FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of September, 2005
Commission File Number: 0-23696
RADICA GAMES LIMITED
(Translation of registrant's name into English)
Suite V, 6/F., 2-12 Au Pui Wan Street, Fo Tan, Hong Kong
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or 40-F
Form 20-F X Form 40-F
------ ------
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1): ______
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7): ______
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No X
------ ------
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- _________________
Contents:
1. Quarterly Report for the Quarter Ended June 30, 2005
2. Press Release dated September 13, 2005
This Report on Form 6-K shall be deemed to be incorporated by reference
into the Registrant's Registration Statements on Form S-8 (No. 33-86960, No.
333-7000, No. 333-59737, 333-61260 and 333-122248) and on Form F-3 (No. 333-7526
and No. 333-79005).
QUARTERLY REPORT *
For the quarterly period ended June 30, 2005
Commission File Number 0-23696
RADICA GAMES LIMITED
(Exact name of registrant as specified in charter)
Bermuda N/A
(Country of Incorporation) (I.R.S. Employer Identification No.)
Suite V, 6/F., 2-12 Au Pui Wan Street, Fo Tan, Hong Kong
(Address of principal executive offices)
Registrant's telephone number, including area code: (852) 2693 2238
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at June 30, 2005
--------------------------------------- ----------------------------
Common Stock, par value $0.01 per share 19,023,645
------------------------
* As a foreign private issuer, the registrant is not required to file reports on
Form 10-Q. It intends to make voluntary quarterly reports to its stockholders
which generally follow the Form 10-Q format. Such reports, of which this is one,
are furnished to the Commission pursuant to Form 6-K.
2
RADICA GAMES LIMITED
INDEX TO QUARTERLY REPORT ON FORM 6-K
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2005
ITEMS IN FORM 6-K
Page
PART I - FINANCIAL INFORMATION.................................................4
Item 1. Financial Statements...............................................4
Condensed Consolidated Balance Sheets
June 30, 2005 (unaudited) and December 31, 2004....................4
Condensed Consolidated Statements of Operations
for the Three Months and Six Months Ended June 30, 2005
(unaudited) and 2004 (unaudited)...................................5
Condensed Consolidated Statements of Shareholders' Equity
for the Six Months Ended June 30, 2005 (unaudited) and
2004 (unaudited)...................................................6
Condensed Consolidated Statement of Cash Flows
for the Six Months Ended June 30, 2005 (unaudited)
and 2004 (unaudited)...............................................7
Notes To The Condensed Consolidated Financial Statements...........8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.........................................14
Item 3. Quantitative and Qualitative Disclosures about Market Risk........17
Item 4. Controls and Procedures...........................................17
PART II - OTHER INFORMATION...................................................18
Item 1. Legal Proceedings.................................................18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.......18
Item 3. Defaults Upon Senior Securities...................................18
Item 4. Submission of Matters to a Vote of Security Holders...............18
Item 5. Other Information.................................................18
Item 6. Exhibits..........................................................18
3
PART I - FINANCIAL INFORMATION
Item 1. Financial Information.
RADICA GAMES LIMITED
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2005 AND DECEMBER 31, 2004
(US dollars in thousands, except share data) June 30, December 31,
------------ ------------
2005 2004
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 21,145 $ 27,614
Investment securities 9,857 12,456
Accounts receivable, net of allowances for doubtful accounts
of $131 ($148 as at December 31, 2004) 16,709 18,359
Inventories 39,097 26,818
Prepaid expenses and other current assets 5,055 3,374
Income taxes receivable 23 168
Deferred income taxes 2,027 1,850
------------ ------------
Total current assets 93,913 90,639
Property, plant and equipment, net 14,340 11,480
Goodwill - 6,015
Other assets 843 854
Deferred income taxes, noncurrent 1,013 953
------------ ------------
Total assets $ 110,109 $ 109,941
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 15,479 $ 10,770
Accrued warranty expenses 700 1,070
Accrued payroll and employee benefits 1,415 1,486
Other accrued liabilities 5,712 5,251
Income taxes payable 136 287
------------ ------------
Total current liabilities 23,442 18,864
------------ ------------
Total liabilities 23,442 18,864
------------ ------------
Shareholders' equity:
Common stock
par value $0.01 each, 100,000,000 shares authorized, 19,023,645 shares
outstanding (18,738,112 as at December 31, 2004) 190 187
Additional paid-in capital 5,861 4,610
Retained earnings 81,265 85,909
Deferred compensation (356) -
Accumulated other comprehensive (loss) income (293) 371
------------ ------------
Total shareholders' equity 86,667 91,077
------------ ------------
Total liabilities and shareholders' equity $ 110,109 $ 109,941
============ ============
See accompanying notes to the consolidated financial statements.
4
RADICA GAMES LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2005 AND 2004
Three months ended June 30, Six months ended June 30,
(US dollars in thousands, --------------------------- -------------------------
except per share data) 2005 2004 2005 2004
------------ ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues:
Net sales 31,131 18,799 53,605 30,924
Cost of goods sold
(exclusive of items shown separately below) (21,659) (12,647) (35,417) (19,632)
------------ ----------- ----------- -----------
Gross profit 9,472 6,152 18,188 11,292
------------ ----------- ----------- -----------
Operating expenses:
Selling, general and administrative expenses (6,032) (5,206) (12,691) (10,195)
Research and development (892) (869) (2,089) (1,798)
Depreciation and amortization (458) (429) (862) (850)
Impairment of goodwill (6,015) - (6,015) -
------------ ----------- ----------- -----------
Total operating expenses (13,397) (6,504) (21,657) (12,843)
Operating loss (3,925) (352) (3,469) (1,551)
Net interest and other income 226 187 445 418
Foreign currency gain (loss), net 14 72 (11) 44
------------ ----------- ----------- -----------
Loss before income taxes (3,685) (93) (3,035) (1,089)
Income tax benefit 248 264 93 148
------------ ----------- ----------- -----------
Net (loss) profit $ (3,437) $ 171 $ (2,942) $ (941)
============ =========== =========== ===========
Net (loss) profit per share:
Basic $ (0.18) $ 0.01 $ (0.16) $ (0.05)
============ =========== =========== ===========
Diluted (0.18) 0.01 (0.16) (0.05)
============ =========== =========== ===========
Weighted average number of common and
common equivalent shares:
Basic 19,005,208 18,620,108 18,932,945 18,595,387
============ =========== =========== ===========
Diluted 19,005,208 19,499,899 18,932,945 18,595,387
============ =========== =========== ===========
Cash dividends declared per share
(4.5 cents declared and paid for each quarter
ended March 31 and June 30, 2005; 4 cents per
quarter in 2004) $ 0.045 $ 0.040 $ 0.090 $ 0.080
============ =========== =========== ===========
See accompanying notes to the consolidated financial statements.
