<PAGE>   1
                                                                Registration No.
                                                                ----------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                                ----------------

                           PLAYNET TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)


             Delaware                                      11-2706304 
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                        Identification No.)

One Maritime Plaza, San Francisco, CA                        94111
Formerly 152 West 57th Street, NY, NY                        10019
(Address of Principal Executive Offices)                   (Zip Code)


                  Compensation Agreement with The Kettle Trust
       Compensation Agreement with Equity Management Partners Corporation
         Compensation Agreement with Langley Downey Entertainment, Inc.
                 Compensation Agreement with Joel F. Brownstein
                  Compensation Agreement with Henry Steeneck
                            (Full title of the plan)


         Mr. Shmuel Cohen, President                     With Copies to:
          PlayNet Technologies, Inc.                 Philip K. Yachmetz, Esq.
             One Maritime Plaza                      7 North Koewing Place
       San Francisco, California 94111        West Orange, New Jersey 07052-4014
              (415) 217-3600                        Telephone: (973) 243-8799
   (Name, address, including zip code, and          Facsimile: (973) 243-9333   
      telephone number, including area
         code, of agent for service)


APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

                             CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
    Title of              Amount         Proposed          Proposed            Amount of       
   Securities              To be          Maximum           Maximum          Registration    
to be Registered        Registered     Offering Price   Aggregate Offering       Fee           
                                         Per Share           Price                 
-----------------------------------------------------------------------------------------
<S>                   <C>              <C>             <C>                  <C>
Common Stock, par     632,666 shares    $ 1.875 (1)      $1,186,248.75 (1)    $359.47 
 value $.001 per
      share 
-----------------------------------------------------------------------------------------
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee on the
basis of, pursuant to Rule 457(c), the average of the high and low prices per
share of the registrant's Common Stock on the National Association of Securities
Dealers Automated Quotation System on July 15, 1997
<PAGE>   2
                                    PART I.

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

                  SUBJECT TO COMPLETION - DATED JULY 18, 1997
PROSPECTUS
                           PLAYNET TECHNOLOGIES, INC.

                         632,666 SHARES OF COMMON STOCK
                               (PAR VALUE $.001)
                         -----------------------------

         The 632,666 shares of Common Stock, $.001 par value, of PlayNet
Technologies, Inc. (the "Company") (collectively, the "Shares") to which this
Prospectus relates will be sold by the Company from time to time, or at any one
time, in negotiated transactions as compensation in lieu of cash pursuant to
Compensation Agreements with various consultants to the Company. The costs of
registering the Shares under the Securities Act, estimated at $359.47, will be
paid by the Company. The Company will not receive any proceeds from the sale of
the Shares, but will benefit from the services rendered under the Compensation
Agreements.

         The Common Stock is traded through the Nasdaq SmallCap Market currently
under the symbol "PLNTC." The last reported sales price for the Common Stock on
the Nasdaq SmallCap Market on July 17, 1997 was $1.5625 per share.

                          ----------------------------

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS
AND RECIPIENTS OF THE SHARES OFFERED HEREBY.

                         -----------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE

                        --------------------------------






                  The date of this Prospectus is July 18, 1997


                                      -1-
<PAGE>   3
         NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS IN CONNECTION WITH THE OFFERING HEREIN CONTAINED, AND IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE OR ISSUANCE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE FACTS HEREIN SET FORTH SINCE THE DATE HEREOF.

                       ---------------------------------

                             AVAILABLE INFORMATION

         The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
and regulations promulgated thereunder, and, in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information may be inspected and copied at prescribed rates at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the following regional
offices of the Commission: 7 World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661.

         The Company has filed with the Commission, 450 Fifth Street, N.W.
Washington, D.C. 20549, a Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act, as amended, with respect to the securities
offered hereby. This Prospectus does not contain all the information set forth
in the Registration Statement and the exhibits thereto. For further information
regarding the Company and the securities offered hereby, reference is made to
the Registration Statement and to the exhibits filed as a part thereof, which
may be inspected at the offices of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 without charge or copied upon request to the Public
Reference Section of the Commission and payment of the prescribed fee. This
Registration Statement has been filed electronically through the Electronic Data
Gathering Analysis and Retrieval system (EDGAR) and is publicly available
through the Commission's web site (http://www.sec.gov). Statements contained in
this Prospectus as to the contents of any contract or other document referred to
herein are not necessarily complete and in each instance reference is made to
the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference.

                      DOCUMENTS INCORPORATED BY REFERENCE

         The Company's (i) Annual Report on Form 10-KSB and 10-KSB/A for the
fiscal year ended October 31, 1996, and (ii) Quarterly Reports on Form 10-Q for
the quarters ended January 31, 1997 and April 30, 1997 are incorporated in and
made a constituent part of this Prospectus by reference. All reports and proxy
statements filed by the Company with the Commission pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date of this Prospectus and
prior to termination of the offering of the Shares of Common Stock to which the
Prospectus relates shall likewise be deemed incorporated herein and made a
constituent part hereof by reference from the respective dates of filing.

         Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified and superceded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document that is also incorporated herein modifies
or replaces such statement. Any statement so modified or superceded shall not be
deemed, except as so modified or superceded, to constitute a part of this
Prospectus.


                                      -2-
<PAGE>   4
         UPON WRITTEN OR ORAL REQUEST, THE COMPANY WILL PROVIDE, WITHOUT CHARGE,
TO EACH PERSON WHO RECEIVES A COPY OF THIS PROSPECTUS, A COPY OF ANY OF THE
INFORMATION THAT IS INCORPORATED BY REFERENCE HEREIN. ANY SUCH REQUEST SHOULD BE
MADE TO THE ATTENTION OF SHMUEL COHEN AT PLAYNET TECHNOLOGIES, INC., ONE
MARITIME PLAZA, SAN FRANCISCO, CALIFORNIA 94111, TELEPHONE NO. (415) 217-3600.

                                  THE COMPANY

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus may contain various "forward-looking statements," within the
meaning of the Securities Act and the Securities Exchange Act of 1934, as
amended, (the "Exchange Act"), that are based on management's beliefs, and
assumptions, as well as information currently available to management. When used
in this document, the words "anticipate," "estimate," "expect," "will" and
similar expressions may identify forward-looking statements. Although the
Company believes that the expectations reflected in any such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to be correct. Any such statements are subject to certain risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results, performance or financial condition may vary materially from
those anticipated, estimated or expected. Among the key factors that may have a
direct bearing on the Company's results, performance or financial condition are
fluctuations in the economy; the degree and nature of competition; demand for
the Company's products; changes in laws and regulations affecting the Company's
business; and the Company's ability to recruit and retain individuals with the
requisite technological expertise to continue to develop new products and
enhancements to existing products, to complete the development of its PlayNet
Music and PlayNet Sports products, to expand into new markets, and to transition
successfully from a development stage company to an operating company and other
matters described in "Risk Factors" and elsewhere in this Prospectus.

OVERVIEW

The Company designs, develops and sells entertainment systems which include
pay-per-play electronic game, entertainment and music juke box terminals
networked over the Internet. The Company's primary product, PlayNet Web, as well
as two products currently under development, PlayNet Music Station and PlayNet
Sports, are all designed to accept both cash and credit cards, have touch
screens, user-friendly interfacing and come pre-loaded with the Company's
proprietary software and other licensed content. The market for the Company's
products includes bars, theme bars and restaurants, hotel and restaurant chains,
coffee cafes, theme parks, studio stores, gyms, airport lounges and new "cyber"
establishments. All three products are intended to run on Microsoft Windows NT
platform networked by IBM Global Services.


The Company's business reflects the growing trend to connect people via computer
networks and, as a result, to create new forms of interactive entertainment in a
social setting. According to the Vending Times 1996 Census, total revenue in the
United States in 1995 for all amusements was approximately $6.3 billion, and
the United States electronic pay-per-play video game business generated
approximately $2.0 billion of that revenue

The Company's terminals are designed to utilize the Internet to enhance the
traditional entertainment and competitive game experience through innovations
such as linking multiple players in remote locations, offering tournament prize
play for sports, strategy and video game enthusiasts, and offering, for both
pay-per-play and purchase, catalogues of music titles from a broad array of
artists and eras. In addition, the terminals are designed to provide convenient
"out-of-home" access to select Internet services to provide a voice activated
chat feature, E-mail, World Wide Web browsing and Web casting, while
simultaneously functioning as points of purchase for entertainment tie-in
merchandise.

The Company's distribution strategy is to maximize both domestic and foreign
penetration of all three networked entertainment terminals. The Company's
experienced sales force is currently calling upon its long-term relationships
with a large roster of domestic and foreign distributors. These distributors are
now purchasing the PlayNet Web terminals directly from the Company and reselling
them to operators in their respective territories for installation in bars and
restaurants in the United States. It is the Company's intention to consummate
direct agreements with hotel and restaurant chains, theme bars and restaurants,
cyber lounges, coffee cafes, theme parks and airport lounges to insure
installations in prime global locations.

PlayNet is currently negotiating to acquire the rights to the libraries of
various music publishers and record labels for use on its PlayNet Music Station.
Concurrently, the Company is negotiating to enter into sponsorship and
advertising programs for its sports games, tournaments and prize contests with
high-profile consumer goods and beverage companies. In addition, the Company
also intends to establish various contractual arrangements, joint ventures and
other mutually advantageous programs with technology providers, equipment
manufacturers, distributors, major hospitality chains, consumer products
companies, music-related companies, content providers and others to develop
more efficient and higher-profile adaptations of its products and services,
which could be customized to meet marketplace requirements.

The Company's primary objective is to install a global network or "web" of its
terminals in choice locations which would, in turn, create a ready-made market
for its software offerings and merchandise. The Company believes that content
providers including those in the Web casting field will be attracted to the
Company's products both by virtue of design and by an allied desire to penetrate
out-of-home computer markets. Moreover, the Company believes that its
entertainment network will present a new and desirable forum for advertisers and
sponsors.

Pursuant to its agreement with IBM Global Services, the Company has established
an "Intranet within the Internet" creating an efficient, secure, and private
circuit to connect its digital terminals throughout the United States and the
world. This network, utilizing IBM's worldwide points of presence, provides for
prompt universal access to all offered games and services as well as for the
remote downloading to all installed terminals of new games and tournaments,
music titles, merchandise catalogues and other content and for the uploading of
financial and customer data. In addition, IBM will provide for the confidential
and expeditious verification of credit card authorizations.

CURRENT OPERATIONS

Through June 1997, the Company shipped 537 PlayNet Web networked entertainment
terminals. The 537 units aggregated revenues of approximately $1.15 million, to
be accounted for in accordance with the Company's revenue recognition policy.
Additionally, the Company currently has purchase orders outstanding for the
shipment of another 3,156 terminals, which is expected to generate sales of
approximately $7.1 million. However, in early April 1997 the Company experienced
system failure based on unexpected software incompatibility, the malfunction
being triggered by the daylight savings time change. To date, this malfunction
has been corrected, all units previously shipped have received the appropriate
upgrades and normal operations have resumed. However, the resolution of this
malfunction and the related upgrading of all the PlayNet Web terminals has
caused a delay in completing the financing arrangements and/or receiving
payments for certain of the shipped terminals. Completion of these sales
transactions is dependent upon the demonstration of the reliability of the
terminals.

On May 20, 1997, the Company entered into a non-binding agreement with
Tournament Associates, Inc. ("TAI") relating to a joint venture that will
operate computerized poker tournaments through retail locations in Pennsylvania.
TAI owns the proprietary rights to electronic video software that supports
competition and tournament poker play. Rulings under Federal and Pennsylvania
law have held that the 


                                      -3-
<PAGE>   5
poker game system is not a gambling device because it awards prizes based on a
player's skill rather than random chance. Accordingly, the game can be offered
throughout Pennsylvania in tournaments in which prizes are awarded to
contestants. The non-binding agreement contemplates that TAI will grant a
non-exclusive, non-transferable sublicense to the joint venture for the use of
its poker game software and related intellectual property, and that PlayNet will
provide the hardware for integrating the licensed software into its PlayNet Web
terminals and will be responsible for the promotion, distribution, placement and
servicing of such terminals. Under the proposed agreement, PlayNet and TAI will
each own one-half of the issued and outstanding capital stock of the joint
venture, make equal capital contributions to fund operations, if required, and
share equally in distributions. It is expected that the joint venture will
continue for an initial term of two years, and thereafter, be renewable
annually. The Company is still in the process of negotiating and completing
final agreements. When and if consummated, PlayNet believes this agreement will
accelerate its opportunities with respect to its business strategy to develop
new markets and for revenues generated from tournaments.

STRATEGY
 
     The Company's primary strategic objective is to establish and rapidly grow
an installed base of its out-of-home, networked entertainment terminals. The
Company believes that its products and system architecture will enable it to
expand the variety of content and services available beyond that which is
available in existing products, as well as to increase the range of venues at
which such networked entertainment terminals can be profitably located. The
Company believes that the breadth of entertainment choices which its products
will deliver, coupled with a highly diverse range of public venues, will extend
the demographics of its potential users beyond that of adolescent males who
currently dominate the out-of-home video game market. The Company's primary
strategies consist of the following key elements:
 
     Enhancement of the Out-of-Home Entertainment Experience -- The Company
intends to offer networked entertainment content with multi-player,
multi-location and tournament prize play which it believes will result in
significantly more appealing entertainment experiences than are possible with
existing stand-alone, out-of-home, pay-per-play machines. Unlike most competing
entertainment systems, which are primarily based on proprietary hardware
platforms, the Company's entertainment terminals will offer touch-screen
activated access to a wide variety of video games including parlor, trivia,
strategy and action games and prize tournament play. Future enhancements of
PlayNet Web, will include access to Internet content, the ability to purchase
general entertainment merchandise, and ancillary features such as E-mail, World
Wide Web browsing and "real-time chat" with other users of the system. Future
enhancements to the PlayNet Music Station will include the ability to purchase
thousands of music titles as well as music-related merchandise.
 
     Hospitality Focus and Penetration Beyond Traditional Venues -- The Company
intends to focus its efforts on the hospitality sector which, according to the
1996 Vending Times Census of the Industry, comprise approximately 60% of the
out-of-home entertainment industry. This sector primarily includes bars,
restaurants and hotels and is distinguished from the remainder of the industry,
which is made up of specialized game arcades and venues such as movie theaters.
The Company believes that the greater variety of entertainment content offered
on its products could significantly expand the number of potential venues in the
hospitality sector and allow it to enter non-traditional venues such as airport
lounges, railroad stations, shopping malls, theme bars and restaurant chains.
The Company intends to accelerate the distribution of its products by forming
strategic alliances with major hospitality companies, both in the United States
and internationally.
 
