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The Galleon Holdings share price has almost halved as the entertainment content developer and distributor warns that it is running out of cash.
At 1.12p a share, down 1p, Galleon is valued at £1.88m.
Two games, Happy Tank and Chuangshenlu, where launched at the beginning of the year on Qzone, a leading social networking portal in China. Another game, Revenge of Titans, has been licensed in Turkey. These have not generated the expected revenues and cash.
Galleon is cutting costs but cash is running down. A £500,000 loan facility with Medical Consultant and Management Ltd was agreed at the end of January and £400,000 of existing loans were transferred to this facility, which lasts until 15 January 2014. The interest rate is 2% a month. The loan is secured against $1.2m of licensing agreements payable over 18 months and the maximum amount outstanding on the loan cannot be more than 87.5% of the balance of the licensing income outstanding.
Galleon needs to raise more cash and it is assessing its options.
Net debt was £406,000 at the end of March 2012.
Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFFebruary2013_41.pdf
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