5
RADICA GAMES LIMITED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME (LOSS)
SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(US dollars in thousands)
Common stock Accumulated
------------ Additional other Total
Number paid-in Deferred Retained comprehensive shareholders'
of shares Amount capital compensation earnings income (loss) equity
---------- -------- --------- ------------ -------- ------------- -------------
Balance at December 31, 2004 18,738,112 $ 187 $ 4,610 $ -- $ 85,909 $ 371 $ 91,077
Issuance of stock 46,499 1 392 (393) -- -- --
Stock options exercised 239,034 2 859 -- -- -- 861
Amortization of unearned
restricted shares -- -- -- 37 -- -- 37
Dividends declared -- -- -- -- (1,702) -- (1,702)
Net loss -- -- -- -- (2,942) -- (2,942)
Unrealized loss on investment
securities available-for-sale,
net of nil tax -- -- -- -- -- (7) (7)
Foreign currency translation,
net of nil tax -- -- -- -- -- (657) (657)
---------- ---------- ---------- ----------- -------- ----------- ----------
Balance at June 30, 2005 19,023,645 $ 190 $ 5,861 $ (356) $ 81,265 $ (293) $ 86,667
========== ========== ========== =========== ======== =========== ==========
Balance at December 31, 2003 18,225,204 182 3,517 -- 85,437 20 89,156
Issuance of stock 1,156 -- 11 -- -- -- 11
Stock options exercised 399,868 4 781 -- -- -- 785
Dividends declared -- -- -- -- (2,235) -- (2,235)
Net loss -- -- -- -- (941) -- (941)
Unrealized loss on investment
securities available-for-sale,
net of nil tax -- -- -- -- -- (121) (121)
Foreign currency translation,
net of nil tax -- -- -- -- -- (20) (20)
---------- ---------- ---------- ----------- -------- ----------- ----------
Balance at June 30, 2004 18,626,228 $ 186 $ 4,309 $ -- $ 82,261 $ (121) $ 86,635
========== ========== ========== =========== ======== =========== ==========
The comprehensive loss of the Company, which represents the aggregate of the net loss, unrealized loss on investment securities
available-for-sale and the foreign currency translation adjustments, was $(3,606) and $(1,082) for the six months ended June 30,
2005 and 2004.
See accompanying notes to the consolidated financial statements.
6
RADICA GAMES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(US dollars in thousands)
2005 2004
----------- -----------
(unaudited) (unaudited)
Cash flow from operating activities:
Net loss $ (2,942) $ (941)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Deferred income taxes (237) 307
Depreciation 862 850
Impairment of goodwill 6,015 -
Gain on disposal of property, plant and equipment (54) -
Compensatory elements of stock issuances 37 11
Proceeds from sale of trading securities 2,616 1,500
Realized gain on trading securities (24) -
Unrealized gain on trading securities - (56)
Changes in current assets and liabilities:
Decrease in accounts receivable 1,650 6,301
Increase in inventories (12,279) (11,145)
Increase in prepaid expenses and other current assets (1,681) (2,477)
Increase in accounts payable 4,709 5,015
Decrease in accrued payroll and employee benefits (71) (76)
Decrease in accrued warranty expenses (370) (540)
Increase (decrease) in other accrued liabilities 461 (782)
(Decrease) increase in net income taxes payable (6) 138
----------- -----------
Net cash used in operating activities (1,314) (1,895)
----------- -----------
Cash flow from investing activities:
Proceeds from sale of property, plant and equipment 55 222
Purchase of property, plant and equipment (3,712) (1,583)
----------- -----------
Net cash (used in) provided by investing activities (3,657) (1,361)
----------- -----------
Cash flow from financing activities:
Proceeds from stock options exercised 861 785
Dividends paid (1,702) (1,487)
----------- -----------
Net cash used in financing activities (841) (702)
Effect of currency exchange rate change (657) (20)
----------- -----------
Net decrease in cash and cash equivalents (6,469) (3,978)
Cash and cash equivalents:
Beginning of period 27,614 13,944
----------- -----------
End of period $ 21,145 $ 9,966
=========== ===========
See accompanying notes to the consolidated financial statements.
7
RADICA GAMES LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2005)
(US dollars in thousands)
1. BASIS OF PRESENTATION
FINANCIAL STATEMENT PRESENTATION
The condensed consolidated financial statements of Radica Games Limited
(the "Company" or "Radica") have been prepared in accordance with generally
accepted accounting principles in the United States for interim financial
information and the rules and regulations of the Securities and Exchange
Commission (the "SEC"). Certain information and footnote disclosures
normally included in the financial statements prepared in accordance with
generally accepted accounting principles in the United States have been
condensed or omitted pursuant to such rules and regulations. The
accompanying condensed consolidated financial statements contain all normal
and recurring adjustments which, in the opinion of management, are
necessary to present fairly the financial position of the Company as of
June 30, 2005, and its results of operations and cash flows for the periods
presented herein. These unaudited condensed consolidated financial
statements should be read in conjunction with the Company's Annual Report
on Form 20-F for the year ended December 31, 2004.