     Expansion of Potential User Base -- The Company intends to offer a range of
games and tournaments, music titles and other content and features to appeal to
a broader user base than existing arcade offerings which historically target the
adolescent male demographic segment. The Company will initially target
hospitality venues, especially bars, theme bars and restaurant chains for
distribution of its terminals. Networked and prize tournaments and promotions
will be aimed at a broad array of consumers who are interested in social,
interactive entertainment and competitive tournament prize play. The Company
believes that its broad-based strategy will allow it to increase average revenue
per unit and the number of potential venues for its networked machines.
 
     Product Innovation and Improvement -- The Company believes that its
flexible system architecture will allow it to update and continually improve its
game and entertainment offerings on a cost effective basis through remote
downloads from central servers, based on customer feedback and demand. PlayNet
Sports offerings will be changed based on sport seasons. The Company also
intends to support prize tournaments with extensive promotional and sponsorship
campaigns.
 
     Recurring Revenue Streams -- The Company believes that other out-of-home
entertainment product manufacturers only receive revenue from the sale of
machines. The Company believes that its products will result in continuous
revenue from its out-of-home entertainment terminals as it expects that it will
be able to share in on-going terminal revenues. The Company intends to promote,
arrange sponsorship for, and organize national and local game tournaments with
cash and other prizes. The Company believes that tournament play involving other
electronic game products has resulted in an increase in terminal usage and
revenues, especially since such tournaments require higher game fees.
 
     Ancillary Revenue Opportunities -- The Company believes that other
opportunities to generate revenues exist. For example, sponsorship and
advertising revenue could be generated from on-screen advertisements and
tournaments. The Company could also collect fees on merchandise sales made
through its networked entertainment terminals. In addition, the Company may in
the future design a system to re-market data collected from user polls, music
selections and other similar usage to content providers, advertisers and product
and service vendors.
 
CURRENTLY AVAILABLE PRODUCT
 
  PlayNet Web
 
     PlayNet Web is a compact, multi-purpose networked entertainment terminal
designed to sit on a counter-top and accommodate a number of games and
entertainment-related activities. Users will be able to interact with the system
through its easy-to-use touch-screen interface, and select an activity from a
menu of options, including:
 
     -  Games:  Users will be able to select from a menu of ten to twelve games
including parlor, trivia, puzzle and action games. Fresh content will be
remotely downloaded on a regular basis. User scores will be compared to players
in the same venues.
 
     -  Tournaments:  Users may play a number of games competing against other
local, regional or national users of the PlayNet Web for cash and other prizes.
The Company believes that the limited local tournament play offered in existing
out-of-home games has demonstrated significant increases in game utilization and
revenue.
 
     -  Chat:  Users will be able to engage in voice activated chat with other
participants in remote locations through attached handsets. The chat bulletin
boards will be similar to those on America Online with moderators and special
interest groups; however, users will also be able to leave voice file messages
for retrieval at PlayNet Web terminals.
 
     -  Internet:  PlayNet Web will offer standard Internet access and e-mail
for users. PlayNet has designed a touch-screen interface which will prominently
display the most popular web sites which are likely to appeal to a location's
clientele (i.e. ESPN Sportzone in sports bars). Particularly popular sites will
be loaded periodically into the PlayNet Web terminals memory for high speed
retrieval upon use.
 
     -  Other:  Users will be able to order a variety of merchandise using
credit card acceptors and to access and post classified and personal
advertisements.
 
     PlayNet Web terminals will also be networked with any PlayNet Music
Stations in the same venue, allowing users to choose and play music on PlayNet
Music Station through the PlayNet Web terminal. Software will be updated as
necessary from the Company's central server location, allowing the Company to
introduce new games and improve features as necessary to maintain end-user
interest in the terminal.
 
     PlayNet Web is designed to accept $1, $5, $10 and $20 bills and credit
cards. PlayNet Web will have the capability to broadcast promotional messages on
the terminal while it is not being used and is exploring promotional
opportunities and tie-ins with potential sponsors.
 
PRODUCTS UNDER DEVELOPMENT
 
  PlayNet Music Station
 
     PlayNet Music Station is a networked juke box designed to provide real-time
access to thousands of songs via an Internet connection to the Company's central
server database. Through the same Internet connection, customers will be able to
access information about specific artists and to order merchandise and other
related ancillary products. PlayNet Music Station looks like a standard juke
box, but with the addition of two touch screens to facilitate navigation through
multiple song playing and merchandise options. Customers will be able to access
songs by format, e.g. country & western, jazz, rock, or search for and select a
particular song in the music database by title or by artist name.

    
     To date, juke boxes have typically been limited to the approximately 100
CDs physically present in the box. PlayNet Music Station will be linked to a
large database of readily accessible music, so customers will have significantly
greater choice of titles and artists. The Company expects its most popular
selections will be stored locally and will be augmented by a large database of
music stored at remote server sites. The Company will be able to update easily
the database of songs available at each location from remote servers in order to
keep song choices from becoming old or stale. In addition, the Company will be
able to customize song offerings according to location preferences and data
collected in the field.
    
 
   
     PlayNet Music Station does not require any mechanical movements to replace
and play CDs, which the Company expects will reduce breakdowns and maintenance
costs and allow machines to play selections continuously without any pauses
between songs or even start a queued selection before the end of the previous
selection. In this way, the number of songs played during peak hours is
potentially greater, resulting in increased revenue at each location. The
Company also anticipates being able to program individual terminals to play
certain music selections in locales at specified times or during periods that
the juke box is not being used by paying customers. Additionally, PlayNet Music
Station is designed to be able to display the name of the artist and song being
played along with promotional information while the music is playing. In this
way, record companies can promote their new or established artists in
demographically targeted locales (e.g. country music songs in country music
bars.)
    
     PlayNet Music Station is designed to accept $1, $5, $10 and $20 bills and
credit cards.
 
  PlayNet Sports

     PlayNet Sports is an interactive networked game system which will allow two
teams of up to four players each to compete against each other in sports games
such as tennis, football, soccer and baseball. Each unit is the size of a small
billiards table and will accommodate up to eight players, each with a trackball
controller. The Company plans to change the sports games available on PlayNet
Sports in accordance with the relevant sports seasons, offering variety for the
users. The Company plans to eventually introduce other non-sports games,
although sports games will at first dominate PlayNet Sports system's offerings
since one of the Company's initial objectives is to penetrate upscale sports
bars. Games are expected to change about once per quarter, and are expected to
provide not only challenging game play, but also highly charged competition.
Game updates will be downloaded remotely from the Company's central servers.
 
     PlayNet Sports has been specifically designed to support head-to-head and
tournament play. Teams or individuals will be able to compete against a computer
opponent, or against teams in either the same location or other venues through
an Internet connection. PlayNet plans to promote head-to-head play, matching up
opponents and allowing teams in one venue to challenge teams in other venues or
cities. The Company intends to set up weekly tournaments with cash and other
prizes to spark interest and spur competition. Teams will be able to customize
uniform colors, team member names and numbers. It is also intended that team
statistics will be available and displayed on a national basis.

     PlayNet Sports is designed to accept $1, $5, $10 and $20 bills and credit
cards and to broadcast promotional messages on the terminal while it is not
being used. PlayNet intends to attract major companies to sponsor PlayNet Sports
tournaments.

Effective June 30, 1997, the Company relocated its corporate headquarters to its
California facility to maximize the use of its assets and more efficiently
manage the business. At that time the New York City headquarter offices closed.
It is estimated that this relocation could reduce the general and administrative
costs of the organization approximately $1.0 million annually. In connection
with this relocation, the Company recorded a one time charge of $394,477 in the
second quarter for expenditures related to the closing of the New York office.

                                  RISK FACTORS

         The shares offered hereby involve a high degree of risk. Each
prospective investor should carefully consider, among other things, the
following risk factors in addition to the other information presented in this
Prospectus before making an investment decision. The Company undertakes no
obligation to release publicly the result of any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

         History of Net Losses; Accumulated Deficit. The Company has only a
limited operating history upon which an evaluation of the Company and its
prospects can be based. Prior to 1995, the Company was engaged in the developing
and licensing of consumer products. Since 1995 and through February 1997, the
Company had been engaged in the development of networked entertainment products,
which led to its current product line. In February 1997, the Company
commercially launched the PlayNet Web game and entertainment terminal, while
continuing its development activities with respect to its PlayNet Music Station
and PlayNet Sports networked entertainment terminals. As of April 30, 1997 the
Company had received purchase orders for an aggregate of 3,626 PlayNet Web
networked terminals representing anticipated gross sales of approximately $8.2
million. See "Current Operations" above.

         The Company has incurred net losses since inception and, as of April
30, 1997, the Company had an accumulated deficit of $ 38,838,496. As it
continues its entry into the commercial operating stage, the Company's losses
are expected to increase as a result of expenditures required to building
inventory, expanded outsourced manufacturing capacity, increased levels of
spending on marketing and sales and continuing expenditures on product and
content development. In addition, as a new business in an emerging industry, the
Company may encounter unforeseen difficulties, some of which may be beyond the
Company's ability to control, related to marketing, product development,
manufacturing, regulation and proprietary technology. There can be no assurance
that the Company will achieve or sustain profitability in the near future.


                                      -4-
<PAGE>   6
         New Business Focus. The Company's future financial performance will
depend in large part upon the successful development, introduction and customer
acceptance of its networked entertainment products. There can be no assurance
that the Company will be successful in attracting and retaining customers for
such entertainment products. The Company's prospects must be considered in light
of the risks, expenses and difficulties frequently encountered by companies in
their development stage, particularly companies in new and rapidly evolving
markets. To address these risks, the Company must, among other things, respond
to competitive developments, continue to attract, retain and motivate qualified
persons, and continue to upgrade its technologies and commercialize products and
services incorporating such technologies. There can be no assurance that the
Company will be successful in addressing such risks.

         Developing Market; New Entrants; Unproven Acceptance of the Company's
Products and Revenue Model; Uncertain Adoption of Internet as a Medium of
Commerce and Communications. The market for the Company's entertainment
hardware, software and services is rapidly evolving and may see an increasing
number of market entrants. As is typical in the case of a new and rapidly
evolving industry, demand and market acceptance for recently introduced products
and services are subject to a high level of uncertainty. Critical issues
concerning the commercial use of the Internet (including security, reliability,
cost, ease of use and access, and quality of service) remain unresolved and may
impact the growth of Internet use. While the Company believes that its
entertainment units offer significant advantages for networked, location-based,
pay-per-play entertainment using the Internet, there can be no assurance that
entertainment over the Internet will become widespread, or that the Company's
entertainment units will become widely adopted for these purposes.

         Because the market for the Company's products and services is new and
evolving, it is difficult to predict the future growth rate, if any, and size of
this market. There can be no assurance as to the size of the market for the
Company's products and services or that the Company's proposed revenue sharing
model, which is an innovation in the industry, will be accepted by significant
market players. If the market develops more slowly than expected or becomes
saturated with competitors, the Company's business, operating results and
financial condition will be materially adversely affected.

         New Product Development and Technological Change. The Company's
revenues are expected to be derived from the sale of out-of-home entertainment
terminals, the sale and licensing of additional game content for those terminals
and the provision of network services, including tournaments, competitions and
networked game software. Accordingly, broad acceptance of the Company's products
and services by customers is critical to the Company's future success, as is the
Company's ability to design, develop, test and support new products and
enhancements on a timely basis that meet changing customer needs and respond to
technological developments and emerging industry standards. In addition, there
can be no assurance that the Company will not experience difficulties that could
delay or prevent the successful development, introduction and marketing of new
products and enhancements, or that its new products and enhancements will
adequately meet the requirements of the marketplace and achieve market
acceptance. The Company is substantially dependent upon its server and
integrated applications software products that have only recently been
commercialized. There can be no assurance that as the number of units in
operation increases that errors will not be found in the Company's products, or,
if discovered, successfully corrected in a timely manner. If the Company is
unable to develop on a timely basis new entertainment products, enhancements to
existing products or make error corrections, or if such new products or
enhancements do not achieve market acceptance, the Company's business, operating
results and financial condition will be materially adversely affected.

         Evolving Distribution Channels. The Company's distribution strategies
include the traditional out-of-home game distribution channels and the Company
seeks to expand distribution into markets that were previously under-utilizing
out-of-home entertainment units. While these potential customers have
demonstrated significant interest in the Company's PlayNet Web during its
on-site tests and in the first 


                                       -5-
<PAGE>   7
weeks of commercial distribution, there can be no assurance that the Company
will be able to continue to attract or retain distributors or access to other
venues. In addition, the Company's agreements with distributors typically do not
restrict them from distributing competing products. Further, in some cases the
Company intends to grant exclusive distribution rights that are limited by
territory and in duration. Consequently, the Company may be adversely affected
should any distributor fail to adequately penetrate its market segment. The
inability to retain important distributors, or their inability to penetrate
their respective market segments, could materially adversely affect the
Company's business, operating results and financial condition.

         The Company anticipates that it will distribute and broadcast its
networked game software and other electronic content to the operators of its
products over the Internet. Distributing the Company's products over the
Internet may make the Company's software more susceptible than other software to
unauthorized copying and use. If users were to become less sensitive to avoiding
copyright infringement, as a result of changing legal interpretations with
respect to liability for unauthorized use of the Company's software or
otherwise, users were to become less sensitive to avoiding copyright
infringement, the Company's business, operating results and financial condition
would be materially adversely affected.

         Competition. The markets served by the Company are extremely
competitive. The Company expects competition to persist, intensify and increase
in the future. Because there are no substantial barriers to entry, an influx of
new market entrants is expected to continue in response to the growing demand
for entertainment, information and data communication technology products and
services. Many of the Company's current and potential competitors enjoy a
greater market presence and possess substantially greater technical, financial
and marketing resources than the Company. The market for Internet-enabled,
location-based entertainment products is new, and subject to rapid technological
change. The Company expects competition to intensify and increase in the future.
Almost all of the Company's potential competitors have longer operating
histories, greater name recognition in the marketplace, larger installed
customer bases for their preexisting product lines and significantly greater
financial, technical and marketing resources than the Company. Such competition
could materially adversely affect the Company's business, operating results or
financial condition. The Company is aware that other attempts are being
undertaken to develop networked juke boxes and Internet-enabled products for the
location-based entertainment marketplace. The Company believes that it competes
for discretionary spending in the overall entertainment business which includes
(i) home-based entertainment, such as television and home video, pre-recorded
music, books and magazines, and personal computer and console based
entertainment, and (ii) out-of-home entertainment, such as live events,
theatrical exhibitions, video games, billiards, pinball machines and movies.

