A new SEC filing from struggling game publisher and Fallout Online developer Interplay highlights a dire financial situation that could lead the company to cease operations if new financing is not secured in the near future.
A lack of available credit caused Interplay's cash-on-hand to dwindle to $3,000 at the end of 2010, the filing states, as the company accumulated operating deficits of over $2.8 million over the past few years.
That number includes roughly $239,000 in promised compensation that has not been paid to the company's board of directors, $410,000 in unpaid federal taxes and penalties since 2008, and over $80,000 in unpaid California state taxes, the filing states.
The publisher's financial status puts future releases in jeopardy, most notably an embattled Fallout MMO, the rights to which Interplay licensed from Bethesda Softworks.
"We currently have some obligations that we are unable to meet without generating additional income or raising additional capital," the company warned stockholders. "If we cannot generate additional income or raise additional capital in the near future, we may become insolvent and/or be made bankrupt and/or may become illiquid or worthless."
Interplay said it may have to further cut back on its staff of 11 people, including 7 developers, or sell other assets if new financing can't be found.
The company seems to be pinning its hopes of financial survival on licensing out owned properties, with the filing noting new entries in the Battlechess, Clayfighter, Dark Alliance, Descent, Earthworm Jim, MDK2 and Stonekeep franchises that are out for "production or pre-production" with various game studios.
The company continues work on the Fallout MMO code-named "Project: V13," which has been in development since late 2007, and has plans to enter the 3DS and Facebook spaces in the future, according to the document.
Interplay also warned of continuing risk from an ongoing legal complaint filed by Bethesda Softworks over the company's right to publish a Fallout MMO.
I wish someone would buy Interplay, and start making games on their IP, or better yet, invest in the company. Too many great games came from Interplay back in the day, and I would love to see new games on those franchises.
Why would you want to buy all that debt? Just wait for them to be forced into filing bankruptcy and buy the Earthworm Jim IP for $10 at some obscure, unadvertised, shady government auction.
(Did you see what I just did?!)
The idea is so stupid that it is genius.
Maybe interplay should sell shares at GLBSE, I am sure lots of people would buy it.