Because the Company's business is seasonal, revenues, expenses, assets and
liabilities can vary during each quarter of the year. Accordingly, the
operating results and trends in these unaudited condensed consolidated
interim financial statements are not necessarily indicative of future
results that may be expected for any other interim period or the full year.
The preparation of financial statements in conformity with generally
accepted accounting principles in the United States requires management to
make estimates and assumptions that affect reported amounts of certain
assets, liabilities, revenues and expenses and the disclosure of contingent
assets and liabilities as of and during the reporting periods. Significant
items subject to such estimates and assumptions include the carrying amount
of goodwill, property, plant and equipment, valuation allowances for
receivables and deferred income tax assets and provisions for product
returns and warranties, as well as in estimates used in accounting for
legal contingencies. Actual results could differ from the estimated
results. Changes from those estimates are recorded in the period they
become known.
ACCOUNTING FOR STOCK BASED COMPENSATION
The Company elected to follow Opinion No. 25, Accounting for Stock Issued
to Employees, and related interpretations including Financial Accounting
Standards Board (FASB) Interpretation No. 44, Accounting for Certain
Transactions involving Stock Compensation, an interpretation of APB Opinion
No. 25, issued in March 2000, to account for its fixed-plan stock options.
Under this method, compensation expense is recorded on the date of grant
only if the then market price of the underlying stock exceeded the exercise
price. SFAS No. 123, Accounting for Stock-based Compensation, established
accounting and disclosure requirements using a fair-value-based method of
accounting for stock-based employee compensation plans. As allowed by SFAS
No. 123, the Company has elected to continue to apply the
intrinsic-value-based method of accounting described above, and has adopted
only the disclosure requirements of SFAS No. 123. The following table
illustrates the incremental effect on net income if the fair value based
method had been applied to all outstanding and unvested awards in the
period:
8
RADICA GAMES LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2005)
(US dollars in thousands except per share data)
1. BASIS OF PRESENTATION (CONTINUED)
Three months ended June 30, Six months ended June 30,
-------------------------- ---------------------------
2005 2004 2005 2004
---------- ---------- --------- ---------
Net income (loss) as reported $ (3,437) $ 171 $ (2,942) $ (941)
Deduct total stock-based employee
compensation expense determined
under fair-value-based method
for all rewards, net of tax (171) (124) (302) (250)
---------- ---------- --------- ---------
Pro forma net income (loss) $ (3,608) $ 47 $ (3,244) $ (1,191)
========== ========== ========= =========
Reported net income (loss) per share $ (0.18) $ 0.01 $ (0.16) $ (0.05)
========== ========== ========= =========
Pro forma net income (loss) per share $ (0.19) $ -- $ (0.17) $ (0.06)
========== ========== ========= =========
In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based
Payment. The new pronouncement replaces the existing requirements under
SFAS No. 123 and APB 25. According to SFAS No. 123(R), all forms of
share-based payments to employees, including employee stock options and
employee stock purchase plans, would be treated the same as any other form
of compensation by recognizing the related cost in the statement of
operations. This pronouncement eliminates the ability to account for
stock-based compensation transactions using APB No. 25 and generally would
require that such transactions be accounted for using a fair-value based
method. SFAS 123R is effective for all interim and annual periods beginning
after June 15, 2005. In April 2005, the United States Securities and
Exchange Commission issued a new rule that a public company may elect to
adopt the provisions of SFAS 123R at the beginning of their first annual
period beginning after June 15, 2005. Consequently, the Company is
evaluating when it will adopt SFAS 123R and is in the process of evaluating
the impact of this standard on its financial statements. The pro forma
results disclosed above are not necessarily indicative of what the impact
of SFAS 123R will be upon adoption.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In November 2004, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 151, Inventory Costs
-- An Amendment of ARB No. 43, Chapter 4 ("SFAS 151"). SFAS 151 clarifies
that abnormal amounts of idle facility expense, freight, handling costs and
spoilage should be expensed as incurred and not included in inventory cost
as a component of overhead. Further, SFAS 151 requires that allocation of
fixed and production facilities overhead to conversion costs should be
based on normal capacity of the production facilities. The provisions in
SFAS 151 are effective for inventory costs incurred during fiscal years
beginning after June 15, 2005. The Company does not believe that the
adoption of SFAS 151 will have a significant effect on its consolidated
financial statements.
In November 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary
Assets -- An Amendment of APB Opinion No. 29 ("SFAS 153"). The provisions
of this statement are effective for non monetary asset exchanges occurring
in fiscal periods beginning after June 15, 2005. This statement eliminates
the exception to fair value for exchanges of similar productive assets and
replaces it with a general exception for exchange transactions that do not
have commercial substance -- that is, transactions that are not expected to
result in significant changes in the cash flows of the reporting entity.
The Company does not believe that the adoption of SFAS 153 will have a
significant effect on its financial statements.
9
RADICA GAMES LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2005)
(US dollars in thousands except per share data)
1. BASIS OF PRESENTATION (CONTINUED)
RECLASSIFICATIONS
Certain reclassifications have been made to prior year amounts to conform
to the current year's presentation. These reclassifications had no effect
on net profit or shareholders' equity.
2. NET (LOSS) PROFIT PER SHARE
Basic net (loss) profit per share is based on the weighted average number
of shares of common stock, and with respect to diluted net profit per
share, also includes the effect of all dilutive potential common stock
outstanding. Dilutive potential common stock results from dilutive stock
options and warrants. The effect of such dilutive potential common stock on
net profit per share is computed using the treasury stock method. Dilutive
potential common stock has no effect on net loss per share as the effect
would be anti-dilutive.
