Majesco Entertainment Company (COOL, Financial) filed Quarterly Report for the period ended 2009-04-30.
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 $63.61 million; its shares were traded at around $2.1 with and P/S ratio of 1.
Product Research and Development Expenses. Research and development expenses increased $0.7 million to $1.4 million for the three months ended April 30, 2009, from $0.7 million for the comparable period in 2008. The increase is primarily the result of expenses related to our development studio and approximately $0.2 paid to developers for the development of mobile games. During the three months ended April 30, 2008, substantially all of the work performed in the studio was allocated to capitalizable projects. During the three months ended April 30, 2009 no work was attributable to capitalizable projects. After evaluation of the studios performance, and changes in the availability and cost of development with our third party partners, we now believe that closing the studio and taking advantage of these external opportunities represents a better value for the Company. Therefore, we plan to reduce our personnel used for internal development during the three months ending July 31, 2009 and expect to incur approximately $0.2 million in severance and lease termination costs.
General and Administrative Expenses. For the three month period ended April 30, 2009, general and administrative expenses were $2.4 million, an increase of $0.4 million from $2.0 million in the comparable period in 2008. The increase is primarily due to a $0.3 million expense related to the write-off of capitalized software development costs and license fees for products that were cancelled prior to their commercial release. General and administrative expenses included $0.4 million of non-cash compensation expenses for the three months ended April 30, 2009 and 2008, respectively.
Product Research and Development Expenses. Research and development costs increased $1.1 million to $2.7 million for the six months ended April 30, 2009, from $1.6 million for the comparable period in 2008. The increase is primarily the result of expenses related to our development studio and approximately $0.2 paid to developers for the development of mobile games. During the six months ended April 30, 2009, substantially all of the work performed in the studio was allocated to non-capitalizable projects. After evaluation of the studios performance, and changes in the availability and cost of development with our third party partners, we now believe that closing the studio and taking advantage of these external opportunities represents a better value for the Company. Therefore, we plan to reduce our personnel used for internal development during the three months ending July 31, 2009 and expect to incur approximately $0.2 million in severance and lease termination costs Development costs for mobile games is recorded as research and development costs because we are currently evaluating opportunities in this market and no significant revenue contribution is expected from current projects.
General and Administrative Expenses. For the six months ended April 30, 2009, general and administrative expenses were $4.9 million, an increase of $0.8 million from $4.1 million in the comparable period in 2008. The increase is primarily due to higher compensation expenses relating to our incentive compensation program and $0.3 million expense related to the write-off of capitalized software development costs and license fees for products that were cancelled prior to their commercial release. This compensation program is primarily based on net income generated by the Company for the fiscal year. General and administrative expenses include $0.8 million of non-cash compensation expenses for the six months ended April 30, 2009 and 2008, respectively.
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 period ended April 30, 2009.
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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 $63.61 million; its shares were traded at around $2.1 with and P/S ratio of 1.
Highlight of Business Operations:
competitive products heighten pricing and competitive pressures. While management believes it can make reliable estimates regarding these matters, these estimates are inherently subjective. Accordingly, if our estimates change, this will result in a change in our reserves, which would impact the net revenues and/or selling and marketing expenses we report. We provided allowances for future price protection and other allowances of $0.5 and $1.1 million for the three and six month periods ended April 30, 2009, respectively, and $0.7 and $1.7 million for the three and six month periods ended April 30, 2008, respectively. The fluctuations in the provisions reflected our estimates of future price protection based on the factors discussed above. We limit our exposure to credit risk by factoring the majority of our receivables to a third party that generally buys our receivables without recourse.Product Research and Development Expenses. Research and development expenses increased $0.7 million to $1.4 million for the three months ended April 30, 2009, from $0.7 million for the comparable period in 2008. The increase is primarily the result of expenses related to our development studio and approximately $0.2 paid to developers for the development of mobile games. During the three months ended April 30, 2008, substantially all of the work performed in the studio was allocated to capitalizable projects. During the three months ended April 30, 2009 no work was attributable to capitalizable projects. After evaluation of the studios performance, and changes in the availability and cost of development with our third party partners, we now believe that closing the studio and taking advantage of these external opportunities represents a better value for the Company. Therefore, we plan to reduce our personnel used for internal development during the three months ending July 31, 2009 and expect to incur approximately $0.2 million in severance and lease termination costs.
General and Administrative Expenses. For the three month period ended April 30, 2009, general and administrative expenses were $2.4 million, an increase of $0.4 million from $2.0 million in the comparable period in 2008. The increase is primarily due to a $0.3 million expense related to the write-off of capitalized software development costs and license fees for products that were cancelled prior to their commercial release. General and administrative expenses included $0.4 million of non-cash compensation expenses for the three months ended April 30, 2009 and 2008, respectively.
Product Research and Development Expenses. Research and development costs increased $1.1 million to $2.7 million for the six months ended April 30, 2009, from $1.6 million for the comparable period in 2008. The increase is primarily the result of expenses related to our development studio and approximately $0.2 paid to developers for the development of mobile games. During the six months ended April 30, 2009, substantially all of the work performed in the studio was allocated to non-capitalizable projects. After evaluation of the studios performance, and changes in the availability and cost of development with our third party partners, we now believe that closing the studio and taking advantage of these external opportunities represents a better value for the Company. Therefore, we plan to reduce our personnel used for internal development during the three months ending July 31, 2009 and expect to incur approximately $0.2 million in severance and lease termination costs Development costs for mobile games is recorded as research and development costs because we are currently evaluating opportunities in this market and no significant revenue contribution is expected from current projects.
General and Administrative Expenses. For the six months ended April 30, 2009, general and administrative expenses were $4.9 million, an increase of $0.8 million from $4.1 million in the comparable period in 2008. The increase is primarily due to higher compensation expenses relating to our incentive compensation program and $0.3 million expense related to the write-off of capitalized software development costs and license fees for products that were cancelled prior to their commercial release. This compensation program is primarily based on net income generated by the Company for the fiscal year. General and administrative expenses include $0.8 million of non-cash compensation expenses for the six months ended April 30, 2009 and 2008, respectively.
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 period ended April 30, 2009.
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