Majesco Entertainment Company (COOL, Financial) filed Quarterly Report for the period ended 2009-01-31.
Majesco Entertainment Company is an innovative provider of digital entertainment products and content. The Company's three product lines include Games which includes highly anticipated titles such as Advent Rising and JAWS Unleashed; Videos which highlights the Company's platform-independent video compression technology; and Gadgets which includes innovative digital entertainment products like Frogger TV Arcade. Majesco Entertainment Company has a market cap of $34.6 million; its shares were traded at around $1.15 with and P/S ratio of 0.5.
General and Administrative Expenses. For the three month period ended January 31, 2009, general and administrative expenses were $2.5 million, an increase of $0.5 million from $2.0 million in the comparable period in 2008. The increase is primarily due to higher compensation expenses relating to our incentive bonus program. This bonus program is primarily based on net income generated by the Company. General and administrative expenses include $0.4 million of non-cash compensation expenses for the three months ended January 31, 2009 and 2008, respectively.
Interest and Financing Costs, Net. Interest and financing costs increased to $0.5 million for the three months ended January 31, 2009 from $0.2 million for the three months ended January 31, 2008. The increase of $0.3 million is the result of a higher percentage of our inventory purchases being financed through letters of credit and higher factoring fees related to sales volume.
In November 2008, we received proceeds of approximately $1.1 million from the sale of the rights to approximately $14.2 million of New Jersey state income tax net operating loss carryforwards, under the Technology Business Tax Certificate Program administered by the New Jersey Economic Development Authority. The amount represents utilization of approximately 34% of the $41.0 million of net operating loss carryforwards available to the Company in the State of New Jersey, prior to the transfer. The amount has been recorded as an income tax benefit during the quarter ending January 31, 2009.
During the twelve months ended October 31, 2007, we recorded a $2.8 million charge in connection with the expected settlement of the class action litigation, based on the terms of the original settlement. The charge is comprised of $2.5 million, representing the fair value, on the date the agreement was executed, of the common stock expected to be distributed when the settlement becomes effective and $0.3 million representing the increase in the value of the from that date to October 31, 2007. During the year ended October 31, 2008, we recorded a gain on litigation settlement of $0.3 million representing the decline in the value of the shares to be issued under the settlement, as if it occurred on October 31, 2008.
The estimated settlement liability was further adjusted as of October 31, 2008, to reflect the terms of the amended settlement agreement entered into on January 16, 2009. Accordingly, an additional gain on settlement of litigation of $1.3 million was recorded during the year ended October 31, 2008. The total estimated liability at October 31, 2008 is $1.3 million, comprised of the $0.7 million in cash payments, and $0.6 million representing 1.0 million shares of common stock at the closing market price of $0.55 at that date. The stock portion of the settlement was adjusted to a fair value of $0.7 million at January 31, 2009, reflecting the closing market price of $0.69 at that date. The value of the common stock on the date the shares are issued may be different than $0.69, resulting in further adjustment to the settlement liability.
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Majesco Entertainment Company is an innovative provider of digital entertainment products and content. The Company's three product lines include Games which includes highly anticipated titles such as Advent Rising and JAWS Unleashed; Videos which highlights the Company's platform-independent video compression technology; and Gadgets which includes innovative digital entertainment products like Frogger TV Arcade. Majesco Entertainment Company has a market cap of $34.6 million; its shares were traded at around $1.15 with and P/S ratio of 0.5.
Highlight of Business Operations:
Product Research and Development Expenses. Research and development costs increased $0.4 million to $1.3 million for the three months ended January 31, 2009, from $0.9 million for the comparable period in 2008. The increase is primarily the result of expenses related to our development studio. During the three months ended January 31, 2009 substantially all of the work performed in the studio was allocated to non-capitalizable projects. Additionally, approximately $0.1 million was expensed for a video game project that was terminated.General and Administrative Expenses. For the three month period ended January 31, 2009, general and administrative expenses were $2.5 million, an increase of $0.5 million from $2.0 million in the comparable period in 2008. The increase is primarily due to higher compensation expenses relating to our incentive bonus program. This bonus program is primarily based on net income generated by the Company. General and administrative expenses include $0.4 million of non-cash compensation expenses for the three months ended January 31, 2009 and 2008, respectively.
Interest and Financing Costs, Net. Interest and financing costs increased to $0.5 million for the three months ended January 31, 2009 from $0.2 million for the three months ended January 31, 2008. The increase of $0.3 million is the result of a higher percentage of our inventory purchases being financed through letters of credit and higher factoring fees related to sales volume.
In November 2008, we received proceeds of approximately $1.1 million from the sale of the rights to approximately $14.2 million of New Jersey state income tax net operating loss carryforwards, under the Technology Business Tax Certificate Program administered by the New Jersey Economic Development Authority. The amount represents utilization of approximately 34% of the $41.0 million of net operating loss carryforwards available to the Company in the State of New Jersey, prior to the transfer. The amount has been recorded as an income tax benefit during the quarter ending January 31, 2009.
During the twelve months ended October 31, 2007, we recorded a $2.8 million charge in connection with the expected settlement of the class action litigation, based on the terms of the original settlement. The charge is comprised of $2.5 million, representing the fair value, on the date the agreement was executed, of the common stock expected to be distributed when the settlement becomes effective and $0.3 million representing the increase in the value of the from that date to October 31, 2007. During the year ended October 31, 2008, we recorded a gain on litigation settlement of $0.3 million representing the decline in the value of the shares to be issued under the settlement, as if it occurred on October 31, 2008.
The estimated settlement liability was further adjusted as of October 31, 2008, to reflect the terms of the amended settlement agreement entered into on January 16, 2009. Accordingly, an additional gain on settlement of litigation of $1.3 million was recorded during the year ended October 31, 2008. The total estimated liability at October 31, 2008 is $1.3 million, comprised of the $0.7 million in cash payments, and $0.6 million representing 1.0 million shares of common stock at the closing market price of $0.55 at that date. The stock portion of the settlement was adjusted to a fair value of $0.7 million at January 31, 2009, reflecting the closing market price of $0.69 at that date. The value of the common stock on the date the shares are issued may be different than $0.69, resulting in further adjustment to the settlement liability.
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