The following table sets forth the computations of net (loss) profit per
share:
Three months ended June 30, Six months ended June 30,
------------------------------- ---------------------------------
2005 2004 2005 2004
------------ ----------- ------------ ------------
Numerator for basic and
diluted net profit per share:
Net (loss) profit $ (3,437) $ 171 $ (2,942) $ (941)
============ =========== ============ ============
Denominator:
Basic weighted average shares 19,005,208 18,620,108 18,932,945 18,595,387
Effect of dilutive options -- 879,791 -- --
------------ ----------- ------------ ------------
Diluted weighted average shares 19,005,208 19,499,899 18,932,945 18,595,387
============ =========== ============ ============
Basic net (loss) profit per share: $ (0.18) $ 0.01 $ (0.16) $ (0.05)
============ =========== ============ ============
Diluted net (loss) profit per share: $ (0.18) $ 0.01 $ (0.16) $ (0.05)
============ =========== ============ ============
3. SEGMENT INFORMATION
The Company is a worldwide designer, producer and marketer of electronic
entertainment devices. The Company historically had two reportable segments
from which it derives its revenues: the Game and Youth Electronics business
that sells product under the Company's Radica(R), Play TV(R) and Girl
Tech(R) brand names, and the Video Game Accessory ("VGA") business that
sells product under the Company's Gamester(R) brand name. During the period
ended June 30, 2005 the Games and Youth Electronics business represented
over 90% of the consolidated revenue, profits, and assets. The Company no
longer views the video game accessory business as a separate segment for
either internal reporting purposes or for making decisions about resource
allocation. Accordingly, as of and for the quarter and six-month period
ended June 30, 2005, the Company has only one reportable segment.
10
RADICA GAMES LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2005)
(US dollars in thousands)
4. GOODWILL
On June 24, 1999, the Company purchased Leda Media Products Limited, now
called Radica UK Limited ("Radica UK") for approximately $15,970. During
the quarter ended June 30, 2000, upon claiming certain breaches of warranty
at Radica UK, the Company and the ex-shareholders of Radica UK mutually
agreed to cancel certain loan notes such that the purchase price was
reduced by $1,399. As a result, the Company recorded the excess of net
assets purchased (goodwill) of approximately $12,069 resulting from the
adjusted purchase price. The goodwill was allocated to the Video Games
Accessories reporting unit and is not tax deductible.
Effective January 1, 2002, the Company adopted SFAS No. 142, Goodwill and
Other Intangible Assets. Upon implementation of SFAS 142, and quarterly
thereafter, the Company has tested to determine whether the goodwill was
impaired and the extent of such impairment.
For the year ended December 31, 2004, the methods used in the Company's
testing of goodwill impairment were as follows: The Company determined the
fair market value of the VGA segment by estimating the expected discounted
future cash flows of the VGA reporting unit. In estimating the discounted
future cash flows, the Company followed FASB Concepts Statement No. 7,
Using Cash Flow Information and Present Value in Accounting Measurements,
by taking into account the Company's expectations about possible variations
in the amount or timing of those cash flows, the risk-free rate of interest
and the discounted interest rate. The Company then compared the estimated
fair value of the VGA reporting unit with the carrying value of the VGA
reporting unit, including goodwill. Because the fair value of the VGA
reporting unit was less than the carrying value, the second step was
performed which compared the implied fair value of the VGA reporting unit's
goodwill to the book value of the goodwill. After performing this
evaluation for the year ended December 31, 2004, the Company recognized a
goodwill impairment of $3,536. The adjustment was the result of a lower
sales forecast for fiscal years 2005 through 2009 which was largely
predicated by the Company's newly adopted strategy of concentrating on the
innovative, higher margin sector of the market.
At December 31, 2004 the Company's goodwill was $6,015 net of the
impairment charge of $3,536 recorded during the 4th quarter of 2004 and
accumulated amortization of $2,518 which was charged to operating expenses
prior to the adoption of SFAS No. 142.
In 2005, Microsoft announced the introduction of its new platform,
Xbox360(TM), for distribution in Fall 2005. Shortly thereafter, Sony
announced the introduction of its new Playstation(R) platform for
distribution sometime in 2006. These announcements have created uncertainty
in the marketplace concerning existing video game platforms and have
resulted in reduced orders of the Company's VGA products. In addition,
initial placement of the Company's Black Diamond(TM) line of products for
the Sony PSP(TM) has been less than originally forecasted. As of year end
2004 the introduction dates of the Xbox and Playstation platforms were not
known and the Company had not yet shown its Black Diamond line of Sony PSP
products to retail customers. As a result, the goodwill impairment analysis
as of December 31, 2004 showed an implied goodwill value of $6,015. The
occurrence of these events and change in circumstances indicated that it is
more likely than not that the fair value of the VGA reporting unit is below
its carrying amount. Accordingly, as required by SFAS No. 142, the Company
performed a goodwill impairment analysis during the quarter ended June 30,
2005. The analysis indicated that the carrying value of the reporting
unit's goodwill exceeds the implied fair value of the goodwill resulting in
an impairment loss of $6,015 recognized during the quarter. After this
impairment charge, the goodwill related to the VGA reporting unit was
reduced to zero.
11
RADICA GAMES LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2005)
(US dollars in thousands)
5. INVENTORIES
Inventories by major category consists of the following:
June 30, December 31,
2005 2004
----------- -----------
Raw materials $ 6,464 $ 4,017
Work in progress 14,079 6,830
Finished goods 18,554 15,971
----------- -----------
$ 39,097 $ 26,818
=========== ===========
6. PROPERTY, PLANT AND EQUIPMENT
Property and Plant and Equipment consists of the following:
June 30, December 31,
2005 2004
------------- ------------
Land and buildings $ 9,413 $ 9,431
Plant and machinery 10,021 8,142
Furniture and equipment 8,479 8,196
Leasehold improvements 3,274 3,067
Construction-in-progress 998 265
------------- ------------
Total $ 32,185 $ 29,101
Less accumulated depreciation
and amortization (17,845) (17,621)
------------- ------------
Total, net $ 14,340 $ 11,480
============= ============
7. OTHER ACCRUED LIABILITIES
Other accrued liabilities consist of the following:
June 30, December 31,
2005 2004
------------ ------------
Accrued advertising expenses $ 945 $ 910
Accrued license and royalty fees 1,549 1,963
Commissions payable 66 93
Other accrued liabilities 3,152 2,285
------------ ------------
Total $ 5,712 $ 5,251
============ ============
12
RADICA GAMES LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2005)
(US dollars in thousands)
8. PLEDGE OF ASSETS
At June 30, 2005, the Company had general banking facilities including
overdraft and trade facilities totaling $3,796 available to be drawn upon.