         Increased competition could result in significant price competition,
which in turn could result in significant reductions in the average selling
price of the Company's products. In addition, competition could result in
increased selling and marketing expenses, which could adversely affect the
Company's profitability. There can be no assurance that the Company will be able
to offset the effects of any such price reductions through an increase in the
sales of its entertainment units, higher revenue from enhanced services, cost
reductions or otherwise. Increased competition, price or otherwise, could result
in erosion of the Company's market share and adversely affect the Company's
operating results. There can be no assurance that the Company will have the
financial resources, technical expertise or marketing and support capabilities
to continue to compete successfully in the out-of-home entertainment market.

         Dependence Upon Suppliers, Manufacturers, Licensors and Third-Party
Financing Sources; Limited Sources of Supply; Dependence Upon Network
Infrastructure. The Company relies on other companies to supply certain key
components of its network infrastructure, including telecommunications services
and networking equipment, which, in the quantities and quality demanded by the
Company, are available only from sole or limited sources. The Company is also
dependent upon local exchange carriers ("LECs") to 


                                      -6-
<PAGE>   8
provide telecommunications services to, and Internet service providers ("ISPs")
to provide Internet connection for, the Company and its customers. In that
regard the Company has entered into a comprehensive Internet server delivery and
support services contract with IBM Global Services, one of the largest Internet
service providers. Any failures in such services or the receipt of timely
correction to such failures would have a material adverse effect on the
Company's business, financial condition and results of operations.

         The Company is also dependent on its suppliers' ability to provide
necessary products and components that comply with various Internet and
telecommunications standards and that operate with products and components from
other vendors. Any failure of the Company's sole or limited source suppliers to
provide products or components that comply with Internet standards or that are
compatible with other products or components used by the Company in its network
infrastructure could have a material adverse effect on the Company's business,
financial condition and results of operations.

         The Company currently has a one year annually renewable agreement with
an unaffiliated vendor, Mac Cal Co., Inc., to manufacture PlayNet Web countertop
units, with production having commenced in January, 1997. The Company also
intends to outsource the manufacturing of a significant portion of its other
hardware requirements. Any failure or delay by manufacturers to deliver such
hardware, or any defect in, or non-conforming production of, such hardware would
disrupt the Company's operations.

         Management of Growth; Dependence on Key Personnel. The Company
continues to experience rapid growth that could strain the Company's managerial
and other resources. From July 31, 1995 through June 30, 1997, the number of the
Company's full-time employees increased from 22 to 80. Further selected
additions to the employee base to meet anticipated management, sales and
marketing needs are anticipated during the balance of 1997. Many of the key
employees have worked together only for a short time. The Company's ability to
manage its growth effectively will require it to continue to improve its
operational, financial and other internal systems, and to train, motivate,
manage and retain its current employees and attract equivalent new employees.
Competition for highly qualified personnel is intense. If the Company's
management is unable to manage growth effectively and employees are unable to
achieve anticipated performance levels, the Company's results of operations
could be adversely affected. Additionally, the Company depends on the services
of certain of its key employees, including Shmuel Cohen and Nolan K. Bushnell
and the loss of any such services could have a material adverse effect on the
Company.

         Risk of System Failure; Security Risks. The Company's operations are
dependent upon its ability, and the ability of its suppliers, to protect its
network infrastructure against damage from fire, earthquakes, power loss,
telecommunications failures and similar events. Despite precautions taken by the
Company and the industry in general, the occurrence of a natural disaster or
other unanticipated problems at the Company's network operations center or nodes
in the future could cause interruptions in the services furnished by the
Company. In addition, failure of the Company's telecommunications and Internet
service providers to supply the data communications capacity required by the
Company as a result of a natural disaster, operational disruption, Internet
capacity overload or for any other reason could cause interruptions in the
services provided by the Company. Any damage or failure that causes
interruptions in the Company's operations could have a material adverse effect
on the Company's business, financial condition and results of operations.

         Despite the implementation of security measures, the core of the
Company's network infrastructure is vulnerable to computer viruses and
disruptive problems. Internet access providers have in the past experienced, and
may in the future experience, interruptions in service as a result of the
accidental or intentional actions of Internet users, current and former
employees or others. Unauthorized use could also potentially jeopardize the
security of confidential information stored in the Company's computer systems,
which may result in liability of the Company to its customers. Although the
Company intends to continue 


                                       -7-
<PAGE>   9
to implement industry-standard security measures, such measures have been
circumvented in the past, and there can be no assurance that measures
implemented by the Company will not be circumvented in the future. Eliminating
computer viruses and alleviating other security problems may require
interruptions, delays or cessation of service to the Company's customers which
could have a material adverse effect on the Company's business, financial
condition and results of operations.

         The Company's success will depend upon the capacity, reliability and
security of its network infrastructure. The Company must continue to expand and
adapt its network infrastructure as the number of users and the amount of
information they wish to transfer increases, and to meet changing customer
requirements. The expansion and adaptation of the Company's network
infrastructure will require substantial financial, operational and management
resources. There can be no assurance that the Company will be able to expand or
adapt its network infrastructure to meet additional demand or its customers'
changing requirements on a timely basis, at a commercially reasonable cost, or
at all. Any failure of the Company to expand its network infrastructure on a
timely basis or adapt it either to changing customer requirements or to evolving
industry standards could have a material adverse effect on the Company's
business, financial condition and results of operations. The Company is aware
that significant delays exist for the installation of integrated services
digital network ("ISDN") lines in certain parts of the United States and that
such service is not available in all areas.

         A significant barrier to the widespread acceptance of Internet commerce
is uncertainty over the secure exchange of value over public networks. The
Company relies on encryption and authentication technology necessary to provide
the security to effectuate the secure exchange of value, including credit card
transactions. There can be no assurance that advances in computer capabilities,
new discoveries in the field of cryptography or other events or developments
will not result in a compromise or breach of the algorithms used by the Company
to protect customer transaction data. If any such compromise of the Company's
security were to occur, it could have a material adverse effect on the Company's
business, financial condition and results of operations.

         Governmental Regulation. In the United States and many other countries,
games of chance must be expressly authorized by law. Once authorized, such games
are subject to extensive and evolving domestic and foreign governmental
regulation, including federal, state and local regulation. There can be no
assurance that the operation of all of the Company's games, including prize
tournament games, will be approved by all of the jurisdictions in which the
Company intends to market and operate its game and prize tournament game
products or that those jurisdictions in which these games and prize tournament
game products are currently permitted will continue to permit such activities.
In addition, future government regulation could be burdensome to the Company,
its personnel and its stockholders. Moreover, material increases in taxes or
fees on the games' operations could adversely affect the Company.

         The Company is not currently subject to direct regulation by the
Federal Communications Commission or any other agency, other than regulations
applicable to businesses generally. Changes in the regulatory environment
relating to the Internet access industry, including regulatory changes which
directly or indirectly affect telecommunication costs or the likelihood or scope
of competition, could have a material adverse effect on the Company's business,
financial condition and results of operations. Due to the increase in Internet
use and publicity, it is possible that laws and regulations may be adopted with
respect to the Internet, including privacy, pricing and characteristics of
products or services. The Company cannot predict the impact, if any, that future
laws and regulations or legal or regulatory changes may have on its business.

         The law relating to the liability of on-line services companies and
ISPs for information carried on or disseminated through their systems is
currently unsettled. Several private lawsuits seeking to impose such liability
upon on-line services companies and ISPs are currently pending. In addition,
legislation has been proposed which would impose liability for or prohibit the
transmission on the Internet of certain types of 


                                      -8-
<PAGE>   10
information and content. The imposition upon the Company or ISPs of potential
liability for information carried on or disseminated through their systems could
require the Company to implement measures to reduce its exposure to such
liability, which may require the expenditure of substantial resources, or to
discontinue certain product features. The increased attention focused upon
liability issues as a result of these lawsuits and legislative proposals could
impact the growth of Internet use. While the Company maintains certain
insurance, such insurance may not be adequate to compensate the Company in the
event the Company becomes liable for information carried on or disseminated
through its systems. Any costs not covered by insurance incurred as a result of
such liability or asserted liability could have a material adverse effect on the
Company's business, financial condition and results of operations.

         Fluctuations in Quarterly Results. As a result of the Company's limited
operating history, the Company does not have historical financial data for a
significant number of periods on which to base planned operating expenses. The
Company's expense levels are based in part on its expectations as to future
revenues and are expected to increase. Quarterly sales and operating results
generally depend on the volume and timing of, and ability to fulfill, orders
received within the quarter, which are difficult to forecast. The Company may be
unable to adjust spending in a timely manner to compensate for any unexpected
revenues shortfall. Accordingly, any significant shortfall of demand for the
Company's products and services in relation to the Company's expectations would
have an immediate adverse impact on the Company's business, operating results
and financial condition. In addition, with the recent launch of its PlayNet Web
terminal the Company plans to increase its operating expenses to fund greater
levels of sales and marketing activities and operations, develop new
distribution channels, broaden its customer support capabilities and continue
its research and development activities with respect to customized versions of
the PlayNet Web and its PlayNet Music and PlayNet Sports entertainment and
electronic game systems. To the extent that such expenses precede, or are not
subsequently followed by, increased revenues, the Company's business, operating
results and financial condition will be materially adversely affected.

         The Company expects to experience significant fluctuations in future
quarterly operating results that may be caused by many factors, including demand
for the Company's products, expenses related to the introduction or enhancement
of products by the Company and its competitors, market acceptance of new
products, mix of distribution channels through which products are sold, mix of
products and services sold, mix of international and North American revenues,
and general economic conditions. As a result, the Company believes that
period-to-period comparisons of its results of operations are not necessarily
meaningful and should not be relied upon as any indication of future
performance. Due to all of the foregoing factors, it is likely that in some
future quarter the Company's operating results will be below the expectations of
public market analysts and investors. In such event, the price of the Company's
Common Stock would likely be materially adversely affected.

         Uncertainty of Additional Financing. The Company anticipates, based on
currently proposed plans and assumptions relating to its operations (including
the costs associated with, and the timetable for, development of the networked
entertainment products), that the projected cash flow from operations and the
proceeds of various private placement financings and a potential secondary
public offering, will be sufficient to satisfy its contemplated cash
requirements for at least twelve months following the consummation of this
offering. In the event that the Company's plans change, its assumptions change
or prove to be inaccurate or if the proceeds of the private placements or
expected cash flow prove to be insufficient, the Company may be required to seek
additional financing. There can be no assurance that the proceeds of the private
placements will be sufficient to permit the Company to complete the development
and launch of its networked entertainment products and to achieve the expected
growth of the Company. The Company may need to raise additional funds through
public or private debt or equity financings in order to take advantage of
unanticipated opportunities, including more rapid international expansion or
acquisitions of complementary businesses or technologies, or to develop new
products or otherwise respond to unanticipated competitive pressures. If
additional funds are raised through the issuance of equity

                                      -9-

<PAGE>   11
securities, the percentage ownership of the current stockholders of the Company
may be reduced and such equity securities may have rights, preferences or
privileges senior to those of the holders of the Company's Common Stock. There
can be no assurance that additional financing will be available on terms
favorable to the Company, or at all. If adequate funds are not available or are
not available on acceptable terms, the Company may not be able to take advantage
of unanticipated opportunities, develop new products or otherwise respond to
unanticipated competitive pressures. Such inability could have a material
adverse effect on the Company's business, financial condition and results of
operations.

         Possible Future Payments to Third Parties; Uncertain Protection of
Intellectual Property. The Company's success and ability to compete is dependent
in part upon its proprietary technology. While the Company relies on patent,
trademark, trade secret and copyright law to protect its technology, the Company
believes that factors such as the technological and creative skills of its
personnel, new product developments, frequent product enhancements, name
recognition and reliable product maintenance are more essential to establishing
and maintaining a technology leadership position. The Company presently has one
pending patent applications relating to the encryption technology used in its
out-of-home entertainment business. However, there can be no assurance that
others will not develop technologies that are similar or superior to the
Company's technology. The source code for the Company's proprietary software is
protected both as a trade secret and as a copyrighted work. The Company
generally enters into confidentiality or license agreements with its employees,
consultants and vendors, and generally controls access to and distribution of
its software, documentation and other proprietary information. Despite these
precautions, it may be possible for a third party to copy or otherwise obtain
and use the Company's proprietary or licensed content, products or technology
without authorization, or to develop similar technology independently. In
addition, effective copyright and trade secret protection may be unavailable or
limited in certain foreign countries, and the global nature of the Internet
makes it virtually impossible to control the ultimate destination of the
Company's products. Despite the Company's efforts to protect its proprietary
rights, unauthorized parties may attempt to copy aspects of the Company's
products or to obtain and use information that the Company regards as
proprietary. Policing unauthorized use of the Company's products is difficult.
There can be no assurance that the steps taken by the Company will prevent
misappropriation of its technology or that such agreements will be enforceable.
In addition, litigation may be necessary in the future to enforce the Company's
intellectual property rights, to protect the Company's trade secrets, to
determine the validity and scope of the proprietary rights of others, or to
defend against claims of infringement or invalidity. Such litigation could
result in substantial costs and diversion of resources and could have a material
adverse effect on the Company's business, financial condition or results of
operations.

         The Company also relies on certain technology which it licenses from
third parties, including software which is integrated with internally developed
software and used in the Company's products to perform key functions. There can
be no assurance that these third party technology licenses will continue to be
available to the Company on commercially reasonable terms. The loss of or
inability to maintain any of these technology licenses could result in delays or
reductions in product shipments which could materially adversely affect the
Company's business, financial condition or results of operations.

         Risks Associated with International Expansion. A long-term component of
the Company's strategy is its planned expansion into international markets. To
date, the Company has no experience in developing localized versions of its
products and marketing and distributing its products internationally. There can
be no assurance that the Company or the entities with which it partners in these
international markets will be able to successfully market, sell and deliver the
Company products in these markets. In addition to the uncertainty as to the
Company's ability to expand its international presence, there are certain risks
inherent in doing business on an international level which could adversely
impact the success of the Company's international operations. These risks
include technical difficulty in localizing the products for the specific
territories, changes in regulatory requirements, export restrictions, export
controls relating to encryption technology, tariffs and other trade barriers,
difficulties in staffing and managing foreign operations, longer


                                      -10-
<PAGE>   12
payment cycles, problems in collecting accounts receivable, political
instability, fluctuations in currency exchange rates, seasonal reductions in
business activity during the summer months in Europe and certain other parts of
the world and potentially adverse tax consequences. In some cases, the
prohibitive costs of telephones, telephone lines, high speed links and Internet
access may exclude whole countries. There can be no assurance that one or more
of such factors will not have a material adverse effect on the Company's future
international operations and, consequently, on the Company's business, operating
results and financial condition.

