Interplay has filed yet another belated 10-K, this time for Q1 2005, which means they're more or less up to date on their filing, if not on other things:<blockquote>As of March 31, 2005, we had a working capital deficit of approximately $18 million, and our cash balance was approximately $.04 million. We currently have no cash reserves and are unable to pay current liabilities. We cannot continue in our current form without obtaining additional financing or income.
On April 16, 2004, Arden Realty, our landlord filed an unlawful detainer action against us alleging unpaid rent of approximately $432,000. We were unable to pay our rent, and vacated the office space during the month of June 2004. On June 3, 2004, our Landlord obtained a judgment of approximately $588,000 exclusive of interest. We also owe an additional approximately $148,000 on a prior settlement with the Landlord. We negotiated a forbearance agreement whereby Arden has agreed to accept payments commencing in January 2005 in the amount of $60,000 per month until the full amount is paid. We are currently in default of this agreement.
We have received notice from the Internal Revenue Service ("IRS") that we owe approximately $117,000 in payroll tax penalties for late payment of payroll taxes in the 3rd and 4th quarters of 2003 and the 1st and 2nd quarters of 2004. Such amount has been accrued at December 31, 2004. We have received notice from the California Employment Development Department that we owe payroll taxes and penalties of approximately $101,000. We have received notice from the State Board of Equalization that we owe approximately $64,000 in State Use Tax. We have also received notice from the Orange County Treasurer that we owe approximately $28,000 in property taxes. Such amounts have been accrued at March 31, 2005.
We were unable to meet certain 2004 payroll obligations to our employees as a result several employees filed claims with the State of California Labor Board ("Labor Board"). The Labor Board has fined us approximately $10,000 for failure to meet our payroll obligations and set trial dates for August 2005.
Since we were having difficulty meeting our payroll obligations on a timely basis to our employees a large number of our employees stopped reporting to work in late May and early June 2004. We were subsequently evicted from our building at 16815 Von Karman Avenue in Irvine, California in mid June 2004. We had a core group of approximately 5 employees on payroll on March 31, 2005. All employees have not been paid for the period August through December 31, 2004. Since we have been unable to pay the employees we have continuing liability to them.
Our property, general liability, auto, fiduciary liability, workers compensation, directors and officers, and employment practices liability insurance policies, have been cancelled. We obtained a new workers' compensation insurance policy. The Labor Board fined us approximately $79,000 for not having worker's compensation coverage for a period of time. Our health insurance was also cancelled but was subsequently reinstated. We are appealing the Labor Board fines.
We entered into tri-party agreements with Atari Interactive, Inc. and Vivendi and Avalon that allows Vivendi to resume North American distribution, and Avalon to resume International distribution pursuant to their pre-existing agreements with us of certain Dungeons & Dragons games, including BALDUR'S GATE: DARK ALLIANCE II. Vivendi has paid Atari approximately $853,000 as of March 31, 2005.
(...)
Additionally, we have reduced our fixed overhead commitments, and cancelled or suspended development on future titles which management believes do not meet sufficient projected profit margins, and scaled back certain marketing programs associated with the cancelled projects. Management will continue to pursue various alternatives to improve future operating results.
(...)
Our operating activities generated cash of $.014 million during the three months ended March 31, 2005.
(...)
Currently there is no internal development of new titles going on.</blockquote>Also, according to the report, Titus owes Interplay 365 thousand dollars and Avalon slightly more than 2 million, of which debts they reasonably expect to recieve 20 thousand dollars. So far, for Q1 2005, Interplay's net revenue has been $793,000, most of which from outside North America (88%) and most of which on console games (77%). Subtract their costs and their total loss over Q1 2005 comes to $216,000
The bit about cancelling future development might refer to Ballerium, which was however not cancelled by March the 31st and which is not mentioned by name a single time throughout the report. So how much money has Interplay put in that lost effort? Former Interplay employee Corith puts it at $675,000, which is more than half the money Caen got for Fallout 3. Interesting is that in the 10-K report, the biggest contractual agreement amounts mentioned are Developer License Commitments, their dues to external developers, set at 4.7 million total. Meanwhile rumours of fraud are circulating more and more around the Raging Bull stock-holder's forum as they consider suing Caen for whatever he's worth. I have to wonder who those "approximately 5 employees" still remaining are, though...