The facilities were collateralized by leasehold land and buildings and bank
balances with an aggregate net book value of $2,562.
9. LITIGATION
On April 4, 2000 a lawsuit was filed by the Lemelson Foundation
("Lemelson") against the Company in Arizona Court for patent infringement.
Lemelson claims to be owner of nearly 800 issued and pending patents,
including the patent on Machine Vision and Automatic Identification (Auto
ID) operations. The Auto ID operation is used in machines that are part of
the Company's bonding and heat-sealing manufacturing processes. Lemelson is
contesting that the use of machines that incorporate this patented
technology infringes on their intellectual property ("IP") rights and
therefore the Company is obligated to pay a royalty based on the use of
this technology. The suit by Lemelson has been stayed pending the outcome
of Lemelson vs. Cognex, a similar suit filed by Lemelson, which will have
some bearing on the Radica case with Lemelson. On January 23, 2004 a
declaratory judgment was given in the Cognex case that the Lemelson's
patent claims are invalid. If this judgment is upheld following appeal, the
Company believes that this result is favorable to the Company's defense of
the Lemelson lawsuit. On June 29, 2004, Lemelson filed its notice of appeal
to the Court of Appeals for the Federal Circuit. In early 2005, the parties
completed briefing for the appeal and a hearing was held before the United
States Court of Appeals for the Federal Circuit on June 8, 2005. A decision
from the Court is expected before the end of the year.
In March 2005 the Company received a letter from a third party (AtGames
Holdings Ltd., or AtGames) challenging the exclusivity of the Company's
manufacturing, vendor and distributor agreement with Sega Toys, which was
represented to give us exclusive rights to the Play TV Sega Genesis games
in the United States and certain other countries. Subsequently, the Company
has worked closely with Sega Toys and Sega Corporation in an attempt to
clarify our rights. The Company continues to believe that it has a strong
position on the merits of the dispute as well as certain rights to
indemnification from Sega Toys. Sega Corporation has advised the Company in
writing that Sega has not granted AtGames any right to license Sega's
Genesis/Mega Drive game titles for incorporation in TV game pads intended
for worldwide markets. AtGames contends otherwise. Sega and AtGames have
submitted their dispute to arbitration, and the arbitration hearing is
currently scheduled to begin in November 2005. Sega further stated its
understanding that under the agreement between Radica and Sega Toys, Sega
Toys has granted Radica the exclusive right to sell Play TV products
incorporating selected Sega Genesis game titles in the United States and
certain other territories under a license granted by Sega to Sega Toys.
On June 13, 2005, AtGames filed a complaint against Radica Games Limited
and its subsidiary Radica (Macao Commercial Offshore) Limited, or Radica
Macao, in the California Superior Court, County of Los Angeles, alleging
intentional interference with contract and unfair competition. The
complaint seeks substantial compensatory damages, punitive damages,
declaratory relief and injunctive relief. The Company considers this suit
to be without merit and intends to defend against it vigorously. As part of
this defense, the Company has removed the case to the Federal District
Court, Central District of California, and has filed a motion to stay
pending the outcome of the arbitration discussed above between Sega and
AtGames, and a special motion to strike. AtGames has filed a motion to
remand the case to the California Superior Court. These motions are
expected to be considered by the court in September 2005.
In addition, and supplemental to two prior indemnification demands, the
Company has made formal demand on Sega Toys for indemnification respecting
the action filed by AtGames.
The Company cannot predict the outcome of the Lemelson and AtGames cases or
the effect of such litigation on the financial results of the Company. No
accrual has been recorded at June 30, 2005 and December 31, 2004 in respect
of the Lemelson and AtGames cases or other claims or legal actions, in
accordance with SFAS No. 5 Accounting for Contingencies. Management does
not believe that the ultimate disposition of the other matters will have a
material
13
adverse effect on the Company's consolidated financial position, results of
operations or liquidity.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the attached
financial statements and notes thereto, and with the audited financial
statements, accounting policies and notes included in the Company's Annual
Report on Form 20-F for the year ended December 31, 2004, as filed with the
United States Securities and Exchange Commission.
DESCRIPTION OF BUSINESS
Founded in 1983 by Americans living in Hong Kong, Radica Games Limited (NASDAQ:
RADA) was incorporated in Bermuda in 1993. We are headquartered in Hong Kong and
manufacture most of our products in our factory in southern China. In 1994 we
went public when our shares began trading on the Nasdaq National Market.
We manufacture and market a diverse line of electronic entertainment products
covering multiple product lines - our products include casino and heritage
electronic games, mechanical slot banks, youth electronic games, tabletop games,
Play TV(R) games, Girl Tech(R) and Barbie(TM) girls electronic lines, the
20Q(TM) line of electronic and tabletop games, the Cupcakes(R) doll line, the
Nitro Battlerz(TM) remote control car product, the Street Muttz(TM) plush line
and video game accessories sold under the Gamester(R) brand. Our factory also
manufactures for other companies in the electronic game industry. We market our
products through subsidiaries in the United States, the United Kingdom, Canada,
Macau and Hong Kong. Our largest market is in the United States where in 2004 we
had the third largest market share in the electronic handheld and tabletop
electronic games according to industry data source, The NPD Group, Inc.
