T-HQ revamps agreement with Catapult for XBAND Modem

Business Wire, June 13, 1995

CALABASAS, Calif.--(BUSINESS WIRE)--June 13, 1995--T-HQ Inc. (NASDAQ:TOYH) has entered into a new agreement with Catapult Entertainment Inc. related to the marketing and distribution of the XBAND Video Game Modem.

Under the agreement, Catapult purchased T-HQ's inventory and accounts receivable related to the XBAND Modem for approximately $3.2 million. Of such amount, approximately $1.2 million was paid at the closing, and the remaining $2.0 million would be received by T-HQ upon conclusion of equity financings by Catapult, in which case T-HQ would receive a specified percentage of the proceeds from any such financing or upon certain other conditions described in the agreement.

T-HQ continues to distribute the Sega Genesis and Super Nintendo Entertainment System versions of the XBAND Modem for a fee. T-HQ will also receive a specified percentage of any profits generated from the 16-bit network operated by Catapult.

Brian J. Farrell, president and CEO of T-HQ, said: "This is a much-improved arrangement between T-HQ and Catapult. It gives us the opportunity to recoup a large portion of our investment and to focus on our core software publishing business. Completing this transaction, along with the continued timely shipment of our software products and reductions in expenses, will assist T-HQ in achieving its goal of returning to profitability."

T-HQ officials also noted that the company has begun shipment of "NHL Hockey `95" and "PGA EUROPEAN TOUR" for the Game Boy, the third and fourth such titles to be launched pursuant to its agreement with Electronic Arts.

To date in 1995, T-HQ has shipped eight new software titles, as compared with nine for all of 1994. The company also said it plans to ship "Jungle Strike" for the Game Boy and Game Gear systems later this month, concurrent with the shipment of "Jungle Strike" for the Super Nintendo Entertainment System by Electronic Arts.

T-HQ markets and publishes interactive entertainment software worldwide for a variety of hardware platforms. Most of the company's products are based on licensed properties from popular movies, television series and arcade games, as well as from sports and other entertainment arenas. T-HQ will publish more than 25 conversions of premiere Electronic Arts/EA SPORTS titles for the portable gaming market.

T-HQ has headquarters in Calabasas and is publicly traded on NASDAQ under the symbol TOYH.

CONTACT: T-HQ Inc., Calabasas

Germaine Gioia, 818/223-3112, media relations

Elizabeth Greene, 818/223-3116, investor relations