         Concentration of Stock Ownership. The present directors, executive
officers and their respective affiliates are the beneficial owners of
approximately 28.30% of the outstanding Common stock and upon completion of this
offering, the present directors, executive officers and their respective
affiliates will beneficially own approximately 26.65% of the outstanding Common
Stock. As a result, these stockholders are and will be able to exercise
significant influence over all matters requiring stockholder approval, including
the election of directors and approval of significant corporate transactions.
Such concentration of ownership may also have the effect of delaying or
preventing a change in control of the Company.

         Delisting from Nasdaq SmallCap Market. On April 4, 1997, the Company
received a notice from Nasdaq asserting a deficiency in its compliance with the
maintenance standards for continued inclusion on the Nasdaq SmallCap Market. In
response to this notice, the Company submitted a proposal for achieving
compliance with such standards and requested a delay of any action to delist the
Common Stock from the Nasdaq SmallCap Market. However, Nasdaq declined the
Company's request, and gave notice to the Company on May 15, 1997 that the
Common Stock would be delisted effective with the close of business on May 23,
1997, subject, however, to the Company's appeal of the Nasdaq decision.
Accordingly, the Company applied for an oral hearing to review the delisting
decision. A hearing was held on June 27, 1997. On July 11, 1997, the Listing
Qualifications Hearing Panel (the "Panel") notified the Company that in light of
its opinion that the Company had presented a plan of compliance which has a high
likelihood of success, that the Panel had determined to grant the Company a
limited time exception to the capital and surplus requirement as set forth in
NASD Marketplace Rule 4310(c)(03) on the condition that on or before July 31,
1997 the Company must make a public filing with the SEC and Nasdaq which
contains a June 30, 1997 balance sheet with pro forma adjustments for any
significant transactions on or before the filing date and that such pro forma
balance sheet must evidence minimum capital and surplus of $15,000,000. In the
event the Company fails to meet any terms of the exception, its Common Stock
will be immediately delisted from the Nasdaq SmallCap Market. In addition, since
the Company is operating under the exception granted by the panel, its continued
listing on the Nasdaq SmallCap Market is conditional, and as such, effective
July 16, 1997, the trading symbol of the Company's Common Stock has been
modified to add a fifth character "C" and has changed from "PLNT" to "PLNTC".
The Company's trading symbol will contain this fifth character until the Company
has demonstrated compliance with the terms of the exception. The Company
believes that it can meet the requirements of the exception granted by the
Panel. The failure to meet the requirements of the exception granted by the
Panel will adversely affect the market price of the Company's Common Stock.

         Possible Volatility of Stock Price. To date there has been a limited
public market for the Company's Common Stock, and there can be no assurance that
an active public market for the Common Stock will develop or be sustained after
the offering. The market price of the Company's Common Stock is likely to be
highly volatile and could be subject to wide fluctuations in response to
quarterly variations in operating results, delays in new feature or product
introduction, announcements of technological innovations or new products by the
Company or its competitors, changes in the regulatory environment, changes in
financial estimates by securities analysts, or other events or factors. In
addition, the stock market has experienced significant price and volume
fluctuations that have particularly affected the market prices of equity
securities of many technology and entertainment companies and that often have
been unrelated to the operating performance of such companies. In the past,
following periods of volatility in the market price of a


                                      -11-
<PAGE>   13
company's securities, class action litigation has often been instituted against
such a company. Such litigation could result in substantial costs and a
diversion of management's attention and resources, which would have a material
adverse effect on the Company's business, operating results and financial
condition. Any broad market fluctuations may adversely affect the market price
of the Company's Common Stock.

         Shares Eligible for Future Sale. Sales of a substantial number of
shares of Common Stock in the public market following this offering could
adversely affect the market price for the Common Stock and could impair the
Company's future ability to raise additional capital through a private or public
offering of its equity securities. Under recently adopted amendments to Rule 144
of the Securities Act of 1933 ("Rule 144"), 9,889,290 shares of the Company's
Common Stock, which were previously "restricted" securities under Rule 144, have
surpassed the new two year holding period and are eligible for unlimited resales
and an additional 2,007,430 shares of the Company's Common Stock will surpass
such two year period within 45 days after the date of this Prospectus. In
addition, as of the date of this Prospectus, an additional 784,106 shares of the
Company's Common Stock have surpassed the new one year holding period and are
now eligible for resale subject only to the fulfillment of certain restrictions
on the volume, method and manner of resale specified in Rule 144. Sales of such
shares could have a material adverse effect on the market price for the
Company's Common Stock.

         Immediate, Substantial Dilution. Purchasers of shares of Common Stock
in this offering will incur immediate and substantial dilution in net tangible
book value per share. Additional dilution may occur upon exercise of outstanding
stock options or warrants or the conversion of certain of the Company's
convertible promissory notes, or in connection with possible future financings
to meet the Company's future capital requirements.

         No Dividends. Pursuant to a settlement with certain stockholders of the
Astro-Stream corporation related to the Merger, a special dividend of $0.0932
per share was paid on or about August 6, 1996 to stockholders on the record date
of May 5, 1995. Except for this special dividend, the Company has never paid any
dividends on its Common Stock, nor does it anticipate paying dividends on its
Common Stock in the foreseeable future. The Company plans to retain any earnings
to finance the development and expansion of its business.

         Anti-Takeover Effects of Preferred Stock. The Company's Restated
Certificate of Incorporation authorizes the issuance of "blank check" Preferred
Stock with such designations, rights and preferences as may be determined from
time to time by the Board of Directors. Accordingly, the Board is empowered,
without stockholder approval, to issue Preferred Stock with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
relative voting power or other rights of the holders of the Company's Common
Stock. In the event of issuance, the Preferred Stock could be used, under
certain circumstances, as a method of discouraging, delaying or preventing a
change in control of the Company. Although the Company has no present intention
to issue any shares of Preferred Stock, there can be no assurance that the
Company will not do so in the future. If the Company issues shares of Preferred
Stock, the issuance may have a dilutive effect upon the holders of the Company's
Common Stock, including the purchasers of the shares being offered hereby.


                                USE OF PROCEEDS

         The Company will not receive any proceeds from the sale or distribution
of the Shares being offered hereby, but will benefit from the services rendered
under the Compensation Agreements.


                                      -12-
<PAGE>   14
                              PLAN OF DISTRIBUTION

As soon as reasonably practicable, after the filing of this Registration
Statement, the Shares to which this Prospectus relates will be issued by the
Company from time to time, or at any one time, as compensation pursuant to
negotiated Compensation Agreements the following consultants to the Company and
in the following amounts.


              CONSULTANT                              AMOUNT OF SHARES

     The Kettle Trust                                       50,000
     Equity Management Partners, Inc.                      300,000
     Langley Downey Entertainment, Inc.                     14,666
     Henry Steeneck                                         18,000
     Joel F. Brownstein                                    250,000
                                                           -------
                                                           632,666

All Shares are issued in lieu of cash compensation for services rendered and to
be rendered and upon issuance, will be, duly authorized, validly issued, fully
paid and nonassessable. All Shares are not subject to the provisions of the
Employee Retirement Income Security Act of 1974 and shall not have any
restrictions on resale. See also Item 4, Description of Securities.


                                    PART II.

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.  INCORPORATION OF DOCUMENTS BY REFERENCE.

         The following documents heretofore filed by the Registrant with the
Securities and Exchange Commission (File No. 0-25296) pursuant to Section 13(a)
of the Securities Exchange Act of 1934 (the "1934 Act") are incorporated herein
by reference:

         (a)  The Registrant's Annual Report on Form 10-KSB and 10-KSB/A for the
fiscal year ended October 31, 1996;

         (b)  The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended January 31, 1997 and April 30, 1997; and

         (c)  See Item 4, Description of Securities below.

         All documents filed subsequent to the date of this Registration
Statement pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act and
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of the filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement.


                                      -13-
<PAGE>   15
ITEM 4. DESCRIPTION OF SECURITIES.

         All of the 632,666 shares of Common Stock, par value $.001 per share
(the "Common Stock"), offered hereby are being offered by PlayNet Technologies,
Inc. (the "Registrant"). The Common Stock is currently included on the Nasdaq
SmallCap Market under the symbol "PLNTC." The last reported sales price for the
Common Stock on the Nasdaq SmallCap Market on July 17, 1997 was $1.5625 per
share.

         The Registrant is authorized to issue 40,000,000 shares of Common
Stock, par value $.001 per share, and 1,000,000 shares of preferred stock, par
value $.001 per share. As of the date hereof, the Registrant had 14,980,319
shares of Common Stock outstanding held of record by approximately 800 holders.
No shares of Preferred Stock are currently outstanding.

         Holders of Common Stock are entitled to one vote for each share held of
record on each matter submitted to a vote of stockholders. There is no
cumulative voting for election of directors. Subject to the prior rights of any
series of Preferred Stock which may from time to time be outstanding, if any,
holders of Common Stock are entitled to receive dividends when, as, and if
declared by the Board of Directors out of funds legally available therefor and,
upon the liquidation, dissolution or winding up of the Registrant, are entitled
to share ratably in all assets remaining after payment of liabilities and
payment of accrued dividends and liquidation preferences on the Preferred Stock,
if any. Holders of Common Stock have no preemptive rights and have no rights to
convert their Common Stock into any other securities. All outstanding shares of
Common Stock are, and the shares of Common Stock offered hereby upon issuance,
will be, duly authorized, validly issued, fully paid and nonassessable.

         The Registrant's Restated Certificate of Incorporation authorizes the
issuance of "blank check" Preferred Stock with such designations, rights and
preferences as may be determined from time to time by the Board of Directors.
Accordingly, the Board is empowered, without stockholder approval, to issue
Preferred Stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the relative voting power or other rights of the
holders of the Registrant's Common Stock. In the event of issuance, the
Preferred Stock could be used, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of the Registrant.
Although the Registrant has no present intention to issue any shares of
Preferred Stock, there can be no assurance that the Registrant will not do so in
the future. If the Registrant issues shares of Preferred Stock, the issuance may
have a dilutive effect upon the holders of the Registrant's Common Stock,
including the purchasers of the shares being offered hereby.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.

         Philip K. Yachmetz, Esq. has passed upon the legality under the law of
Delaware, the state in which the Company is incorporated, of the Common Stock of
the Company being offered hereby. Mr. Yachmetz is the holder of 1,000 shares of
the Common Stock of the Company.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Section 145 of the Delaware General Corporation Law authorizes a
corporation, under certain circumstances, to indemnify its directors and
officers (including reimbursement for expenses incurred). The registrant has
provided for indemnification to the extent permitted by the provisions of the
Delaware statute in its charter and by-laws. The registrant also maintains
directors and officers' liability insurance (subject to certain exclusions and
limitations) against certain liabilities, including certain liabilities under
the Securities Act of 1933. See Item 9, "Undertakings."

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.


                                      -14-
<PAGE>   16
         Not Applicable.

ITEM 8.  EXHIBITS.

Exhibit
Number   Description

4.01     Restated and Amended Certificate of Incorporation **
4.02     Certificate of Amendment to the Restated and Amended Certificate of
         Incorporation***
4.06     By-Laws****
5.01     Opinion of Philip K. Yachmetz, Esq., counsel to the registrant, as to
         the legality of the Common Stock being offered.*
23.01    Consent of Coopers & Lybrand., LLP.*
23.02    Consent of Philip K. Yachmetz, Esq. (contained in Exhibit 5.01).
24.01    Powers of Attorney of certain officers and directors of the Registrant
         (included in signature page).
99.1     Compensation Agreement with The Kettle Trust*
99.2     Compensation Agreement with Equity Management Partners Corporation*
99.3     Compensation Agreement with Langley Downey Entertainment, Inc.*
99.4     Compensation Agreement with Henry Steeneck*
99.5     Compensation Agreement with Joel F. Brownstein*

*    Filed herewith.
**   Incorporated by reference to Exhibit 3.1 to Registrant's Annual Report on
     Form 10-KSB for the year ended October 31, 1995, filed on January 29, 1996.
***  Incorporated by reference to Exhibit 3.1A to Registrant's Annual Report on
     Form 10-KSB for the year ended October 31, 1996, filed on February 13,
     1997.
**** Incorporated by reference to Exhibit 3.2 to Registrant's Annual Report on
     Form 10-KSB for the year ended October 31, 1995, filed on January 29, 1996


ITEM 9.  UNDERTAKINGS.

         The undersigned registrant hereby undertakes:

         (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

                  (i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;

                  (ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;


                                      -15-
<PAGE>   17
                  (iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.

         (2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

         The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.


                                      -16-

<PAGE>   18
                                   SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco, State of California, on the 18th day
of July, 1997.

                                    PLAYNET TECHNOLOGIES, INC.
                                    (Registrant)


                                    By: /s/ Shmuel Cohen
                                       ----------------------
                                       Shmuel Cohen
                                       President and Chief Executive Officer


                                    By: /s/ Andrew Nimitz
                                       ----------------------
                                       Andrew Nimitz
                                       Controller

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned hereby constitutes
and appoints Shmuel Cohen his true and lawful attorneys-in-fact and agents, for
him and in his name, place and stead, in any and all capacities, with full power
to act alone, to sign any and all amendments to this Registration Statement, and
to file each such amendment to this Registration Statement with all exhibits
thereto, and any and all documents in connection therewith, with the Securities
and Exchange Commission, hereby granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform any and all acts
and things required and necessary to be done, as fully and to all intents and
purposes as, he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, may lawfully do or cause
to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.

