Majesco Entertainment, the financially troubled video game developer and publisher, secured $6 million in funding from "certain accredited investors," the company announced today.
Of the total funds, "approximately" $1 million is available now. The balance will be placed in escrow and disbursed later, pending conditions like stockholder approval.
The investors purchased Majesco sock shares at $0.68 per unit. As of this writing, Majesco's shares are trading at $0.59 per share on the Nasdaq stock exchange.
Majesco, the publisher of games like Zumba Fitness series, has faced financial difficulties throughout the last few years.
In March 2013, Nasdaq gave Majesco 180 calendar days to raise its stock price or face delisting if it remained below $1 per share. In August 2013, Majesco received a 180 day extension to comply before Feb. 14, 2014. Nasdaq required that Majesco keep its stock above the minimum value for 10 consecutive business days or it would be delisted. In February 2014, when its stock was trading at $0.54, management sought stockholder approval for a reverse stock split to raise the value of stock beyond the minimum threshold. In July 2014, Majesco stock rose above $1 per share.
In early November, Majesco filed a Form 8-K outlining its ongoing troubles and efforts to alleviate them.
"On October 31, 2014, we implemented a reduction of our workforce to reduce our fixed costs," the form reads. The reduction includes development and game-testing, selling and marketing, and support personnel. We are currently not developing any significant new games for release in fiscal 2015."
The filing also revealed that management was exploring the possibility of selling or merging.
"As discussed in our quarterly report on Form 10-Q for the quarterly period ended July 31, 2014, we have suffered losses that raise substantial doubt about our ability to continue as a going concern. Accordingly, we are evaluating various alternatives, including reducing operating expenses and personnel costs, securing additional financing for future business activities, and other strategic alternatives including a sale or merger of our company."