Assets shall be the sole responsibility of the successful bidder and shall be paid to WTI at the closing of each transaction.For additional information, please see below and/or contact:

Steven R. Gerbsman
Gerbsman Partners
+1 415 456-0628

Dennis Sholl
Gerbsman Partners
+1 415 457-9596

Kenneth Hardesty
Gerbsman Partners
+1 408 591-7528

[1] All information provided herein relating to the operations of EGT’s business and the market positions relates to periods on or prior to October 31, 2010.  Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

[2] The biographical information concerning the current management of EMERGENT is included for information purposes only.  Although this sale is being conducted with EMERGENT ‘s cooperation, this sale is strictly an asset sale offered by WTI as EMERGENT ‘s senior lender pursuant to Article 9 of the Uniform Commercial Code.  WTI HAS NO ARRANGEMENT PURSUANT TO WHICH BUYER OF THE EMERGENT ASSETS COULD BE ASSURED OF THE FUTURE SERVICES OF ANY EMERGENT OFFICERS OR EMPLOYEES.

[3] The biographical information concerning the current Board of Directors of EMERGENT is included for information purposes only.  Although this sale is being conducted with EMERGENT ‘s cooperation, this sale is strictly an asset sale offered by wti as EMERGENT ‘s senior lender pursuant to Article 9 of the Uniform Commercial Code.  WTI HAS NO ARRANGEMENT PURSUANT TO WHICH BUYER OF THE EMERGENT ASSETS COULD BE ASSURED OF THE FUTURE SERVICES OF ANY EMERGENT board members.

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