MindArk: Semi-Annual Report Jan - Jun 2013

how did you miss the part about Toulon being launched in December?

 

CLD land grab? Wassathen?

As for Toulan, of course we will SEE if that happens in December ,-)

 

What castle did they sell?

 

=D "no loot yellow"

 

They should make a model of it and sell it in Entropia =D

 

Pardon if this sounds naive; was MA using the castle as office space?

 

It might have been an investment Arch, and they might have wanted to use it as office space, but the whole thing didn't work out too well. I think the guys have more information about this one than I do.

It would look nice a deep, royal purple with black trim to give it an edge.

 

Also not an accountant but if I understand you right, (possibly not) your "uh oh" is about the fact that there appears to be ~ 33 million in real assets and 73million worth of ped? So if everyone wanted to withdraw they couldn't.

If I understood you right (probably not) this doesn't actually concern me. I think the odds of more than half of those ped's being withdrawn suddenly are fairly low. Actually the ratio is massively high compared to the real life banks on which we all rely for our cash. I seem to remember banks are backed by didly squat these days. (Look up a documentary called 97% owned -

)

I don't think the sky is falling... yet

Wistrel

 

First of all, when you are going too judge if a company are going to be able "to pay their bills", you should look which type of assets could be converted to money easy and in a short time. Normally this kind of assets is:
1. Cash and bank holdings
2. Receivables (assets that normally will be converted to cash within 1-2 month)

If we look at the balance sheet in the report for the Group, we can see that they have 6035 ksek in cash/bank and 10 491 ksek in receivable assets, totally 16 526 ksek. This kind of assets is also called "current assets", assets that can be converted to cash within a year.

The other types of assets is more difficult to sell or convert to money. Intangible assets 11 168 ksek, is the value of the gaming platform/EU software so that will not be much of help in paying the bills.

Second, we must look at the liabilities, and the greatest attention on the short-term liabilities. Short-term liabilities is liabilities that the company must pay within one year, and a big part of them probably within one-two month. The short-term liabilities are 14 052 ksek.

Third step, what is the difference between the "current assets" and "short-term" liabilities? In this case
16 526 ksek - 14 052 ksek= +2 474 ksek "surplus". But the player holdings are 73 261 ksek. Maybe you start to see the "problem" if the players want to withdraw their money......

MA normally are financing the players withdrawals with the money other players are depositing, but if you see the operating profit, that is the loss of -6 231ksek for six month, you see the second component of the problem. They don't make any profit/money from the game, they are loosing money, make the situation even worse because they need to finance a loosing business. So i'm not surprised if withdrawals are taking a bit longer.

At the same time, the income statement is not as bad is you think when you first look at it.
Why not?

1. Some of the cost are depreciation on intangible assets, around 3 000 ksek. That cost will not cause any cash outflow, just a lower value on the intangible assets. And when the intangible assets reach a value of 0, this cost will disappear. (if they don't add more of them)

2. We know they took a lose from the estate sell in Germany, around 4 000 ksek

So if we remove this two items of total 7 000 ksek, from the 6 231 ksek loss, the core business actually had a small profit, even if it was small.

 

So if I read that right, to summarise there is about ~2000k freely available with which to finance withdrawals of which there could be a potential (but very unlikely) maximum of ~70000k. However the company are loosing around 1000k a month. This is largely attributable to liquidating assets at a loss though so in the future the company may start to turn a profit again.

Conclusion, the company is essentially holding its head above the water with plenty of potential for growth if cards are played correctly. If everyone decided to with draw though they could bring the whole shooting match down like a house of cards. This is however is unlikely.

Wistrel

 

That's why it think it's more than a "work load problem", MA know if they withdrawals start to "fail" it will be a huge problem for the whole concept. If it's only was a temporary work load problem they should av fixed it by now I my opitnion. So probably a cash problem, hopefully it's temporary. But this only enlightens a problem I have pointed out before, MA don't have our peds as liabilities and put away them on a bank account. A stable RCE economy should have done that.

Also, the SEE settlement have obviosly created some cash problem, from the semi annual report:
"Cash Flow and Liquid Assets. The cash flow balance has been greatly affected by the installment payments to SEE Digital Studios and SEE Virtual Worlds. The last installment will take place in October 2013"