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By James Fudge
Game peripheral company Mad Catz is downplaying a recent admission to investors and in financial documents that the future of the company is in question. At the end of last month Mad Catz warned investors and government filings that it did not meet the requirements of a milestone set by creditor Wells Fargo. The company was supposed to hit a certain number of sales for the month and failed to do so.
This should have caused Wells Fargo to call in the loan, but the lender decided instead to give Mad Catz a break and sign a new agreement that extended into July 31, 2016. Mad Catz, who is co-publishing Rock Band 4 with Harmonix, said last month that it requires "significant contributions from anticipated sales of products related to the Rock Band 4 video game."
The company told investors that uncertainty surrounding Rock Band 4's sales and other factors, "raise substantial doubt about the company’s ability to continue as a going concern."
But in a conversation with Game Informer, Mad Catz CFO Karen McGinnis said that "unequivocal language in financial documents" is necessary and that the company's future is a bit more upbeat than the somber words laid out to investors. The company also revealed to the publication that it has secured $20 million in loans, which could increase to $35 million from September in order to ship Rock Band 4.
We'll continue to follow this story as it develops.
Full disclosure: the author of this story worked for a Mad Catz-owned publication from 2002 - 2007.
Source: GameSpot
Game peripheral company Mad Catz is downplaying a recent admission to investors and in financial documents that the future of the company is in question. At the end of last month Mad Catz warned investors and government filings that it did not meet the requirements of a milestone set by creditor Wells Fargo. The company was supposed to hit a certain number of sales for the month and failed to do so.
This should have caused Wells Fargo to call in the loan, but the lender decided instead to give Mad Catz a break and sign a new agreement that extended into July 31, 2016. Mad Catz, who is co-publishing Rock Band 4 with Harmonix, said last month that it requires "significant contributions from anticipated sales of products related to the Rock Band 4 video game."
The company told investors that uncertainty surrounding Rock Band 4's sales and other factors, "raise substantial doubt about the company’s ability to continue as a going concern."
But in a conversation with Game Informer, Mad Catz CFO Karen McGinnis said that "unequivocal language in financial documents" is necessary and that the company's future is a bit more upbeat than the somber words laid out to investors. The company also revealed to the publication that it has secured $20 million in loans, which could increase to $35 million from September in order to ship Rock Band 4.
We'll continue to follow this story as it develops.
Full disclosure: the author of this story worked for a Mad Catz-owned publication from 2002 - 2007.
Source: GameSpot
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