In fiscal 2001, prices in the first quarter topped out at $1.875 per share but fell to $0.100 during the fourth quarter. During fiscal 2000, stock prices peaked during the first quarter at $3.813 per share before falling to $0.500 per share during the fourth quarter. A broker may not recommend purchase of so-called penny stocks to other than established clients with significant assets without written permission from the purchaser prior to the transaction. Because the company's stock trades at less than $5.00 per share and its net tangible assets are less than $2 million, it is subject to restrictive trading under the rules of the Securities Exchange Act of 1934. Until April 1, 2001, eGames traded on the NASDAQ SmallCap Market however, the company was de-listed after its price per share fell below $1.00 for 30 consecutive days of trading, after which eGames began trading on the Over-the-Counter (OTC) Bulletin Board. During the first three quarters of fiscal 2002, eGames successfully reduced its operating expenses by more than $2.4 million, or 48 percent. Excluding the impact of this agreement, eGames would have reported for the first nine months of fiscal 2002 net sales of $5.82 million, representing a year-over-year decrease of $612,000, and a net loss of $113,000, representing a year-over-year net loss decrease of $2.38 million. Income and revenues totals were significantly impacted by an agreement reached between eGames and one of its retailers in February of 2002, which made final all sales of previously shipped software and eliminated return privileges. Other factors driving up cost of sales include processing costs for product returns totaling $324,000 and freight costs totaling $206,000.įor the first three quarters of fiscal 2002, ending March 31, eGames reported a net income of $1.01 million on net sales totaling $7.93 million, compared to a net loss of $768,000 on revenues of $6.43 million during the same period of the previous year. The increase in cost of sales is attributed primarily to a provision to absorb $1.27 million in costs for obsolete inventory. International sales also declined by $98,000.Ĭompounding the disparity between profit/loss and revenues was an increase in cost of sales by $1.73 million, from $4.28 million in fiscal 2000 to $6.01 million in fiscal 2001, representing a 40 percent increase. Net sales of $1.13 million to food and drug retailers only partially offset the losses incurred in the retail market. Of that total, eGames reported an estimated loss of $2.91 million due to a retailers' trend toward reducing their value-priced software selections, with the remaining loss sustained due to increased value-priced software competition from major software distributors, which eroded eGames' hold on its niche market. The decline in sales was primarily caused by a decrease of $4.88 million in net sales to distributors who sell to software retailers, as well as direct sales to such retailers. eGames also markets its software titles via its Web sites, and .įor fiscal year 2001, ending June 30, 2001, eGames posted a net loss of $5.93 million on revenues of $7.17 million, compared to a net income of approximately $252,600 on revenues of $10.79 million for fiscal year 2000, representing a decrease of $3.62 million in revenues and $6.18 million in net income. and Navarre Corporation accounted for 22 percent and 13 percent of sales, respectively. During the previous fiscal year, Infogrames Inc. The majority of titles are entertainment-based, although the company also offers a limited number of home office and productivity software products.ĭuring fiscal year 2001, ending June 30, 2001, Walgreen Company, Infogrames Inc., and Rite Aid Corporation accounted for 20 percent, 17 percent, and 10 percent of sales, respectively. Software titles are promoted as full-featured, value-priced, and easy-to-use. The entire stock of the company's games are marketed under the trademark of Family Friendly, reflecting that fact that every product sold by eGames is rated E for Everyone by the Entertainment Software Ratings Board, meaning that they are nonviolent and appropriate for all ages. HEADQUARTERS: 2000 Cabot Blvd., Suite 110ĮGames develops and markets entertainment software targeted to home personal computer users.
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