         Signature                  Title                       Date

/s/ Joseph Ettinger                Director                 July 17, 1997

Joseph Ettinger

/s/ Yael Cohen                     Director                 July 17, 1997

Yael Cohen

/s/ Barry Frank                    Director                 July 17, 1997

Barry Frank

/s/ Mark Lewis                     Director                 July 17, 1997

Mark Lewis


                                      -17-
[{"type": "S-8", "sequence": "1", "description": "PLAYNET TECHNOLOGIES, INC.", "secsgml_size_bytes": 87210}]
{"company-data": {"conformed-name": "PLAYNET TECHNOLOGIES INC", "cik": "0000782145", "assigned-sic": "7372", "irs-number": "112706304", "state-of-incorporation": "DE", "fiscal-year-end": "1031"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-31597", "film-number": "97642632"}, "business-address": {"street1": "152 W 57TH ST", "street2": "29TH FL", "city": "NEW YORK", "state": "NY", "zip": "10019", "phone": "2125862400"}, "mail-address": {"street1": "152 WEST 57TH STREET", "city": "NEW YORK", "state": "NY", "zip": "10019"}, "former-company": [{"former-conformed-name": "ARISTO INTERNATIONAL CORP", "date-changed": "19950508"}, {"former-conformed-name": "ASTRO STREAM CORP", "date-changed": "19920703"}]}
1
                                                                Registration No.
                                                                ----------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                                ----------------

                           PLAYNET TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

             Delaware                                      11-2706304 
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                        Identification No.)

One Maritime Plaza, San Francisco, CA                        94111
Formerly 152 West 57th Street, NY, NY                        10019
(Address of Principal Executive Offices)                   (Zip Code)

                  Compensation Agreement with The Kettle Trust
       Compensation Agreement with Equity Management Partners Corporation
         Compensation Agreement with Langley Downey Entertainment, Inc.
                 Compensation Agreement with Joel F. Brownstein
                  Compensation Agreement with Henry Steeneck
                            (Full title of the plan)

         Mr. Shmuel Cohen, President                     With Copies to:
          PlayNet Technologies, Inc.                 Philip K. Yachmetz, Esq.
             One Maritime Plaza                      7 North Koewing Place
       San Francisco, California 94111        West Orange, New Jersey 07052-4014
              (415) 217-3600                        Telephone: (973) 243-8799
   (Name, address, including zip code, and          Facsimile: (973) 243-9333   
      telephone number, including area
         code, of agent for service)

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

                             CALCULATION OF REGISTRATION FEE
-----------------------------------------------------------------------------------------
    Title of              Amount         Proposed          Proposed            Amount of       
   Securities              To be          Maximum           Maximum          Registration    
to be Registered        Registered     Offering Price   Aggregate Offering       Fee           
                                         Per Share           Price                 
-----------------------------------------------------------------------------------------
Common Stock, par     632,666 shares    $ 1.875 (1)      $1,186,248.75 (1)    $359.47 
 value $.001 per
      share 
-----------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee on the
basis of, pursuant to Rule 457(c), the average of the high and low prices per
share of the registrant's Common Stock on the National Association of Securities
Dealers Automated Quotation System on July 15, 1997
2
                                    PART I.

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

                  SUBJECT TO COMPLETION - DATED JULY 18, 1997
PROSPECTUS
                           PLAYNET TECHNOLOGIES, INC.

                         632,666 SHARES OF COMMON STOCK
                               (PAR VALUE $.001)
                         -----------------------------

         The 632,666 shares of Common Stock, $.001 par value, of PlayNet
Technologies, Inc. (the "Company") (collectively, the "Shares") to which this
Prospectus relates will be sold by the Company from time to time, or at any one
time, in negotiated transactions as compensation in lieu of cash pursuant to
Compensation Agreements with various consultants to the Company. The costs of
registering the Shares under the Securities Act, estimated at $359.47, will be
paid by the Company. The Company will not receive any proceeds from the sale of
the Shares, but will benefit from the services rendered under the Compensation
Agreements.

         The Common Stock is traded through the Nasdaq SmallCap Market currently
under the symbol "PLNTC." The last reported sales price for the Common Stock on
the Nasdaq SmallCap Market on July 17, 1997 was $1.5625 per share.

                          ----------------------------

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS
AND RECIPIENTS OF THE SHARES OFFERED HEREBY.

                         -----------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE

                        --------------------------------

                  The date of this Prospectus is July 18, 1997

                                      -1-
3
         NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS IN CONNECTION WITH THE OFFERING HEREIN CONTAINED, AND IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE OR ISSUANCE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE FACTS HEREIN SET FORTH SINCE THE DATE HEREOF.

                       ---------------------------------

                             AVAILABLE INFORMATION

         The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
and regulations promulgated thereunder, and, in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information may be inspected and copied at prescribed rates at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the following regional
offices of the Commission: 7 World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661.

         The Company has filed with the Commission, 450 Fifth Street, N.W.
Washington, D.C. 20549, a Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act, as amended, with respect to the securities
offered hereby. This Prospectus does not contain all the information set forth
in the Registration Statement and the exhibits thereto. For further information
regarding the Company and the securities offered hereby, reference is made to
the Registration Statement and to the exhibits filed as a part thereof, which
may be inspected at the offices of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 without charge or copied upon request to the Public
Reference Section of the Commission and payment of the prescribed fee. This
Registration Statement has been filed electronically through the Electronic Data
Gathering Analysis and Retrieval system (EDGAR) and is publicly available
through the Commission's web site (http://www.sec.gov). Statements contained in
this Prospectus as to the contents of any contract or other document referred to
herein are not necessarily complete and in each instance reference is made to
the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference.

                      DOCUMENTS INCORPORATED BY REFERENCE

         The Company's (i) Annual Report on Form 10-KSB and 10-KSB/A for the
fiscal year ended October 31, 1996, and (ii) Quarterly Reports on Form 10-Q for
the quarters ended January 31, 1997 and April 30, 1997 are incorporated in and
made a constituent part of this Prospectus by reference. All reports and proxy
statements filed by the Company with the Commission pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date of this Prospectus and
prior to termination of the offering of the Shares of Common Stock to which the
Prospectus relates shall likewise be deemed incorporated herein and made a
constituent part hereof by reference from the respective dates of filing.

         Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified and superceded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document that is also incorporated herein modifies
or replaces such statement. Any statement so modified or superceded shall not be
deemed, except as so modified or superceded, to constitute a part of this
Prospectus.

                                      -2-
4
         UPON WRITTEN OR ORAL REQUEST, THE COMPANY WILL PROVIDE, WITHOUT CHARGE,
TO EACH PERSON WHO RECEIVES A COPY OF THIS PROSPECTUS, A COPY OF ANY OF THE
INFORMATION THAT IS INCORPORATED BY REFERENCE HEREIN. ANY SUCH REQUEST SHOULD BE
MADE TO THE ATTENTION OF SHMUEL COHEN AT PLAYNET TECHNOLOGIES, INC., ONE
MARITIME PLAZA, SAN FRANCISCO, CALIFORNIA 94111, TELEPHONE NO. (415) 217-3600.

                                  THE COMPANY

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus may contain various "forward-looking statements," within the
meaning of the Securities Act and the Securities Exchange Act of 1934, as
amended, (the "Exchange Act"), that are based on management's beliefs, and
assumptions, as well as information currently available to management. When used
in this document, the words "anticipate," "estimate," "expect," "will" and
similar expressions may identify forward-looking statements. Although the
Company believes that the expectations reflected in any such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to be correct. Any such statements are subject to certain risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results, performance or financial condition may vary materially from
those anticipated, estimated or expected. Among the key factors that may have a
direct bearing on the Company's results, performance or financial condition are
fluctuations in the economy; the degree and nature of competition; demand for
the Company's products; changes in laws and regulations affecting the Company's
business; and the Company's ability to recruit and retain individuals with the
requisite technological expertise to continue to develop new products and
enhancements to existing products, to complete the development of its PlayNet
Music and PlayNet Sports products, to expand into new markets, and to transition
successfully from a development stage company to an operating company and other
matters described in "Risk Factors" and elsewhere in this Prospectus.

OVERVIEW

The Company designs, develops and sells entertainment systems which include
pay-per-play electronic game, entertainment and music juke box terminals
networked over the Internet. The Company's primary product, PlayNet Web, as well
as two products currently under development, PlayNet Music Station and PlayNet
Sports, are all designed to accept both cash and credit cards, have touch
screens, user-friendly interfacing and come pre-loaded with the Company's
proprietary software and other licensed content. The market for the Company's
products includes bars, theme bars and restaurants, hotel and restaurant chains,
coffee cafes, theme parks, studio stores, gyms, airport lounges and new "cyber"
establishments. All three products are intended to run on Microsoft Windows NT
platform networked by IBM Global Services.

The Company's business reflects the growing trend to connect people via computer
networks and, as a result, to create new forms of interactive entertainment in a
social setting. According to the Vending Times 1996 Census, total revenue in the
United States in 1995 for all amusements was approximately $6.3 billion, and
the United States electronic pay-per-play video game business generated
approximately $2.0 billion of that revenue

The Company's terminals are designed to utilize the Internet to enhance the
traditional entertainment and competitive game experience through innovations
such as linking multiple players in remote locations, offering tournament prize
play for sports, strategy and video game enthusiasts, and offering, for both
pay-per-play and purchase, catalogues of music titles from a broad array of
artists and eras. In addition, the terminals are designed to provide convenient
"out-of-home" access to select Internet services to provide a voice activated
chat feature, E-mail, World Wide Web browsing and Web casting, while
simultaneously functioning as points of purchase for entertainment tie-in
merchandise.

The Company's distribution strategy is to maximize both domestic and foreign
penetration of all three networked entertainment terminals. The Company's
experienced sales force is currently calling upon its long-term relationships
with a large roster of domestic and foreign distributors. These distributors are
now purchasing the PlayNet Web terminals directly from the Company and reselling
them to operators in their respective territories for installation in bars and
restaurants in the United States. It is the Company's intention to consummate
direct agreements with hotel and restaurant chains, theme bars and restaurants,
cyber lounges, coffee cafes, theme parks and airport lounges to insure
installations in prime global locations.

PlayNet is currently negotiating to acquire the rights to the libraries of
various music publishers and record labels for use on its PlayNet Music Station.
Concurrently, the Company is negotiating to enter into sponsorship and
advertising programs for its sports games, tournaments and prize contests with
high-profile consumer goods and beverage companies. In addition, the Company
also intends to establish various contractual arrangements, joint ventures and
other mutually advantageous programs with technology providers, equipment
manufacturers, distributors, major hospitality chains, consumer products
companies, music-related companies, content providers and others to develop
more efficient and higher-profile adaptations of its products and services,
which could be customized to meet marketplace requirements.

The Company's primary objective is to install a global network or "web" of its
terminals in choice locations which would, in turn, create a ready-made market
for its software offerings and merchandise. The Company believes that content
providers including those in the Web casting field will be attracted to the
Company's products both by virtue of design and by an allied desire to penetrate
out-of-home computer markets. Moreover, the Company believes that its
entertainment network will present a new and desirable forum for advertisers and
sponsors.

Pursuant to its agreement with IBM Global Services, the Company has established
an "Intranet within the Internet" creating an efficient, secure, and private
circuit to connect its digital terminals throughout the United States and the
world. This network, utilizing IBM's worldwide points of presence, provides for
prompt universal access to all offered games and services as well as for the
remote downloading to all installed terminals of new games and tournaments,
music titles, merchandise catalogues and other content and for the uploading of
financial and customer data. In addition, IBM will provide for the confidential
and expeditious verification of credit card authorizations.

CURRENT OPERATIONS

Through June 1997, the Company shipped 537 PlayNet Web networked entertainment
terminals. The 537 units aggregated revenues of approximately $1.15 million, to
be accounted for in accordance with the Company's revenue recognition policy.
Additionally, the Company currently has purchase orders outstanding for the
shipment of another 3,156 terminals, which is expected to generate sales of
approximately $7.1 million. However, in early April 1997 the Company experienced
system failure based on unexpected software incompatibility, the malfunction
being triggered by the daylight savings time change. To date, this malfunction
has been corrected, all units previously shipped have received the appropriate
upgrades and normal operations have resumed. However, the resolution of this
malfunction and the related upgrading of all the PlayNet Web terminals has
caused a delay in completing the financing arrangements and/or receiving
payments for certain of the shipped terminals. Completion of these sales
transactions is dependent upon the demonstration of the reliability of the
terminals.

On May 20, 1997, the Company entered into a non-binding agreement with
Tournament Associates, Inc. ("TAI") relating to a joint venture that will
operate computerized poker tournaments through retail locations in Pennsylvania.
TAI owns the proprietary rights to electronic video software that supports
competition and tournament poker play. Rulings under Federal and Pennsylvania
law have held that the 

                                      -3-
5
poker game system is not a gambling device because it awards prizes based on a
player's skill rather than random chance. Accordingly, the game can be offered
throughout Pennsylvania in tournaments in which prizes are awarded to
contestants. The non-binding agreement contemplates that TAI will grant a
non-exclusive, non-transferable sublicense to the joint venture for the use of
its poker game software and related intellectual property, and that PlayNet will
provide the hardware for integrating the licensed software into its PlayNet Web
terminals and will be responsible for the promotion, distribution, placement and
servicing of such terminals. Under the proposed agreement, PlayNet and TAI will
each own one-half of the issued and outstanding capital stock of the joint
venture, make equal capital contributions to fund operations, if required, and
share equally in distributions. It is expected that the joint venture will
continue for an initial term of two years, and thereafter, be renewable
annually. The Company is still in the process of negotiating and completing
final agreements. When and if consummated, PlayNet believes this agreement will
accelerate its opportunities with respect to its business strategy to develop
new markets and for revenues generated from tournaments.

STRATEGY
 
     The Company's primary strategic objective is to establish and rapidly grow
an installed base of its out-of-home, networked entertainment terminals. The
Company believes that its products and system architecture will enable it to
expand the variety of content and services available beyond that which is
available in existing products, as well as to increase the range of venues at
which such networked entertainment terminals can be profitably located. The
Company believes that the breadth of entertainment choices which its products
will deliver, coupled with a highly diverse range of public venues, will extend
the demographics of its potential users beyond that of adolescent males who
currently dominate the out-of-home video game market. The Company's primary
strategies consist of the following key elements:
 
     Enhancement of the Out-of-Home Entertainment Experience -- The Company
intends to offer networked entertainment content with multi-player,
multi-location and tournament prize play which it believes will result in
significantly more appealing entertainment experiences than are possible with
existing stand-alone, out-of-home, pay-per-play machines. Unlike most competing
entertainment systems, which are primarily based on proprietary hardware
platforms, the Company's entertainment terminals will offer touch-screen
activated access to a wide variety of video games including parlor, trivia,
strategy and action games and prize tournament play. Future enhancements of
PlayNet Web, will include access to Internet content, the ability to purchase
general entertainment merchandise, and ancillary features such as E-mail, World
Wide Web browsing and "real-time chat" with other users of the system. Future
enhancements to the PlayNet Music Station will include the ability to purchase
thousands of music titles as well as music-related merchandise.
 
