Interplay Posts First Profitable Quarter Since 2000, But Future Looks Uncertain

For the first quarter ended March 31, 2002, the company reported net income of $1.5 million, (2 cents per share), compared to a net loss of $8.4 million (30 cents per share), in the same period last year. Net revenues were down 9%, to $15.4 million. The company also announced it has applied to be moved to the Nasdaq SmallCap market. In accordance with its February 15 deficiency notice from Nasdaq, Interplay acknowledged it has not met, among other Nasdaq requirements, the minimum bid price of $1. Despite the positive news, and the recent sale of Shiny to Infogrames for $47 million, the company's future is far from secure. According to its lastest 10-Q form filed with the SEC, as of March 31, 2002, the company's cash balance was $61,000 and its outstanding accounts payable and current debt totaled $54 million. The company stated that even with the proceeds from Shiny's sale, it will need to raise additional financing. If not, the company said it may have to liquidate assets, declare bankruptcy. As a result, Interplay is aggressively trying to raise capital. On April 26, 2002, the company sold to Titus (its majority shareholder) all rights, title and interest in Shiny's games EarthWorm Jim, Messiah, Wild 9, R/C Stunt Copter, Sacrifice, MDK, MDK II, and Kingpin, and Titus licensed the rights to develop, publish, manufacture and distribute the games Hunter I, Hunter II, Icewind Dale I, Icewind Dale II, and BG: Dark Alliance II for Game Boy Advance. Titus bought all these licenses for a total of $3.5 million.