Adrenalin, McGlen Micro Merger Planned

Tustin-based McGlen Micro Inc. has agreed to be acquired by a Los Angeles video-game developer in a reverse merger that will leave McGlen Micro owning most of the surviving company.

Adrenalin Interactive Inc. in Los Angeles said it will purchase McGlen Micro in an all-stock deal, but could not say how many shares are involved or what percentage of the merged company will be held by McGlen Micro owners, other than that it will be “a substantial majority of the stock.”

“It’s at such a preliminary stage that we don’t have all the answers,” said Jay Smith, Adrenalin’s chief executive.

The company said it will have a definitive agreement within 30 days. Even though McGlen Micro’s owners, which number fewer than 20, will have majority ownership of the merged company, Adrenalin managers will maintain control, Smith said.

McGlen Micro has fewer than 30 employees and last year had revenues of $16.5 million, the companies said. Adrenalin, which creates video games for Sony, Nintendo and Sega consoles, has 30 employees and has not reported a profitable quarter since it went public in 1996. The company lost $2.3 million on sales of $2.8 million in fiscal 1998.

Adrenalin stock rose 91 cents to $3.41 in extremely heavy trading Friday. (Jonathan Gaw)