SouthPeak, publisher of Two Worlds
, secured a $10 million line of asset-based credit through February 28, 2012 from financial services firm Rosenthal & Rosenthal, the company said this week.
The new line of credit can increase up to an additional $3 million if SouthPeak's stockholders' equity increases. It will replace SouthPeak's previous $8 million revolving credit line
from SunTrust Banks.
"Securing this additional credit provides us with greater financial flexibility and presents a clear message to our investors that we are confident of our business prospects and growth opportunities over the near- and long-term,” said SouthPeak chairman Terry Phillips.
Phillips added, "We continue to execute on our growth strategy to introduce new games that build our extensive portfolio. Our popular titles provide us with a significant opportunity to enhance our portfolio as well as enter new high-growth categories and expand our digital reach to further increase our brand equity."
SouthPeak said that it repaid its full credit line to SunTrust, partly through "a pledge of personal securities and assets by two company shareholders," including Phillips.
The publisher's most recent quarterly filing from May said that SouthPeak received a review report from an independent auditor who expressed "doubt regarding [SouthPeak's] ability to continue as a going concern," which means there is doubt the company can avoid liquidation for the foreseeable future.
Management said at the time that it is confident it can implement a plan to keep SouthPeak afloat, a plan that includes a focus on cost and debt reduction.