     Hospitality Focus and Penetration Beyond Traditional Venues -- The Company
intends to focus its efforts on the hospitality sector which, according to the
1996 Vending Times Census of the Industry, comprise approximately 60% of the
out-of-home entertainment industry. This sector primarily includes bars,
restaurants and hotels and is distinguished from the remainder of the industry,
which is made up of specialized game arcades and venues such as movie theaters.
The Company believes that the greater variety of entertainment content offered
on its products could significantly expand the number of potential venues in the
hospitality sector and allow it to enter non-traditional venues such as airport
lounges, railroad stations, shopping malls, theme bars and restaurant chains.
The Company intends to accelerate the distribution of its products by forming
strategic alliances with major hospitality companies, both in the United States
and internationally.
 
     Expansion of Potential User Base -- The Company intends to offer a range of
games and tournaments, music titles and other content and features to appeal to
a broader user base than existing arcade offerings which historically target the
adolescent male demographic segment. The Company will initially target
hospitality venues, especially bars, theme bars and restaurant chains for
distribution of its terminals. Networked and prize tournaments and promotions
will be aimed at a broad array of consumers who are interested in social,
interactive entertainment and competitive tournament prize play. The Company
believes that its broad-based strategy will allow it to increase average revenue
per unit and the number of potential venues for its networked machines.
 
     Product Innovation and Improvement -- The Company believes that its
flexible system architecture will allow it to update and continually improve its
game and entertainment offerings on a cost effective basis through remote
downloads from central servers, based on customer feedback and demand. PlayNet
Sports offerings will be changed based on sport seasons. The Company also
intends to support prize tournaments with extensive promotional and sponsorship
campaigns.
 
     Recurring Revenue Streams -- The Company believes that other out-of-home
entertainment product manufacturers only receive revenue from the sale of
machines. The Company believes that its products will result in continuous
revenue from its out-of-home entertainment terminals as it expects that it will
be able to share in on-going terminal revenues. The Company intends to promote,
arrange sponsorship for, and organize national and local game tournaments with
cash and other prizes. The Company believes that tournament play involving other
electronic game products has resulted in an increase in terminal usage and
revenues, especially since such tournaments require higher game fees.
 
     Ancillary Revenue Opportunities -- The Company believes that other
opportunities to generate revenues exist. For example, sponsorship and
advertising revenue could be generated from on-screen advertisements and
tournaments. The Company could also collect fees on merchandise sales made
through its networked entertainment terminals. In addition, the Company may in
the future design a system to re-market data collected from user polls, music
selections and other similar usage to content providers, advertisers and product
and service vendors.
 
CURRENTLY AVAILABLE PRODUCT
 
  PlayNet Web
 
     PlayNet Web is a compact, multi-purpose networked entertainment terminal
designed to sit on a counter-top and accommodate a number of games and
entertainment-related activities. Users will be able to interact with the system
through its easy-to-use touch-screen interface, and select an activity from a
menu of options, including:
 
     -  Games:  Users will be able to select from a menu of ten to twelve games
including parlor, trivia, puzzle and action games. Fresh content will be
remotely downloaded on a regular basis. User scores will be compared to players
in the same venues.
 
     -  Tournaments:  Users may play a number of games competing against other
local, regional or national users of the PlayNet Web for cash and other prizes.
The Company believes that the limited local tournament play offered in existing
out-of-home games has demonstrated significant increases in game utilization and
revenue.
 
     -  Chat:  Users will be able to engage in voice activated chat with other
participants in remote locations through attached handsets. The chat bulletin
boards will be similar to those on America Online with moderators and special
interest groups; however, users will also be able to leave voice file messages
for retrieval at PlayNet Web terminals.
 
     -  Internet:  PlayNet Web will offer standard Internet access and e-mail
for users. PlayNet has designed a touch-screen interface which will prominently
display the most popular web sites which are likely to appeal to a location's
clientele (i.e. ESPN Sportzone in sports bars). Particularly popular sites will
be loaded periodically into the PlayNet Web terminals memory for high speed
retrieval upon use.
 
     -  Other:  Users will be able to order a variety of merchandise using
credit card acceptors and to access and post classified and personal
advertisements.
 
     PlayNet Web terminals will also be networked with any PlayNet Music
Stations in the same venue, allowing users to choose and play music on PlayNet
Music Station through the PlayNet Web terminal. Software will be updated as
necessary from the Company's central server location, allowing the Company to
introduce new games and improve features as necessary to maintain end-user
interest in the terminal.
 
     PlayNet Web is designed to accept $1, $5, $10 and $20 bills and credit
cards. PlayNet Web will have the capability to broadcast promotional messages on
the terminal while it is not being used and is exploring promotional
opportunities and tie-ins with potential sponsors.
 
PRODUCTS UNDER DEVELOPMENT
 
  PlayNet Music Station
 
     PlayNet Music Station is a networked juke box designed to provide real-time
access to thousands of songs via an Internet connection to the Company's central
server database. Through the same Internet connection, customers will be able to
access information about specific artists and to order merchandise and other
related ancillary products. PlayNet Music Station looks like a standard juke
box, but with the addition of two touch screens to facilitate navigation through
multiple song playing and merchandise options. Customers will be able to access
songs by format, e.g. country & western, jazz, rock, or search for and select a
particular song in the music database by title or by artist name.

    
     To date, juke boxes have typically been limited to the approximately 100
CDs physically present in the box. PlayNet Music Station will be linked to a
large database of readily accessible music, so customers will have significantly
greater choice of titles and artists. The Company expects its most popular
selections will be stored locally and will be augmented by a large database of
music stored at remote server sites. The Company will be able to update easily
the database of songs available at each location from remote servers in order to
keep song choices from becoming old or stale. In addition, the Company will be
able to customize song offerings according to location preferences and data
collected in the field.
    
 
   
     PlayNet Music Station does not require any mechanical movements to replace
and play CDs, which the Company expects will reduce breakdowns and maintenance
costs and allow machines to play selections continuously without any pauses
between songs or even start a queued selection before the end of the previous
selection. In this way, the number of songs played during peak hours is
potentially greater, resulting in increased revenue at each location. The
Company also anticipates being able to program individual terminals to play
certain music selections in locales at specified times or during periods that
the juke box is not being used by paying customers. Additionally, PlayNet Music
Station is designed to be able to display the name of the artist and song being
played along with promotional information while the music is playing. In this
way, record companies can promote their new or established artists in
demographically targeted locales (e.g. country music songs in country music
bars.)
    
     PlayNet Music Station is designed to accept $1, $5, $10 and $20 bills and
credit cards.
 
  PlayNet Sports

     PlayNet Sports is an interactive networked game system which will allow two
teams of up to four players each to compete against each other in sports games
such as tennis, football, soccer and baseball. Each unit is the size of a small
billiards table and will accommodate up to eight players, each with a trackball
controller. The Company plans to change the sports games available on PlayNet
Sports in accordance with the relevant sports seasons, offering variety for the
users. The Company plans to eventually introduce other non-sports games,
although sports games will at first dominate PlayNet Sports system's offerings
since one of the Company's initial objectives is to penetrate upscale sports
bars. Games are expected to change about once per quarter, and are expected to
provide not only challenging game play, but also highly charged competition.
Game updates will be downloaded remotely from the Company's central servers.
 
     PlayNet Sports has been specifically designed to support head-to-head and
tournament play. Teams or individuals will be able to compete against a computer
opponent, or against teams in either the same location or other venues through
an Internet connection. PlayNet plans to promote head-to-head play, matching up
opponents and allowing teams in one venue to challenge teams in other venues or
cities. The Company intends to set up weekly tournaments with cash and other
prizes to spark interest and spur competition. Teams will be able to customize
uniform colors, team member names and numbers. It is also intended that team
statistics will be available and displayed on a national basis.

     PlayNet Sports is designed to accept $1, $5, $10 and $20 bills and credit
cards and to broadcast promotional messages on the terminal while it is not
being used. PlayNet intends to attract major companies to sponsor PlayNet Sports
tournaments.

Effective June 30, 1997, the Company relocated its corporate headquarters to its
California facility to maximize the use of its assets and more efficiently
manage the business. At that time the New York City headquarter offices closed.
It is estimated that this relocation could reduce the general and administrative
costs of the organization approximately $1.0 million annually. In connection
with this relocation, the Company recorded a one time charge of $394,477 in the
second quarter for expenditures related to the closing of the New York office.

                                  RISK FACTORS

         The shares offered hereby involve a high degree of risk. Each
prospective investor should carefully consider, among other things, the
following risk factors in addition to the other information presented in this
Prospectus before making an investment decision. The Company undertakes no
obligation to release publicly the result of any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

         History of Net Losses; Accumulated Deficit. The Company has only a
limited operating history upon which an evaluation of the Company and its
prospects can be based. Prior to 1995, the Company was engaged in the developing
and licensing of consumer products. Since 1995 and through February 1997, the
Company had been engaged in the development of networked entertainment products,
which led to its current product line. In February 1997, the Company
commercially launched the PlayNet Web game and entertainment terminal, while
continuing its development activities with respect to its PlayNet Music Station
and PlayNet Sports networked entertainment terminals. As of April 30, 1997 the
Company had received purchase orders for an aggregate of 3,626 PlayNet Web
networked terminals representing anticipated gross sales of approximately $8.2
million. See "Current Operations" above.

         The Company has incurred net losses since inception and, as of April
30, 1997, the Company had an accumulated deficit of $ 38,838,496. As it
continues its entry into the commercial operating stage, the Company's losses
are expected to increase as a result of expenditures required to building
inventory, expanded outsourced manufacturing capacity, increased levels of
spending on marketing and sales and continuing expenditures on product and
content development. In addition, as a new business in an emerging industry, the
Company may encounter unforeseen difficulties, some of which may be beyond the
Company's ability to control, related to marketing, product development,
manufacturing, regulation and proprietary technology. There can be no assurance
that the Company will achieve or sustain profitability in the near future.

                                      -4-
6
         New Business Focus. The Company's future financial performance will
depend in large part upon the successful development, introduction and customer
acceptance of its networked entertainment products. There can be no assurance
that the Company will be successful in attracting and retaining customers for
such entertainment products. The Company's prospects must be considered in light
of the risks, expenses and difficulties frequently encountered by companies in
their development stage, particularly companies in new and rapidly evolving
markets. To address these risks, the Company must, among other things, respond
to competitive developments, continue to attract, retain and motivate qualified
persons, and continue to upgrade its technologies and commercialize products and
services incorporating such technologies. There can be no assurance that the
Company will be successful in addressing such risks.

         Developing Market; New Entrants; Unproven Acceptance of the Company's
Products and Revenue Model; Uncertain Adoption of Internet as a Medium of
Commerce and Communications. The market for the Company's entertainment
hardware, software and services is rapidly evolving and may see an increasing
number of market entrants. As is typical in the case of a new and rapidly
evolving industry, demand and market acceptance for recently introduced products
and services are subject to a high level of uncertainty. Critical issues
concerning the commercial use of the Internet (including security, reliability,
cost, ease of use and access, and quality of service) remain unresolved and may
impact the growth of Internet use. While the Company believes that its
entertainment units offer significant advantages for networked, location-based,
pay-per-play entertainment using the Internet, there can be no assurance that
entertainment over the Internet will become widespread, or that the Company's
entertainment units will become widely adopted for these purposes.

         Because the market for the Company's products and services is new and
evolving, it is difficult to predict the future growth rate, if any, and size of
this market. There can be no assurance as to the size of the market for the
Company's products and services or that the Company's proposed revenue sharing
model, which is an innovation in the industry, will be accepted by significant
market players. If the market develops more slowly than expected or becomes
saturated with competitors, the Company's business, operating results and
financial condition will be materially adversely affected.

         New Product Development and Technological Change. The Company's
revenues are expected to be derived from the sale of out-of-home entertainment
terminals, the sale and licensing of additional game content for those terminals
and the provision of network services, including tournaments, competitions and
networked game software. Accordingly, broad acceptance of the Company's products
and services by customers is critical to the Company's future success, as is the
Company's ability to design, develop, test and support new products and
enhancements on a timely basis that meet changing customer needs and respond to
technological developments and emerging industry standards. In addition, there
can be no assurance that the Company will not experience difficulties that could
delay or prevent the successful development, introduction and marketing of new
products and enhancements, or that its new products and enhancements will
adequately meet the requirements of the marketplace and achieve market
acceptance. The Company is substantially dependent upon its server and
integrated applications software products that have only recently been
commercialized. There can be no assurance that as the number of units in
operation increases that errors will not be found in the Company's products, or,
if discovered, successfully corrected in a timely manner. If the Company is
unable to develop on a timely basis new entertainment products, enhancements to
existing products or make error corrections, or if such new products or
enhancements do not achieve market acceptance, the Company's business, operating
results and financial condition will be materially adversely affected.

         Evolving Distribution Channels. The Company's distribution strategies
include the traditional out-of-home game distribution channels and the Company
seeks to expand distribution into markets that were previously under-utilizing
out-of-home entertainment units. While these potential customers have
demonstrated significant interest in the Company's PlayNet Web during its
on-site tests and in the first 

                                       -5-
7
weeks of commercial distribution, there can be no assurance that the Company
will be able to continue to attract or retain distributors or access to other
venues. In addition, the Company's agreements with distributors typically do not
restrict them from distributing competing products. Further, in some cases the
Company intends to grant exclusive distribution rights that are limited by
territory and in duration. Consequently, the Company may be adversely affected
should any distributor fail to adequately penetrate its market segment. The
inability to retain important distributors, or their inability to penetrate
their respective market segments, could materially adversely affect the
Company's business, operating results and financial condition.

         The Company anticipates that it will distribute and broadcast its
networked game software and other electronic content to the operators of its
products over the Internet. Distributing the Company's products over the
Internet may make the Company's software more susceptible than other software to
unauthorized copying and use. If users were to become less sensitive to avoiding
copyright infringement, as a result of changing legal interpretations with
respect to liability for unauthorized use of the Company's software or
otherwise, users were to become less sensitive to avoiding copyright
infringement, the Company's business, operating results and financial condition
would be materially adversely affected.