Link: Interplay 10-K over Q1 2005 on SEC.gov
On April 16, 2004, Arden Realty, our landlord filed an unlawful detainer action against us alleging unpaid rent of approximately $432,000. We were unable to pay our rent, and vacated the office space during the month of June 2004. On June 3, 2004, our Landlord obtained a judgment of approximately $588,000 exclusive of interest. We also owe an additional approximately $148,000 on a prior settlement with the Landlord. We negotiated a forbearance agreement whereby Arden has agreed to accept payments commencing in January 2005 in the amount of $60,000 per month until the full amount is paid. We are currently in default of this agreement.
We have received notice from the Internal Revenue Service ("IRS") that we owe approximately $117,000 in payroll tax penalties for late payment of payroll taxes in the 3rd and 4th quarters of 2003 and the 1st and 2nd quarters of 2004. Such amount has been accrued at December 31, 2004. We have received notice from the California Employment Development Department that we owe payroll taxes and penalties of approximately $101,000. We have received notice from the State Board of Equalization that we owe approximately $64,000 in State Use Tax. We have also received notice from the Orange County Treasurer that we owe approximately $28,000 in property taxes. Such amounts have been accrued at March 31, 2005.
We were unable to meet certain 2004 payroll obligations to our employees as a result several employees filed claims with the State of California Labor Board ("Labor Board"). The Labor Board has fined us approximately $10,000 for failure to meet our payroll obligations and set trial dates for August 2005.
Since we were having difficulty meeting our payroll obligations on a timely basis to our employees a large number of our employees stopped reporting to work in late May and early June 2004. We were subsequently evicted from our building at 16815 Von Karman Avenue in Irvine, California in mid June 2004. We had a core group of approximately 5 employees on payroll on March 31, 2005. All employees have not been paid for the period August through December 31, 2004. Since we have been unable to pay the employees we have continuing liability to them.
Our property, general liability, auto, fiduciary liability, workers compensation, directors and officers, and employment practices liability insurance policies, have been cancelled. We obtained a new workers' compensation insurance policy. The Labor Board fined us approximately $79,000 for not having worker's compensation coverage for a period of time. Our health insurance was also cancelled but was subsequently reinstated. We are appealing the Labor Board fines.
We entered into tri-party agreements with Atari Interactive, Inc. and Vivendi and Avalon that allows Vivendi to resume North American distribution, and Avalon to resume International distribution pursuant to their pre-existing agreements with us of certain Dungeons & Dragons games, including BALDUR'S GATE: DARK ALLIANCE II. Vivendi has paid Atari approximately $853,000 as of March 31, 2005.
(...)
Additionally, we have reduced our fixed overhead commitments, and cancelled or suspended development on future titles which management believes do not meet sufficient projected profit margins, and scaled back certain marketing programs associated with the cancelled projects. Management will continue to pursue various alternatives to improve future operating results.
(...)
Our operating activities generated cash of $.014 million during the three months ended March 31, 2005.
(...)
Currently there is no internal development of new titles going on.</blockquote>Also, according to the report, Titus owes Interplay 365 thousand dollars and Avalon slightly more than 2 million, of which debts they reasonably expect to recieve 20 thousand dollars. So far, for Q1 2005, Interplay's net revenue has been $793,000, most of which from outside North America (88%) and most of which on console games (77%). Subtract their costs and their total loss over Q1 2005 comes to $216,000
The bit about cancelling future development might refer to Ballerium, which was however not cancelled by March the 31st and which is not mentioned by name a single time throughout the report. So how much money has Interplay put in that lost effort? Former Interplay employee Corith puts it at $675,000, which is more than half the money Caen got for Fallout 3. Interesting is that in the 10-K report, the biggest contractual agreement amounts mentioned are Developer License Commitments, their dues to external developers, set at 4.7 million total. Meanwhile rumours of fraud are circulating more and more around the Raging Bull stock-holder's forum as they consider suing Caen for whatever he's worth. I have to wonder who those "approximately 5 employees" still remaining are, though...
Link: Interplay 10-K over Q1 2005 on SEC.gov
