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SouthPeak Extends Credit Line To $8 Million
by Leigh Alexander [PC, Console/PC]
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February 22, 2010
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Two Worlds publisher SouthPeak has extended its credit line -- and the scope of its borrowing -- thanks to a new agreement with its lender, SunTrust Banks.
It's now extended the credit line through November 30, 2010, and increased the amount from $7.5 million to $8 million. The prior credit line had expired at the end of December, 2009, but the company's been enjoying a month-to-month extension since then.
"The loan extension improves our flexibility in managing our capital structure and provides added security for executing on our growth strategy," says SouthPeak president and CEO Melanie Mroz.
In SouthPeak's fiscal 2009, it reported a $12.1 million loss, money it says was well-spent investing in its growth, globalization and investment in new platforms. In recent years, SouthPeak acquired now-defunct publisher Gamecock, and the assets to bankrupt Midway's TNA wrestling franchise.
In its most recent fiscal quarter, the company credited its $2.6 million loss to a conservative release strategy for the crowded holiday quarter. It says this decision positions it well for the months ahead, when it looks forward to the launches of Dementium 2 and TNA Impact: Cross The Line for PSP and DS.
It also currently faces a lawsuit from Section 8 developer TimeGate Studios, which alleges withheld royalties and breach of contract. TimeGate filed suit at the end of 2009, and is seeking unspecified "compensatory damages". SouthPeak says its acquisition of original Section 8 publisher Gamecock exempts it from some specifics of the original agreement.
Says CEO Mroz: "We believe that securing this additional access to capital and improving the maturity terms puts us on track to address our independent auditor’s going concern qualification outlined in our most recent 10-Q filing."
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