         Competition. The markets served by the Company are extremely
competitive. The Company expects competition to persist, intensify and increase
in the future. Because there are no substantial barriers to entry, an influx of
new market entrants is expected to continue in response to the growing demand
for entertainment, information and data communication technology products and
services. Many of the Company's current and potential competitors enjoy a
greater market presence and possess substantially greater technical, financial
and marketing resources than the Company. The market for Internet-enabled,
location-based entertainment products is new, and subject to rapid technological
change. The Company expects competition to intensify and increase in the future.
Almost all of the Company's potential competitors have longer operating
histories, greater name recognition in the marketplace, larger installed
customer bases for their preexisting product lines and significantly greater
financial, technical and marketing resources than the Company. Such competition
could materially adversely affect the Company's business, operating results or
financial condition. The Company is aware that other attempts are being
undertaken to develop networked juke boxes and Internet-enabled products for the
location-based entertainment marketplace. The Company believes that it competes
for discretionary spending in the overall entertainment business which includes
(i) home-based entertainment, such as television and home video, pre-recorded
music, books and magazines, and personal computer and console based
entertainment, and (ii) out-of-home entertainment, such as live events,
theatrical exhibitions, video games, billiards, pinball machines and movies.

         Increased competition could result in significant price competition,
which in turn could result in significant reductions in the average selling
price of the Company's products. In addition, competition could result in
increased selling and marketing expenses, which could adversely affect the
Company's profitability. There can be no assurance that the Company will be able
to offset the effects of any such price reductions through an increase in the
sales of its entertainment units, higher revenue from enhanced services, cost
reductions or otherwise. Increased competition, price or otherwise, could result
in erosion of the Company's market share and adversely affect the Company's
operating results. There can be no assurance that the Company will have the
financial resources, technical expertise or marketing and support capabilities
to continue to compete successfully in the out-of-home entertainment market.

         Dependence Upon Suppliers, Manufacturers, Licensors and Third-Party
Financing Sources; Limited Sources of Supply; Dependence Upon Network
Infrastructure. The Company relies on other companies to supply certain key
components of its network infrastructure, including telecommunications services
and networking equipment, which, in the quantities and quality demanded by the
Company, are available only from sole or limited sources. The Company is also
dependent upon local exchange carriers ("LECs") to 

                                      -6-
8
provide telecommunications services to, and Internet service providers ("ISPs")
to provide Internet connection for, the Company and its customers. In that
regard the Company has entered into a comprehensive Internet server delivery and
support services contract with IBM Global Services, one of the largest Internet
service providers. Any failures in such services or the receipt of timely
correction to such failures would have a material adverse effect on the
Company's business, financial condition and results of operations.

         The Company is also dependent on its suppliers' ability to provide
necessary products and components that comply with various Internet and
telecommunications standards and that operate with products and components from
other vendors. Any failure of the Company's sole or limited source suppliers to
provide products or components that comply with Internet standards or that are
compatible with other products or components used by the Company in its network
infrastructure could have a material adverse effect on the Company's business,
financial condition and results of operations.

         The Company currently has a one year annually renewable agreement with
an unaffiliated vendor, Mac Cal Co., Inc., to manufacture PlayNet Web countertop
units, with production having commenced in January, 1997. The Company also
intends to outsource the manufacturing of a significant portion of its other
hardware requirements. Any failure or delay by manufacturers to deliver such
hardware, or any defect in, or non-conforming production of, such hardware would
disrupt the Company's operations.

         Management of Growth; Dependence on Key Personnel. The Company
continues to experience rapid growth that could strain the Company's managerial
and other resources. From July 31, 1995 through June 30, 1997, the number of the
Company's full-time employees increased from 22 to 80. Further selected
additions to the employee base to meet anticipated management, sales and
marketing needs are anticipated during the balance of 1997. Many of the key
employees have worked together only for a short time. The Company's ability to
manage its growth effectively will require it to continue to improve its
operational, financial and other internal systems, and to train, motivate,
manage and retain its current employees and attract equivalent new employees.
Competition for highly qualified personnel is intense. If the Company's
management is unable to manage growth effectively and employees are unable to
achieve anticipated performance levels, the Company's results of operations
could be adversely affected. Additionally, the Company depends on the services
of certain of its key employees, including Shmuel Cohen and Nolan K. Bushnell
and the loss of any such services could have a material adverse effect on the
Company.

         Risk of System Failure; Security Risks. The Company's operations are
dependent upon its ability, and the ability of its suppliers, to protect its
network infrastructure against damage from fire, earthquakes, power loss,
telecommunications failures and similar events. Despite precautions taken by the
Company and the industry in general, the occurrence of a natural disaster or
other unanticipated problems at the Company's network operations center or nodes
in the future could cause interruptions in the services furnished by the
Company. In addition, failure of the Company's telecommunications and Internet
service providers to supply the data communications capacity required by the
Company as a result of a natural disaster, operational disruption, Internet
capacity overload or for any other reason could cause interruptions in the
services provided by the Company. Any damage or failure that causes
interruptions in the Company's operations could have a material adverse effect
on the Company's business, financial condition and results of operations.

         Despite the implementation of security measures, the core of the
Company's network infrastructure is vulnerable to computer viruses and
disruptive problems. Internet access providers have in the past experienced, and
may in the future experience, interruptions in service as a result of the
accidental or intentional actions of Internet users, current and former
employees or others. Unauthorized use could also potentially jeopardize the
security of confidential information stored in the Company's computer systems,
which may result in liability of the Company to its customers. Although the
Company intends to continue 

                                       -7-
9
to implement industry-standard security measures, such measures have been
circumvented in the past, and there can be no assurance that measures
implemented by the Company will not be circumvented in the future. Eliminating
computer viruses and alleviating other security problems may require
interruptions, delays or cessation of service to the Company's customers which
could have a material adverse effect on the Company's business, financial
condition and results of operations.

         The Company's success will depend upon the capacity, reliability and
security of its network infrastructure. The Company must continue to expand and
adapt its network infrastructure as the number of users and the amount of
information they wish to transfer increases, and to meet changing customer
requirements. The expansion and adaptation of the Company's network
infrastructure will require substantial financial, operational and management
resources. There can be no assurance that the Company will be able to expand or
adapt its network infrastructure to meet additional demand or its customers'
changing requirements on a timely basis, at a commercially reasonable cost, or
at all. Any failure of the Company to expand its network infrastructure on a
timely basis or adapt it either to changing customer requirements or to evolving
industry standards could have a material adverse effect on the Company's
business, financial condition and results of operations. The Company is aware
that significant delays exist for the installation of integrated services
digital network ("ISDN") lines in certain parts of the United States and that
such service is not available in all areas.

         A significant barrier to the widespread acceptance of Internet commerce
is uncertainty over the secure exchange of value over public networks. The
Company relies on encryption and authentication technology necessary to provide
the security to effectuate the secure exchange of value, including credit card
transactions. There can be no assurance that advances in computer capabilities,
new discoveries in the field of cryptography or other events or developments
will not result in a compromise or breach of the algorithms used by the Company
to protect customer transaction data. If any such compromise of the Company's
security were to occur, it could have a material adverse effect on the Company's
business, financial condition and results of operations.

         Governmental Regulation. In the United States and many other countries,
games of chance must be expressly authorized by law. Once authorized, such games
are subject to extensive and evolving domestic and foreign governmental
regulation, including federal, state and local regulation. There can be no
assurance that the operation of all of the Company's games, including prize
tournament games, will be approved by all of the jurisdictions in which the
Company intends to market and operate its game and prize tournament game
products or that those jurisdictions in which these games and prize tournament
game products are currently permitted will continue to permit such activities.
In addition, future government regulation could be burdensome to the Company,
its personnel and its stockholders. Moreover, material increases in taxes or
fees on the games' operations could adversely affect the Company.

         The Company is not currently subject to direct regulation by the
Federal Communications Commission or any other agency, other than regulations
applicable to businesses generally. Changes in the regulatory environment
relating to the Internet access industry, including regulatory changes which
directly or indirectly affect telecommunication costs or the likelihood or scope
of competition, could have a material adverse effect on the Company's business,
financial condition and results of operations. Due to the increase in Internet
use and publicity, it is possible that laws and regulations may be adopted with
respect to the Internet, including privacy, pricing and characteristics of
products or services. The Company cannot predict the impact, if any, that future
laws and regulations or legal or regulatory changes may have on its business.

         The law relating to the liability of on-line services companies and
ISPs for information carried on or disseminated through their systems is
currently unsettled. Several private lawsuits seeking to impose such liability
upon on-line services companies and ISPs are currently pending. In addition,
legislation has been proposed which would impose liability for or prohibit the
transmission on the Internet of certain types of 

                                      -8-
10
information and content. The imposition upon the Company or ISPs of potential
liability for information carried on or disseminated through their systems could
require the Company to implement measures to reduce its exposure to such
liability, which may require the expenditure of substantial resources, or to
discontinue certain product features. The increased attention focused upon
liability issues as a result of these lawsuits and legislative proposals could
impact the growth of Internet use. While the Company maintains certain
insurance, such insurance may not be adequate to compensate the Company in the
event the Company becomes liable for information carried on or disseminated
through its systems. Any costs not covered by insurance incurred as a result of
such liability or asserted liability could have a material adverse effect on the
Company's business, financial condition and results of operations.

         Fluctuations in Quarterly Results. As a result of the Company's limited
operating history, the Company does not have historical financial data for a
significant number of periods on which to base planned operating expenses. The
Company's expense levels are based in part on its expectations as to future
revenues and are expected to increase. Quarterly sales and operating results
generally depend on the volume and timing of, and ability to fulfill, orders
received within the quarter, which are difficult to forecast. The Company may be
unable to adjust spending in a timely manner to compensate for any unexpected
revenues shortfall. Accordingly, any significant shortfall of demand for the
Company's products and services in relation to the Company's expectations would
have an immediate adverse impact on the Company's business, operating results
and financial condition. In addition, with the recent launch of its PlayNet Web
terminal the Company plans to increase its operating expenses to fund greater
levels of sales and marketing activities and operations, develop new
distribution channels, broaden its customer support capabilities and continue
its research and development activities with respect to customized versions of
the PlayNet Web and its PlayNet Music and PlayNet Sports entertainment and
electronic game systems. To the extent that such expenses precede, or are not
subsequently followed by, increased revenues, the Company's business, operating
results and financial condition will be materially adversely affected.

         The Company expects to experience significant fluctuations in future
quarterly operating results that may be caused by many factors, including demand
for the Company's products, expenses related to the introduction or enhancement
of products by the Company and its competitors, market acceptance of new
products, mix of distribution channels through which products are sold, mix of
products and services sold, mix of international and North American revenues,
and general economic conditions. As a result, the Company believes that
period-to-period comparisons of its results of operations are not necessarily
meaningful and should not be relied upon as any indication of future
performance. Due to all of the foregoing factors, it is likely that in some
future quarter the Company's operating results will be below the expectations of
public market analysts and investors. In such event, the price of the Company's
Common Stock would likely be materially adversely affected.

         Uncertainty of Additional Financing. The Company anticipates, based on
currently proposed plans and assumptions relating to its operations (including
the costs associated with, and the timetable for, development of the networked
entertainment products), that the projected cash flow from operations and the
proceeds of various private placement financings and a potential secondary
public offering, will be sufficient to satisfy its contemplated cash
requirements for at least twelve months following the consummation of this
offering. In the event that the Company's plans change, its assumptions change
or prove to be inaccurate or if the proceeds of the private placements or
expected cash flow prove to be insufficient, the Company may be required to seek
additional financing. There can be no assurance that the proceeds of the private
placements will be sufficient to permit the Company to complete the development
and launch of its networked entertainment products and to achieve the expected
growth of the Company. The Company may need to raise additional funds through
public or private debt or equity financings in order to take advantage of
unanticipated opportunities, including more rapid international expansion or
acquisitions of complementary businesses or technologies, or to develop new
products or otherwise respond to unanticipated competitive pressures. If
additional funds are raised through the issuance of equity

                                      -9-
11
securities, the percentage ownership of the current stockholders of the Company
may be reduced and such equity securities may have rights, preferences or
privileges senior to those of the holders of the Company's Common Stock. There
can be no assurance that additional financing will be available on terms
favorable to the Company, or at all. If adequate funds are not available or are
not available on acceptable terms, the Company may not be able to take advantage
of unanticipated opportunities, develop new products or otherwise respond to
unanticipated competitive pressures. Such inability could have a material
adverse effect on the Company's business, financial condition and results of
operations.

         Possible Future Payments to Third Parties; Uncertain Protection of
Intellectual Property. The Company's success and ability to compete is dependent
in part upon its proprietary technology. While the Company relies on patent,
trademark, trade secret and copyright law to protect its technology, the Company
believes that factors such as the technological and creative skills of its
personnel, new product developments, frequent product enhancements, name
recognition and reliable product maintenance are more essential to establishing
and maintaining a technology leadership position. The Company presently has one
pending patent applications relating to the encryption technology used in its
out-of-home entertainment business. However, there can be no assurance that
others will not develop technologies that are similar or superior to the
Company's technology. The source code for the Company's proprietary software is
protected both as a trade secret and as a copyrighted work. The Company
generally enters into confidentiality or license agreements with its employees,
consultants and vendors, and generally controls access to and distribution of
its software, documentation and other proprietary information. Despite these
precautions, it may be possible for a third party to copy or otherwise obtain
and use the Company's proprietary or licensed content, products or technology
without authorization, or to develop similar technology independently. In
addition, effective copyright and trade secret protection may be unavailable or
limited in certain foreign countries, and the global nature of the Internet
makes it virtually impossible to control the ultimate destination of the
Company's products. Despite the Company's efforts to protect its proprietary
rights, unauthorized parties may attempt to copy aspects of the Company's
products or to obtain and use information that the Company regards as
proprietary. Policing unauthorized use of the Company's products is difficult.
There can be no assurance that the steps taken by the Company will prevent
misappropriation of its technology or that such agreements will be enforceable.
In addition, litigation may be necessary in the future to enforce the Company's
intellectual property rights, to protect the Company's trade secrets, to
determine the validity and scope of the proprietary rights of others, or to
defend against claims of infringement or invalidity. Such litigation could
result in substantial costs and diversion of resources and could have a material
adverse effect on the Company's business, financial condition or results of
operations.

         The Company also relies on certain technology which it licenses from
third parties, including software which is integrated with internally developed
software and used in the Company's products to perform key functions. There can
be no assurance that these third party technology licenses will continue to be
available to the Company on commercially reasonable terms. The loss of or
inability to maintain any of these technology licenses could result in delays or
reductions in product shipments which could materially adversely affect the
Company's business, financial condition or results of operations.