RESULTS OF OPERATIONS
The following table sets forth items from our Consolidated Statements of
Operations as a percentage of net sales:
Three months ended June 30,
-----------------------------
2005 2004
-------- --------
Net sales 100.0% 100.0%
Cost of goods sold (69.6%) (67.3%)
Gross margin 30.4% 32.7%
Selling, general and administrative expenses (19.4%) (27.7%)
Research and development (2.9%) (4.6%)
Depreciation and amortization (1.4%) (2.3%)
Impairment of goodwill (19.3%) 0.0%
Operating loss (12.6%) (1.9%)
Net interest and other income 0.7% 1.0%
Foreign currency gain, net 0.1% 0.4%
Loss before income taxes (11.8%) (0.5%)
Income tax benefit 0.8% 1.4%
Net (loss) profit (11.0%) 0.9%
We reported a net loss for the second quarter of 2005 of ($3.4) million or
($0.18) per diluted share compared to a net profit of $0.2 million or $0.01 per
diluted share in the second quarter of 2004.
14
Summary of sales achieved from each category of products and services:
Three months ended June 30,
---------------------------------------------------------------------
2005 2004
-------------------------------- -------------------------------
% of Net Net % of Net Net
Product Lines Sales Value Sales Value Sales Value Sales Value
--------------------------------- ----------- ----------- ----------- -----------
(US dollars in thousands)
Electronic Games 73.8% $ 22,990 58.8% $ 11,059
Youth Electronics 10.0% 3,104 15.2% 2,848
Other Electronic Toys 2.1% 648 3.0% 565
Video Game Accessories 5.9% 1,847 10.7% 2,016
Manufacturing Services 8.2% 2,542 12.3% 2,311
----------- ----------- ----------- -----------
Total 100.0% $ 31,131 100.0% $ 18,799
=========== =========== =========== ===========
Sales for the second quarter increased by 66% to $31.1 million from $18.8
million in the quarter ended June 30, 2004 due mainly to the continued success
of the 20Q(TM) product line but also due to increases in all product lines
except Video Game Accessories ("VGA"). Compared to the sales for the same period
in 2004, Radica branded sales (excluding Manufacturing Services) grew by 73%,
with U.S. branded sales increasing by 47%, European sales increasing by 174% and
Other International sales increasing by 106%. Manufacturing services grew by
10%.
Gross profit margin for the second quarter of 2005 was 30.4% compared to 32.7%
in the second quarter of 2004. This decrease in gross margin was due to
provisions taken against inventories during the quarter amounting to $1.5
million without which, the gross margin for the quarter would have been 35.1%.
Of these provisions, $1.0 million were related to the VGA line.
During the first half of 2005, both Microsoft and Sony announced the
introduction of replacement platforms for their Xbox(TM) and Playstation(R)
products. The new Xbox product, Xbox 360(TM), is scheduled to begin shipping in
Fall of 2005 and the new Playstation platform is slated for a 2006 introduction.
This has created significant uncertainty in the market that has resulted in
reduced orders of our VGA products for the existing platforms. Microsoft is
allowing approved vendors to enter into a licensing agreement that will give
manufacturers the right to purchase chips that will make their video game
accessories compatible with the new platform. However, we are unclear as to the
potential accessory needs of the new platform or the potential market for the
platform. We are in the process of negotiating a licensing agreement with
Microsoft to sell video game accessories for Xbox 360(TM) but several key points
of the agreement are unresolved and there is no assurance that we will enter
into the agreement. To date, we are not aware that Sony has made licensing
opportunities available to video game accessory manufacturers and we have no
evidence that leads us to believe they will do so. Additionally, they could
create security features around the platform that would prevent us from creating
and manufacturing product for the platform. During 2005, we introduced our new
Black Diamond(TM) line of products for the Sony PSP(TM) platform. To date,
placement of this product at retail has been less than originally forecasted and
we are doubtful that we will be able to make up this shortfall by year-end.
As a result of these uncertainties and the adverse change in business climate,
we conducted a goodwill impairment analysis as of the quarter ended June 30,
2005 and recorded an impairment charge of $6.0 million related to the remaining
goodwill associated with our VGA product line, Gamester(R). Operating expenses
increased to $13.4 million for the quarter from $6.5 million in the second
quarter of 2004. The increase was due to the effect of the $6.0 million non-cash
impairment charge against goodwill, increased advertising, commissions (related
to higher sales) and staff salaries offset by decreased promotional expenses.
15
The following table shows the major operating expenses:
Three months ended June 30,
-----------------------------
(US dollars in thousands) 2005 2004
--------- --------
Advertising expenses $ 630 $ 404
Other selling and promotion expenses 797 793
Indirect salaries and bonus 2,399 2,083
Other general & administrative expenses 2,207 1,926
Research and development expenses 891 869
Depreciation and amortization 459 429
Impairment of goodwill 6,015 -
LIQUIDITY AND CAPITAL RESOURCES
Our cash and investment securities totaled $31.0 million at June 30, 2005 as
compared to $40.1 million at December 31, 2004. The $9.1 million decrease was
due to a variety of factors, including a dividend payment ($1.7 million), the
purchase of property plant and equipment ($3.7 million), mainly in connection
with the previously announced factory expansion and cash used for operating
activities ($4.6 million), caused primarily by seasonal increases in inventories
and decreases in accounts payable and accrued expenses, offset by a decrease in
accounts receivable. These decreases were partially offset by proceeds from
stock options exercised during the quarter ($0.9 million). In April 2005, we
purchased $9.0 million of Chinese Renminbi ("RMB"), which is on deposit at HSBC
in China. The Chinese Government recently revalued its currency, the Renminbi,
by approximately 2.1%. As a result of the deposit, management believes the
revaluation will not have a significant impact on the results of operations in
2005 as the foreign exchange gain on the RMB deposit will substantially offset
the increase in operating costs resulting from the revaluation.
