Interplay Entertainment Corp. finally filed it's SEC form 10-K, which should probably mean they'll no longer be IPLYE, as they've now satisfied the required filing.
There's a lot of repeating known stuff in the filing, but here's some bits (with some high-lighting):<blockquote>As of April 1, 2004, we were three months in arrears on the rent obligations for our corporate lease in Irvine, California. On April 9, 2004, our lessor served us with a Three-Day Notice to Pay Rent or Surrender Possession. If we are unable to pay our rent, we may lose our office space, which would interrupt our operations and cause substantial harm to our business. We have received notice from the Internal Revenue Service ("IRS") that we owe approximately $70,000 in payroll tax penalties. We estimate that we owe an additional $10,000, which we have accrued in penalties for nonpayment of approximately $99,000 in Federal and State payroll taxes, which were due on March 31, 2004 and is still outstanding. We were unable to meet our April 15, 2004 payroll obligations to our employees. Our property, general liability, auto, workers compensation, fiduciary liability, and employment practices liability have been cancelled.
We are currently in default of the settlement agreement with Warner and have entered into a payment plan, of which we are in default, for the balance of the $0.32 million owed payable in one remaining installment. On or about February 23, 2004, we received correspondence from Atari Interactive alleging that Interplay had failed to pay royalties due under the D&D license as of February 15, 2004. If we are unable to cure this alleged breach of the license agreement, we may lose our remaining rights under the license, including the rights to continued distribution of BALDUR'S GATE: DARK ALLIANCE II. The loss of the remaining rights to distribute games created under the D&D license could have a significant negative impact on our future operating results.
In January 2004, Titus, our 71% majority shareholder, disclosed in their annual report for the fiscal year ended June 30, 2003, filed with the Autorite des Marches Financiers of France, that they were involved in a litigation with one of our former founders and officers and as a result had deposited pursuant to a California Court Order approximately 8,679,306 shares of our common stock held by them (representing approximately 9% of our issued and outstanding common stock) with the court. Also disclosed was that Titus was conducting settlement discussions at the time of the filing to resolve the issue. To date, Titus has maintained voting control over the 8,679,306 million shares of common stock and has not represented to us that a transfer of beneficial ownership has occurred. Nevertheless, such transfer of shares may occur in fiscal 2004.</blockquote> They report a net income over 2003 as 4%, compare to 34% for 2002 and a loss of 82% for 2001. They're income sources were 21% PC, 34% video game console and a whopping 45% OEM, royalty and licensing. But here's the big whopper under risk factors:<blockquote>WE CURRENTLY HAVE A NUMBER OF OBLIGATIONS THAT WE ARE UNABLE TO MEET WITHOUT GENERATING ADDITIONAL REVENUES OR RAISING ADDITIONAL CAPITAL. IF WE CANNOT GENERATE ADDITIONAL REVENUES OR RAISE ADDITIONAL CAPITAL IN THE NEAR FUTURE, WE MAY BECOME INSOLVENT AND/OR OUR STOCK WOULD BECOME ILLIQUID OR WORTHLESS.
(...)
WE HAVE A HISTORY OF LOSSES, AND MAY HAVE TO FURTHER REDUCE OUR COSTS BY CURTAILING FUTURE OPERATIONS TO CONTINUE AS A BUSINESS.
(...)
WE HAVE A LIMITED NUMBER OF KEY MANAGEMENT AND OTHER PERSONNEL. THE LOSS OF ANY SINGLE MEMBER OF MANAGEMENT OR KEY PERSON OR THE FAILURE TO HIRE AND INTEGRATE CAPABLE NEW KEY PERSONNEL COULD HARM OUR BUSINESS. </blockquote>Link: IPLYE 10-K form on Yahoo economics
Link: Full file on Pink Sheets
There's a lot of repeating known stuff in the filing, but here's some bits (with some high-lighting):<blockquote>As of April 1, 2004, we were three months in arrears on the rent obligations for our corporate lease in Irvine, California. On April 9, 2004, our lessor served us with a Three-Day Notice to Pay Rent or Surrender Possession. If we are unable to pay our rent, we may lose our office space, which would interrupt our operations and cause substantial harm to our business. We have received notice from the Internal Revenue Service ("IRS") that we owe approximately $70,000 in payroll tax penalties. We estimate that we owe an additional $10,000, which we have accrued in penalties for nonpayment of approximately $99,000 in Federal and State payroll taxes, which were due on March 31, 2004 and is still outstanding. We were unable to meet our April 15, 2004 payroll obligations to our employees. Our property, general liability, auto, workers compensation, fiduciary liability, and employment practices liability have been cancelled.
We are currently in default of the settlement agreement with Warner and have entered into a payment plan, of which we are in default, for the balance of the $0.32 million owed payable in one remaining installment. On or about February 23, 2004, we received correspondence from Atari Interactive alleging that Interplay had failed to pay royalties due under the D&D license as of February 15, 2004. If we are unable to cure this alleged breach of the license agreement, we may lose our remaining rights under the license, including the rights to continued distribution of BALDUR'S GATE: DARK ALLIANCE II. The loss of the remaining rights to distribute games created under the D&D license could have a significant negative impact on our future operating results.
In January 2004, Titus, our 71% majority shareholder, disclosed in their annual report for the fiscal year ended June 30, 2003, filed with the Autorite des Marches Financiers of France, that they were involved in a litigation with one of our former founders and officers and as a result had deposited pursuant to a California Court Order approximately 8,679,306 shares of our common stock held by them (representing approximately 9% of our issued and outstanding common stock) with the court. Also disclosed was that Titus was conducting settlement discussions at the time of the filing to resolve the issue. To date, Titus has maintained voting control over the 8,679,306 million shares of common stock and has not represented to us that a transfer of beneficial ownership has occurred. Nevertheless, such transfer of shares may occur in fiscal 2004.</blockquote> They report a net income over 2003 as 4%, compare to 34% for 2002 and a loss of 82% for 2001. They're income sources were 21% PC, 34% video game console and a whopping 45% OEM, royalty and licensing. But here's the big whopper under risk factors:<blockquote>WE CURRENTLY HAVE A NUMBER OF OBLIGATIONS THAT WE ARE UNABLE TO MEET WITHOUT GENERATING ADDITIONAL REVENUES OR RAISING ADDITIONAL CAPITAL. IF WE CANNOT GENERATE ADDITIONAL REVENUES OR RAISE ADDITIONAL CAPITAL IN THE NEAR FUTURE, WE MAY BECOME INSOLVENT AND/OR OUR STOCK WOULD BECOME ILLIQUID OR WORTHLESS.
(...)
WE HAVE A HISTORY OF LOSSES, AND MAY HAVE TO FURTHER REDUCE OUR COSTS BY CURTAILING FUTURE OPERATIONS TO CONTINUE AS A BUSINESS.
(...)
WE HAVE A LIMITED NUMBER OF KEY MANAGEMENT AND OTHER PERSONNEL. THE LOSS OF ANY SINGLE MEMBER OF MANAGEMENT OR KEY PERSON OR THE FAILURE TO HIRE AND INTEGRATE CAPABLE NEW KEY PERSONNEL COULD HARM OUR BUSINESS. </blockquote>Link: IPLYE 10-K form on Yahoo economics
Link: Full file on Pink Sheets
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