         Risks Associated with International Expansion. A long-term component of
the Company's strategy is its planned expansion into international markets. To
date, the Company has no experience in developing localized versions of its
products and marketing and distributing its products internationally. There can
be no assurance that the Company or the entities with which it partners in these
international markets will be able to successfully market, sell and deliver the
Company products in these markets. In addition to the uncertainty as to the
Company's ability to expand its international presence, there are certain risks
inherent in doing business on an international level which could adversely
impact the success of the Company's international operations. These risks
include technical difficulty in localizing the products for the specific
territories, changes in regulatory requirements, export restrictions, export
controls relating to encryption technology, tariffs and other trade barriers,
difficulties in staffing and managing foreign operations, longer

                                      -10-
12
payment cycles, problems in collecting accounts receivable, political
instability, fluctuations in currency exchange rates, seasonal reductions in
business activity during the summer months in Europe and certain other parts of
the world and potentially adverse tax consequences. In some cases, the
prohibitive costs of telephones, telephone lines, high speed links and Internet
access may exclude whole countries. There can be no assurance that one or more
of such factors will not have a material adverse effect on the Company's future
international operations and, consequently, on the Company's business, operating
results and financial condition.

         Concentration of Stock Ownership. The present directors, executive
officers and their respective affiliates are the beneficial owners of
approximately 28.30% of the outstanding Common stock and upon completion of this
offering, the present directors, executive officers and their respective
affiliates will beneficially own approximately 26.65% of the outstanding Common
Stock. As a result, these stockholders are and will be able to exercise
significant influence over all matters requiring stockholder approval, including
the election of directors and approval of significant corporate transactions.
Such concentration of ownership may also have the effect of delaying or
preventing a change in control of the Company.

         Delisting from Nasdaq SmallCap Market. On April 4, 1997, the Company
received a notice from Nasdaq asserting a deficiency in its compliance with the
maintenance standards for continued inclusion on the Nasdaq SmallCap Market. In
response to this notice, the Company submitted a proposal for achieving
compliance with such standards and requested a delay of any action to delist the
Common Stock from the Nasdaq SmallCap Market. However, Nasdaq declined the
Company's request, and gave notice to the Company on May 15, 1997 that the
Common Stock would be delisted effective with the close of business on May 23,
1997, subject, however, to the Company's appeal of the Nasdaq decision.
Accordingly, the Company applied for an oral hearing to review the delisting
decision. A hearing was held on June 27, 1997. On July 11, 1997, the Listing
Qualifications Hearing Panel (the "Panel") notified the Company that in light of
its opinion that the Company had presented a plan of compliance which has a high
likelihood of success, that the Panel had determined to grant the Company a
limited time exception to the capital and surplus requirement as set forth in
NASD Marketplace Rule 4310(c)(03) on the condition that on or before July 31,
1997 the Company must make a public filing with the SEC and Nasdaq which
contains a June 30, 1997 balance sheet with pro forma adjustments for any
significant transactions on or before the filing date and that such pro forma
balance sheet must evidence minimum capital and surplus of $15,000,000. In the
event the Company fails to meet any terms of the exception, its Common Stock
will be immediately delisted from the Nasdaq SmallCap Market. In addition, since
the Company is operating under the exception granted by the panel, its continued
listing on the Nasdaq SmallCap Market is conditional, and as such, effective
July 16, 1997, the trading symbol of the Company's Common Stock has been
modified to add a fifth character "C" and has changed from "PLNT" to "PLNTC".
The Company's trading symbol will contain this fifth character until the Company
has demonstrated compliance with the terms of the exception. The Company
believes that it can meet the requirements of the exception granted by the
Panel. The failure to meet the requirements of the exception granted by the
Panel will adversely affect the market price of the Company's Common Stock.

         Possible Volatility of Stock Price. To date there has been a limited
public market for the Company's Common Stock, and there can be no assurance that
an active public market for the Common Stock will develop or be sustained after
the offering. The market price of the Company's Common Stock is likely to be
highly volatile and could be subject to wide fluctuations in response to
quarterly variations in operating results, delays in new feature or product
introduction, announcements of technological innovations or new products by the
Company or its competitors, changes in the regulatory environment, changes in
financial estimates by securities analysts, or other events or factors. In
addition, the stock market has experienced significant price and volume
fluctuations that have particularly affected the market prices of equity
securities of many technology and entertainment companies and that often have
been unrelated to the operating performance of such companies. In the past,
following periods of volatility in the market price of a

                                      -11-
13
company's securities, class action litigation has often been instituted against
such a company. Such litigation could result in substantial costs and a
diversion of management's attention and resources, which would have a material
adverse effect on the Company's business, operating results and financial
condition. Any broad market fluctuations may adversely affect the market price
of the Company's Common Stock.

         Shares Eligible for Future Sale. Sales of a substantial number of
shares of Common Stock in the public market following this offering could
adversely affect the market price for the Common Stock and could impair the
Company's future ability to raise additional capital through a private or public
offering of its equity securities. Under recently adopted amendments to Rule 144
of the Securities Act of 1933 ("Rule 144"), 9,889,290 shares of the Company's
Common Stock, which were previously "restricted" securities under Rule 144, have
surpassed the new two year holding period and are eligible for unlimited resales
and an additional 2,007,430 shares of the Company's Common Stock will surpass
such two year period within 45 days after the date of this Prospectus. In
addition, as of the date of this Prospectus, an additional 784,106 shares of the
Company's Common Stock have surpassed the new one year holding period and are
now eligible for resale subject only to the fulfillment of certain restrictions
on the volume, method and manner of resale specified in Rule 144. Sales of such
shares could have a material adverse effect on the market price for the
Company's Common Stock.

         Immediate, Substantial Dilution. Purchasers of shares of Common Stock
in this offering will incur immediate and substantial dilution in net tangible
book value per share. Additional dilution may occur upon exercise of outstanding
stock options or warrants or the conversion of certain of the Company's
convertible promissory notes, or in connection with possible future financings
to meet the Company's future capital requirements.

         No Dividends. Pursuant to a settlement with certain stockholders of the
Astro-Stream corporation related to the Merger, a special dividend of $0.0932
per share was paid on or about August 6, 1996 to stockholders on the record date
of May 5, 1995. Except for this special dividend, the Company has never paid any
dividends on its Common Stock, nor does it anticipate paying dividends on its
Common Stock in the foreseeable future. The Company plans to retain any earnings
to finance the development and expansion of its business.

         Anti-Takeover Effects of Preferred Stock. The Company's Restated
Certificate of Incorporation authorizes the issuance of "blank check" Preferred
Stock with such designations, rights and preferences as may be determined from
time to time by the Board of Directors. Accordingly, the Board is empowered,
without stockholder approval, to issue Preferred Stock with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
relative voting power or other rights of the holders of the Company's Common
Stock. In the event of issuance, the Preferred Stock could be used, under
certain circumstances, as a method of discouraging, delaying or preventing a
change in control of the Company. Although the Company has no present intention
to issue any shares of Preferred Stock, there can be no assurance that the
Company will not do so in the future. If the Company issues shares of Preferred
Stock, the issuance may have a dilutive effect upon the holders of the Company's
Common Stock, including the purchasers of the shares being offered hereby.

                                USE OF PROCEEDS

         The Company will not receive any proceeds from the sale or distribution
of the Shares being offered hereby, but will benefit from the services rendered
under the Compensation Agreements.

                                      -12-
14
                              PLAN OF DISTRIBUTION

As soon as reasonably practicable, after the filing of this Registration
Statement, the Shares to which this Prospectus relates will be issued by the
Company from time to time, or at any one time, as compensation pursuant to
negotiated Compensation Agreements the following consultants to the Company and
in the following amounts.

              CONSULTANT                              AMOUNT OF SHARES

     The Kettle Trust                                       50,000
     Equity Management Partners, Inc.                      300,000
     Langley Downey Entertainment, Inc.                     14,666
     Henry Steeneck                                         18,000
     Joel F. Brownstein                                    250,000
                                                           -------
                                                           632,666

All Shares are issued in lieu of cash compensation for services rendered and to
be rendered and upon issuance, will be, duly authorized, validly issued, fully
paid and nonassessable. All Shares are not subject to the provisions of the
Employee Retirement Income Security Act of 1974 and shall not have any
restrictions on resale. See also Item 4, Description of Securities.

                                    PART II.

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.  INCORPORATION OF DOCUMENTS BY REFERENCE.

         The following documents heretofore filed by the Registrant with the
Securities and Exchange Commission (File No. 0-25296) pursuant to Section 13(a)
of the Securities Exchange Act of 1934 (the "1934 Act") are incorporated herein
by reference:

         (a)  The Registrant's Annual Report on Form 10-KSB and 10-KSB/A for the
fiscal year ended October 31, 1996;

         (b)  The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended January 31, 1997 and April 30, 1997; and

         (c)  See Item 4, Description of Securities below.

         All documents filed subsequent to the date of this Registration
Statement pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act and
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of the filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement.

                                      -13-
15
ITEM 4. DESCRIPTION OF SECURITIES.

         All of the 632,666 shares of Common Stock, par value $.001 per share
(the "Common Stock"), offered hereby are being offered by PlayNet Technologies,
Inc. (the "Registrant"). The Common Stock is currently included on the Nasdaq
SmallCap Market under the symbol "PLNTC." The last reported sales price for the
Common Stock on the Nasdaq SmallCap Market on July 17, 1997 was $1.5625 per
share.

         The Registrant is authorized to issue 40,000,000 shares of Common
Stock, par value $.001 per share, and 1,000,000 shares of preferred stock, par
value $.001 per share. As of the date hereof, the Registrant had 14,980,319
shares of Common Stock outstanding held of record by approximately 800 holders.
No shares of Preferred Stock are currently outstanding.

         Holders of Common Stock are entitled to one vote for each share held of
record on each matter submitted to a vote of stockholders. There is no
cumulative voting for election of directors. Subject to the prior rights of any
series of Preferred Stock which may from time to time be outstanding, if any,
holders of Common Stock are entitled to receive dividends when, as, and if
declared by the Board of Directors out of funds legally available therefor and,
upon the liquidation, dissolution or winding up of the Registrant, are entitled
to share ratably in all assets remaining after payment of liabilities and
payment of accrued dividends and liquidation preferences on the Preferred Stock,
if any. Holders of Common Stock have no preemptive rights and have no rights to
convert their Common Stock into any other securities. All outstanding shares of
Common Stock are, and the shares of Common Stock offered hereby upon issuance,
will be, duly authorized, validly issued, fully paid and nonassessable.

         The Registrant's Restated Certificate of Incorporation authorizes the
issuance of "blank check" Preferred Stock with such designations, rights and
preferences as may be determined from time to time by the Board of Directors.
Accordingly, the Board is empowered, without stockholder approval, to issue
Preferred Stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the relative voting power or other rights of the
holders of the Registrant's Common Stock. In the event of issuance, the
Preferred Stock could be used, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of the Registrant.
Although the Registrant has no present intention to issue any shares of
Preferred Stock, there can be no assurance that the Registrant will not do so in
the future. If the Registrant issues shares of Preferred Stock, the issuance may
have a dilutive effect upon the holders of the Registrant's Common Stock,
including the purchasers of the shares being offered hereby.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.

         Philip K. Yachmetz, Esq. has passed upon the legality under the law of
Delaware, the state in which the Company is incorporated, of the Common Stock of
the Company being offered hereby. Mr. Yachmetz is the holder of 1,000 shares of
the Common Stock of the Company.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Section 145 of the Delaware General Corporation Law authorizes a
corporation, under certain circumstances, to indemnify its directors and
officers (including reimbursement for expenses incurred). The registrant has
provided for indemnification to the extent permitted by the provisions of the
Delaware statute in its charter and by-laws. The registrant also maintains
directors and officers' liability insurance (subject to certain exclusions and
limitations) against certain liabilities, including certain liabilities under
the Securities Act of 1933. See Item 9, "Undertakings."

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.

                                      -14-
16
         Not Applicable.

ITEM 8.  EXHIBITS.

Exhibit
Number   Description

4.01     Restated and Amended Certificate of Incorporation **
4.02     Certificate of Amendment to the Restated and Amended Certificate of
         Incorporation***
4.06     By-Laws****
5.01     Opinion of Philip K. Yachmetz, Esq., counsel to the registrant, as to
         the legality of the Common Stock being offered.*
23.01    Consent of Coopers & Lybrand., LLP.*
23.02    Consent of Philip K. Yachmetz, Esq. (contained in Exhibit 5.01).
24.01    Powers of Attorney of certain officers and directors of the Registrant
         (included in signature page).
99.1     Compensation Agreement with The Kettle Trust*
99.2     Compensation Agreement with Equity Management Partners Corporation*
99.3     Compensation Agreement with Langley Downey Entertainment, Inc.*
99.4     Compensation Agreement with Henry Steeneck*
99.5     Compensation Agreement with Joel F. Brownstein*

*    Filed herewith.
**   Incorporated by reference to Exhibit 3.1 to Registrant's Annual Report on
     Form 10-KSB for the year ended October 31, 1995, filed on January 29, 1996.
***  Incorporated by reference to Exhibit 3.1A to Registrant's Annual Report on
     Form 10-KSB for the year ended October 31, 1996, filed on February 13,
     1997.
**** Incorporated by reference to Exhibit 3.2 to Registrant's Annual Report on
     Form 10-KSB for the year ended October 31, 1995, filed on January 29, 1996

ITEM 9.  UNDERTAKINGS.

         The undersigned registrant hereby undertakes:

         (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

                  (i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;

                  (ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;

                                      -15-
17
                  (iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.

         (2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

         The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

                                      -16-
18
                                   SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco, State of California, on the 18th day
of July, 1997.

                                    PLAYNET TECHNOLOGIES, INC.
                                    (Registrant)

                                    By: /s/ Shmuel Cohen
                                       ----------------------
                                       Shmuel Cohen
                                       President and Chief Executive Officer

                                    By: /s/ Andrew Nimitz
                                       ----------------------
                                       Andrew Nimitz
                                       Controller

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned hereby constitutes
and appoints Shmuel Cohen his true and lawful attorneys-in-fact and agents, for
him and in his name, place and stead, in any and all capacities, with full power
to act alone, to sign any and all amendments to this Registration Statement, and
to file each such amendment to this Registration Statement with all exhibits
thereto, and any and all documents in connection therewith, with the Securities
and Exchange Commission, hereby granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform any and all acts
and things required and necessary to be done, as fully and to all intents and
purposes as, he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, may lawfully do or cause
to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.

         Signature                  Title                       Date

/s/ Joseph Ettinger                Director                 July 17, 1997

Joseph Ettinger

/s/ Yael Cohen                     Director                 July 17, 1997

Yael Cohen

/s/ Barry Frank                    Director                 July 17, 1997

Barry Frank

/s/ Mark Lewis                     Director                 July 17, 1997

Mark Lewis

                                      -17-