Our accounts receivable were $16.7 million at June 30, 2005 as compared to $18.4
million at December 31, 2004. Inventories increased to $39.1 million from $26.8
million at December 31, 2004. Our business is inherently seasonal. Normally our
sales have been lowest during the first and second quarters and highest during
the third and fourth quarters. Receivables have been lowest during the
succeeding first and second quarters. The decrease in accounts receivable
related primarily to the decrease in sales in the second quarter of 2005
compared to the fourth quarter of 2004. The inventory increase from December 31,
2004 was primarily due to a company initiative to accelerate annual production
of certain staple electronic games and toys, primarily from our 20Q(TM) and
Heritage lines, in order to free factory capacity during the peak production
period of summer and early fall to avoid the overcapacity issues that were
experienced in 2004. Such seasonal changes in assets and liabilities are typical
for the toy industry and should partially reverse by year-end.
Current liabilities were $23.4 million at June 30, 2005, up $4.5 million from
the $18.9 million reported at December 31, 2004. This was due to an increase in
payables. There was no debt at June 30, 2005 and December 31, 2004.
At June 30, 2005, we had net assets of $86.7 million compared with $91.1 million
at December 31, 2004. We had no derivative instruments or off-balance sheet
financing activities during the quarter ended June 30, 2005. We believe that our
existing cash, investment securities and credit lines are sufficient to meet
future short-term cash demands, including seasonal build up of inventory. We
fund our operations and liquidity needs primarily through cash flow from
operations, as well as utilizing borrowings under secured and unsecured credit
facilities when needed. During 2005, we expect to continue to fund our working
capital needs through operations and the revolving credit facility and we
believe that the funds are available to
16
meet our needs. However, unforeseen circumstances such as severe softness in, or
a collapse of, the retail environment may result in a significant decline in
revenues and operating results, thereby causing us to exhaust our cash
resources. If this were to occur, we may be required to seek alternative
financing of working capital.
On January 4, April 12 and July 7, 2005, we declared first, second and third
quarter dividends each of 4.5 cents per share which were paid on January 31,
April 29 and July 29, 2005, respectively.
CRITICAL ACCOUNTING POLICIES
For a discussion of our critical accounting policies, see "Item 5, operating and
financial review and prospects" in our 2004 Form 20-F.
RECENTLY ISSUED ACCOUNTING STANDARDS
A discussion of certain recently issued accounting standards and the estimated
impact on us is set out in note 1 to the condensed consolidated financial
statements.
RISK FACTORS
For a discussion of our risk factors, see "Item 3. Key Information - Risk
Factors" and "Item 5. Operating and Financial Review and Prospects" in our 2004
Form 20-F, and the Form 6-K filings on June 15, 2005 and August 16, 2005.
FORWARD-LOOKING STATEMENTS AND CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS
(CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995)
Certain written and oral statements made or incorporated by reference from time
to time by us or our representatives in this Form 6-K, other filings or reports
filed with the Securities and Exchange Commission, press releases, conferences,
or otherwise, contain certain "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. You can identify these forward-looking statements by the
fact they use words such as "should", "expect", "anticipate", "estimate", "may",
"will", "project", "guidance", "intend", "plan", "believe" and other words and
terms of similar meaning and expression in connection with any discussion of
future operating or financial performance. One can also identify forward-looking
statements by the fact that they do not relate strictly to historical or current
facts. Such forward-looking statements are based on current expectations and
involve inherent risks and uncertainties, including factors that could delay,
divert or change any of them, or depend on the outcome of contingencies such as
legal proceedings. Management cautions you that forward-looking statements
involve risks and uncertainties that may cause actual results to differ
materially from the forward-looking statements. For a more complete discussion
of our risk factors, you are referred to the sections in our Form 20-F and Form
6-K identified above under the caption "Risk Factors". The forward-looking
statements made in this Form 6-K speak only as of the date on which the
statements are made.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The market risk disclosures have not materially changed from those
appearing in our 2004 Form 20-F (see Item 11).
ITEM 4. CONTROLS AND PROCEDURES
Not Applicable.
17
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See Note 8 to the accompanying Financial Statements.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There were no unregistered sales of equity securities in the quarterly
period covered by this report, except that, as disclosed in the Company's
filings under the Securities Exchange Act of 1934, the Company permits any
outside director to elect to receive some or all of the applicable director fees
payable in shares of the Company's Common Stock valued at the then current
market price. Such issuances are exempt from registration pursuant to Section
4(2) under the Securities Act of 1933, as being issuances not involving any
public offering. In the quarter ended June 30, 2005, the Company issued an
aggregate of 299 shares to outside directors in lieu of an aggregate of $2,619
of fees that would otherwise have been paid to such directors in cash. No
underwriters were involved in such transactions.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None.
Item 6. Exhibits
None.
Supplemental Information:
As previously disclosed in our Form 6-K filing on August 16, 2005, Jon Bengtson,
the Chairman of the Board of Radica Games, entered into a Rule 10b5-1 preset
diversification program on July 6, 2005.
Rule 10b5-1 of the Securities Exchange Act of 1934 allows officers and directors
to adopt written plans for trading the Company's securities in a
non-discretionary, pre-scheduled manner in order to avoid concerns about
initiating stock transactions when the insider may be aware of non-public
information.
During the term of the trading plan, acting on behalf of a family trust, Mr.
Bengtson intends to sell up to 100,000 shares, and the trading plan will
terminate when such shares are sold, or in any event by June 30, 2006.
