Interplay has filed their 10-Q report with the SEC. There are a few interesting things to take note of, if you can get past all the numbers. I'll save the "big news" for the bottom of the post. First up, Interplay comments on the legal proceedings with Bethesda:
On September 8, 2009 Bethesda Softworks LLC filed a Complaint for
Declaratory Judgement, Preliminary Injunction and Other Relief against Interplay
Entertainment Corp. in the United States District Court for the District of
Maryland. On October 16, 2009, Interplay Entertainment Corp. ("Interplay")
answered the lawsuit and asserted Counter-Claims against Bethesda, including for
Breach of Contract, Declaratory Judgment, and other relief.
Bethesda seeks to cancel the April 4, 2007 trademark license agreement
that conditionally allows Interplay to use the FALLOUT (R) brand in conjunction
with its currently-in-production massively multiplayer online game. Bethesda
claims that Interplay failed to commence full scale development and to satisfy a
funding requirement within a specied time frame. Bethesda also seeks to
terminate Interplay's rights with respect to the previously released FALLOUT
(R), FALLOUT (R) 2, and FALLOUT(R) Tactics games. Interplay disputes these
claims. Although the potential damages are currently unknown, if Bethesda
ultimately prevails and cancels the trademark license agreement, Interplay could
lose its license to use the FALLOUT(R) brand with respect to its massively
multiplayer online game and/or its license to distribute the back catalog
FALLOUT(R) titles and may owe monetary damages.
Interplay's counter-suit alleges that Bethesda interfered with
Interplay's business, including distribution of the previously released FALLOUT
(R), FALLOUT(R) 2, and FALLOUT(R) Tactics games, by attempting to terminate
Interplay's distribution rights, among other acts. Interplay asks the Court to
decide whether Bethesda's attempt to terminate Interplay's rights under the
Asset Purchase Agreement results in nullification of the entire contract such
that the Parties should be returned to the status quo under their former
Exclusive Licensing Agreement. If the Exclusive Licensing Agreement is restored,
Bethesda may owe royalties based upon sales of its FALLOUT (R) 3 title.
Interplay also seeks a declaration from the Court that it has not infringed upon
the FALLOUT(R) mark and that it has satisfied the terms of theTrademark
Licensing Agreement related to Interplay's production of a massively-multiplayer
online game. A hearing on Bethesda's Motion for Preliminary Injunction is
currently set for December 11, 2009.
Also of interest is this bit about salaries, specifically Herve Caen's flagrantly large salary. Apparently, he wasn't actually paid this salary, but still:
The Company issued on October 2, 2006 to the following officer and
directors Herve Caen, Eric Caen and Michel Welter conditional demand notes which
have since become demand notes (due to the change in control resulting from
Financial Planning and Development SA's acquisition of approximately 56% of the
Company's outstanding stock) bearing a 5% annual interest rate. The demand notes
were issued for the earned but unpaid directors' fees to Herve Caen for $50,000,
to Eric Caen for $50,000, to Michel Welter for $85,000, and for earned but
unpaid salary to Herve Caen in the amount of $500,000. A total of $483,000 in
principal and interest remains outstanding under the demand notes and other
loans received from officers and directors as of September 30, 2009. Interest
accrued on the demand notes as of September 30, 2009 was $20,000.
Next, Interplay reveals that production of Project V13 has been underway since November 2007:
We have entered into a binding letter of intent with Masthead Studios to fund
the development of a Massively Multiplayer Online Game (MMOG), code named
"Project: V13." The game has been in design and development at Interplay since
November 2007. Masthead and Interplay teams are working together under the
direction and control of Interplay to complete development of the project. As a
part of the agreement, the game utilizes Masthead's proprietary tools and MMOG
technology developed for Masthead's MMO "Earthrise" project.
And the big news:
If we do not receive sufficient financing or income we may (i) liquidate assets,
(ii) sell the company (iii) seek protection from our creditors including the
filing of voluntary bankruptcy or being the subject of involuntary bankruptcy,
and/or (iv) continue operations, but incur material harm to our business,
operations or financial conditions. These conditions, combined with our
historical operating losses and our deficits in stockholders' equity and working
capital, raise substantial doubt about our ability to continue as a going
concern.
I really have no idea what the chances of Herve Caen selling the company are, or if it is just a formality to put that line in the filing, but it certainly is something to keep in mind.
If you really want, you can go to this page to read Interplay's whole filing. |
