December 28, 2005
Phantom Announces Lapboard, Reveals Financial Problems
Infinium Labs CEO and President Greg Koler has announced that the company will be launching the Phantom Lapboard, a bespoke wireless keyboard and mouse designed specifically for PC gamers, in Q2 of 2006, in lieu of a release for its much-vaunted Phantom PC 'game console'.
The Lapboard will include a 360-degree rotating keyboard for either left- or right-handed players, and under the keyboard is the lapboard for the mouse that allows gamers to play from their armchairs - within a 30-foot radius of their PC.
However, Infinium's Koler also made a statement in the press release which seems to indicate that funding is not yet in place to launch the Phantom Lapboard, let alone the Phantom console itself, commenting: "The required $USD 2 million round of funding for the Phantom Lapboard is a necessary step to deliver our vision for our products and services quickly into the market, positioned for both consumer and OEM segments, and book revenues by June 2006."
In fact, the company's recently re-issued 10-QSB/A financial report, following the resignation of most recent CEO Kevin Bachus, reveals a parlous state of affairs for Infinium. Firstly, in a little-reported move, Infinium filed documents with the SEC on October 28, 2005, restating its interim financial results for late 2003, 2004, and 2005, due to "misclassifying employees as independent contractors in the fourth quarter of 2003 and the first quarter of 2004", and a failure to record loss contingencies relating to withholding and payroll tax obligations, among other issues.
Secondly, and starting in April 2005, the company seems to have started defaulting on its short-term loans. Up to April, it had managed to pay off its loans by converting them to Infinium shares, which were hovering above 10 cents each, but with the current Infinium share price at 2.3 cents, it can no longer do this. Thus, April 2005 loans of $300,000 and $200,000, and June loans of $68,000 and $100,000 are all in default, with more recent loans not yet listed.
Regarding the Phantom itself, Infinium has contracted Biostar to create the Phantom Game Receiver mainboard and graphics adapter, with costs including a $156,000 initial payment and eventual payments of nearly $312,000. However, the company notes in the 'risk' area of its filing: "We have engaged third parties to assist with product engineering and design work. Due to working capital shortages, efforts by these groups on our behalf have been delayed. At June 30, 2005, the Company owed Biostar and Walter Dorwin Teague Associates, two of such firms, $311,532 and $46,769, respectively, which amounts continue to be outstanding." Infinium also revealed that it is technically in default on all of its major game licensing agreements for the Phantom console, with a Riverdeep license that included a $225,000 advance, a Codemasters license with a $50,000 advance, an Atari license with a $500,000 advance and an Eidos license with a $125,000 advance all partially or wholly unpaid. In addition, the company appears to owe the IRS around $2.35 million in payroll taxes and penalties, as of June 30.
As a note accompanying the financial documents explains: "As reflected in the accompanying financial statements, the Company is in the development stage with no sales and has recurring losses from inception of $57,570,723, has a working capital deficiency of $10,085,662, a stockholders deficiency of $9,470,271 and has a negative cash flow from operations of $14,888,265 from inception. This raises substantial doubt about its ability to continue as a going concern."
With pending lawsuits in Florida from promissory note lenders Shambro, Beshara, and Niedrich, as well as with companies that Infinium apparently owes money to such as CDW Corporation and Black Rocket Euro RSCG, plus a still pending SEC investigation regarding 'fax blasts' promoting the company's shares, it's unclear whether the Lapboard, let alone the Phantom console itself, will finally wend its way to market.