Prospectus details how would-be PC-game-console-maker lost $62.7 million in three years--and is putting the Phantom on hold.
Infinium Labs is focused on getting its Phantom Lapboard to market, but the cash-strapped company is in need of additional financing.
Last month, the company announced an arrangement for $5 million in funding from Golden Gate Investors. As part of that agreement, Infinium has filed a prospectus with the Securities and Exchange Commission detailing the company's unprofitable past and laying out its game plan for the future.
From its inception in December of 2002 through September of last year, Infinium racked up $62.7 million in losses. Of that, only $3.5 million has been lost to development costs. The company has spent more than half that in advertising, even though none of its products or services have been released yet. More of the company's money has been going toward consultants ($12.8 million), salaries ($11.9 million), and general and administrative expenses ($5.9 million).
As for how the company plans to reverse its fortunes, the prospectus indicates that, for now, the company is backing off of its Phantom Game Service and focusing on getting its Phantom Lapboard peripheral to market.
"We are developing and seeking to commercialize the Phantom Lapboard, a wireless, rotating custom keyboard/turntable with integrated mousepad," the prospectus reads. "After establishing the Phantom Lapboard, we may seek to develop and commercialize the Phantom Game Service."
And while Infinium has announced a second-quarter release for the Phantom Lapboard, the prospectus suggests that might not happen and is quite dependent on the company's attempts to secure more funding.
"Given our limited resources, and the delays experienced thus far, we are not in a position to anticipate a completion date for development of our product or a launch date for the Phantom Lapboard."
Should Infinium manage to release the Phantom Lapboard, it would do so first through an online store, possibly moving into brick-and-mortar retailers later on. The company said it will support the Lapboard release with a marketing campaign that relies heavily on viral advertising, apparently including message board moles.
"Tactics we intend to utilize are one-to-one and online/viral techniques to identify, communicate and drive hardcore gamers (who are the most likely early adopters) to the Phantom Internet website," according to the prospectus. "We also intend to infiltrate best-in-class video game communities with simple, easy to understand message and seeding on tech blogs, gaming sites and on-line player forums with compelling imagery and links to lapboard eye candy."
Infinium's filing also details a history of the company's broken agreements. It had signed royalty agreements with a number of publishers to provide games for its Phantom Game Service. Each publisher was guaranteed an advance royalty payment, and in each case mentioned, Infinium has so far failed to live up to its end of the bargain. It guaranteed advance royalties of $500,000 to Atari (publisher of the Dragon Ball Z and Driver series), $225,000 to Riverdeep (Carmen Sandiego, Reader Rabbit), $125,000 to Eidos (Tomb Raider, 25 to Life), $25,000 to Codemasters (TOCA Race Driver 3, RF Online), and $10,000 to Enlight (Bad Day L.A., Scrapland). Infinium is in default of its agreements with all of these companies.
The company also owes money to its landlord. With a monthly rent of more than $25,000 for its Seattle, Washington, headquarters, the company has defaulted on its lease to the tune of approximately $127,000. Infinium is currently negotiating with the landlord to leave the office space by the end of the month, six months before the end of its original lease. The company intends to find another facility in Seattle to serve as its headquarters going forward.
I still want that goddamn lapboard.