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Playlogic Reports Losses, Uncertain About Future
by Kris Graft
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August 17, 2009
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Amsterdam-based Playlogic reported lower year-on-year sales for fiscal Q2 2009 and a quarterly net loss as the Obscure and Pool Hall Pro publisher said it is uncertain about its ability to continue business in the year ahead.
For the June quarter, Playlogic reported sales of $3.47 million, a decrease of 20 percent from the same quarter a year ago. Net loss for the period was $1.64 million, down from a profit of $344,057 for the comparable quarter a year prior.
For the six-month period, Playlogic reported total sales of $4.68 million, down 43 percent from a year ago. The publisher generated a net loss of $3.39 million, down from last year's $1.04 million profit for the first half.
As of June 30, Playlogic had an accumulated deficit of around $63.5 million, according to a regulatory filing. The most recent net losses and negative operating cash flows of $8 million "raise uncertainties about the Company’s ability to continue as a going concern."
Playlogic said that it does have contracts in place with developers for third-party games and "anticipates successful debuts of such titles," but noted uncertainty and volatility of the current hit-driven video game market that offers no guarantees.
The publisher also explained, "The Company anticipates future sales of equity securities to raise working capital to support and preserve the integrity of the corporate entity. However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company."
Playlogic said that if additional operating capital is not obtained in the next 12 months, it will have to rely on funds from management and/or "significant stockholders" to keep business afloat. Failing that, the publisher would have to shut down.
"While the Company is of the opinion that good faith estimates of the Company’s ability to secure additional capital in the future to reach the Company’s goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps," the publisher said.
Playlogic established a US office during Q2, an expansion that the publisher believes will help increase sales "substantially."
For the full fiscal year, Playlogic expects to make some headway, with sales of $30-$40 million, and a net profit of between $5.5 and $7.5 million.
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