18
SIGNATURE
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
RADICA GAMES LIMITED
Date: September 13, 2005 /s/ Craig D. Storey
------------------- ----------------------------
Craig D. Storey
Chief Accounting Officer
19
RADICA(R) GAMES LIMITED & 20Q.NET(TM) INC
ANNOUNCE PARTNERSHIP WITH I-PLAY(TM)
TO BRING 20Q(TM) TO MOBILE PHONES
FOR IMMEDIATE RELEASE CONTACT: PATRICK S. FEELY
SEPTEMBER 13, 2005 CHIEF EXECUTIVE OFFICER
(LOS ANGELES, CALIFORNIA)
(626) 744 1150
DAVID C.W. HOWELL
PRESIDENT ASIA OPERATIONS
& CFO
(HONG KONG)
(852) 2688 4201
(HONG KONG) September 13, 2005 - Radica(R) Games Limited (NASDAQ: RADA) and
20Q.net(TM) Inc. today announced they have negotiated a strategic partnership
with I-play(TM), the mobile games company, to bring the popularity of the
handheld 20Q(TM) game and its artificial intelligence to mobile phones.
"The mobile, wireless and digital entertainment market continues to grow at a
fast pace," said Pat Feely, Radica's CEO. "Our partnership with I-play opens the
door to potential new 20Q consumers, yet offers existing fans an additional
platform to play this addictive game."
"20Q appeals to people of all ages and continues to baffle those who play it,"
said David Gosen, COO, I-play. "It's a perfect fit for our mobile games."
The partnership will enable mobile phone customers around the world to try their
hand at stumping the artificial intelligence of the all-knowing 20Q. Just like
the handheld game, the mobile version will challenge players to think of an
animal, vegetable, mineral or other item, and will then guess the object of the
player's mind within twenty questions.
"I-play has a tremendous reputation in the casual gaming category, delivering
the highest quality games to the widest possible audience," said Robin Burgener,
inventor and CEO of 20Q.net. "It's exciting to see 20Q in a new role, enabling
more people to experience the game's artificial intelligence."
20Q.net Inc. and I-play will collaborate and tailor the online version of the
game to mobile devices. The mobile 20Q game will be available on cellular phones
at the end of the year in the United States.
This is the first third-party licensing agreement for the 20Q brand.
Brandgenuity, a full-service licensing agency, assisted Radica and 20Q.net Inc.
in negotiating the partnership with I-play and manages the 20Q licensing
program.
The foregoing discussion contains forward-looking statements that involve
risks and uncertainties that could cause actual results to differ
materially from projected results. Forward-looking statements include
statements about efforts to attract or prospects for additional or
increased business, new product introductions and other statements of a
non-historical nature. Actual results may differ from projected results due
to various Risk Factors, including Risks of Manufacturing in China,
Dependence on Product Appeal and New Product Introductions, and Dependence
on Major Customers, as set forth in the Company's Annual Report on Form
20-F for the fiscal year ended December 31, 2004, as filed with the
Securities and Exchange Commission. See "Item 3. Key Information -- Risk
Factors" in such report on Form 20-F.
ABOUT RADICA GAMES LIMITED
Radica Games Limited (Radica) is a Bermuda company headquartered in Hong Kong
(NASDAQ: RADA). Radica is a leading developer, manufacturer and distributor of a
diverse line of electronic entertainment products including electronic games,
youth electronics, video game accessories and high-tech toys. Radica has
subsidiaries in the U.S.A., Canada and the U.K., and a factory in Dongguan,
Southern China. More information about Radica can be found on the Internet at
www.radicagames.com.
ABOUT 20Q
What is 20Q? 20Q is an AI, a website, a company and a phenomenon. Start with the
quintessential word game, "20 questions," then add an incredible artificial
intelligence (AI) algorithm and a website, and you've got a winning update of an
old parlor-game classic for the 21st Century. Found on the internet at
http://20Q.com and http://20Q.net, and rated in Alexa's top 2800 sites, the 20Q
AI has evolved from an experiment in artificial intelligence into a software
development firm, licensing products built on the capabilities of the 20Q AI.
The technology has applications in business, education, behavioral targeting,
mobile entertainment and games. It's the AI with extreme stability. 20Q's
clients include Radica Games Ltd., RTL interactive GmbH, Burger King
Corporation, and Bandai Co. Ltd. Awards include an Oppenheim Platinum Toy Award,
Good Housekeeping Seal of Approval, and the Canadian Toy Testing Council's Toy
of the Year Award. 20Q is a registered trademark of 20Q.net Inc.
ABOUT I-PLAY
I-play, the mobile games company, brings the best in mobile entertainment to a
mobile gaming audience of over 600 million people via mobile operators, retail
stores and online portals, including http://www.iplay.com/. I-play has been
creating mobile games since 1998 and continues to spearhead the creation of
games for the next generation. As one of the world's longest established and
respected creators of mobile games, the I-play brand stands for quality and the
best in mobile game development. Working with the best media and entertainment
brands, I-play is 100% focused on mobile games, and dedicated to fulfilling the
promise of the mobile phone as the first truly mass-market electronic games
platform.
I-play's investors are Apax Partners and Argo Global Capital. I-play is
headquartered in London, with European Regional HQ in Dunfermline, Scotland and
North American Regional HQ in San Mateo, California as well as sales offices in
Paris, Munich, Madrid, Rome, New York, Fairfax, Sao Paulo and Singapore.
For more information, please call +44 (0) 20 7901 1760 or visit
http://www.iplay.com/ I-play is a trademark and trading name of Digital Bridges
Limited.
ABOUT BRANDGENUITY LLC
Brandgenuity LLC, an independent boutique trademark licensing agency based in
New York, provides turnkey licensing services to owners of famous trademarks.
The agency's four principals, Jay Asher, Adina Avery-Grossman, Louis Drogin and
Andrew Topkins, have more than 50 years of combined licensing and marketing
experience. Brandgenuity agency services include strategic licensing planning,
prospecting, negotiation, licensee management and program administration.
Brandgenuity's clients include Snapple(R), Yoohoo(R), Mott's(R), World Poker
Tour(R) LeapFrog (R),This Old House(R), Sports Illustrated(R), French's
Mustard(R), Frank's RedHot(R) and Meow Mix(R).
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