Atari 2009 Annual Report Download - page 70

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ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
70
The repayment by the Company of a USD 14.0 million loan (approximately €11 million) granted by BlueBay to Atari
Inc.
A total of 405.438 ORANE bonds were issued, each with a nominal value of €100 and bearing annual interest of
0.5%.The bonds mature on April 1, 2014 when each ORANE bond will be redeemed by 26.26 new or existing shares,
subject to any subsequent adjustments, at the discretion of the Company. The bonds are listed under ISIN code
FR0010690081.
A warrant is attached to each ORANE bond which is exercisable for one new share. A total of 405.438 warrants were
issued with an exercise price of €6 each and an expiration date of December 31, 2012.
For further information see Note 13 to the 2008-2009 consolidated financial statements.
1.10. SIMPLIFIED PUBLIC EXCHANGE OFFER FOR THE ORANE BONDS ISSUED IN 2008 AND THE STOCK WARRANTS
ISSUED IN 2006/2007
In February 2009, the Company completed the simplified public exchange offer for its ORANE bonds convertible for new
or existing shares issued in January 2008 (ORANE 2008) and the stock warrants issued on December 22, 2006 and
January 24, 2007 (BSA 2007). The offer included the following terms:
The exchange of one hundred 2007 stock warrants for one newly-issued “BSA 2009” warrant and the exchange of
one ORANE 2008 bond for one newly-issued “ORANE 2009” bond.
The ORANE 2009 bonds (listed under ISIN code FR0010696153) are subject to the same conditions as the ORANE
2008 bonds, except for the conversion ratio which has been set at 17 new or existing shares for one ORANE 2009
bond (instead of 8.94 new or existing shares for one ORANE 2008 bond, after adjustments).
The BSA 2009 warrants are subject to the same conditions as the BSA 2007 warrants except for as follows:
The exercise price has been set at €6 per BSA 2009 warrant (instead of €15 per 100 BSA 2007 warrants); and
The expiration date has been set at December 31, 2012 (instead of December 31, 2009).
The terms of the overall transaction were examined by an independent appraiser who concluded that they were fair with
respect to minority shareholders.
For further information see Note 13 to the 2008-2009 consolidated financial statements.
EVENTS AFTER THE BALANCE SHEET DATE
Significant events that have occurred since March 31, 2009 are summarized in Note 28.
NOTE 2 – SUM MARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1. GENERAL PRINCIPLES
The consolidated financial statements of Atari Inc. for the year ended March 31, 2009 have been prepared in accordance
with IFRS standards as adopted by the European Union and whose application was mandatory at April 1, 2007.
The accounting policies and measurement methods used are the same as those applied for the year ended March 31,
2008.
These financial statements and the related notes are presented in euros. They were approved by the Board of Directors
on May 25, 2009.
Application of the going concern principle
During and prior to fiscal year 2008-2009 the Group made significant losses that have eroded its equity and cash
position. At March 31, 2009 shareholders‟ equity amounted to a negative €17.5 million, taking into account the
€226.1 million loss posted for 2008-2009. During the year the Group‟s cash and cash equivalents decreased by a net
€62.2 million and net debt increased by €27.6 million.
In view of this situation the Group has undertaken measures to refocus its business on online activities and reduce
operating costs in order to return to operating profit, generate positive cash flows and improve working capital.
These measures include:
The acquisition in December 2008 of the California-based Cryptic Studios, which specializes in developing and
publishing Massively Multiplayer Online games (see Note 1.7). The acquisition was financed through an issue of
“ORANE-BSA” in January 2009 (see Note 1.9). The management forecast for 2009-2010 includes the impact of the
launch of Champions Online – a game developed by Cryptic – scheduled for the second quarter of the year.
Sale of all of the Group‟s Distribution operations in Europe and Asia to Namco Bandai, carried out in two phases:
34% in February 2009 and the remaining 66% in July 2009 (see Notes 1.5 and 22).