| In re: | Case No. 09-10465 (KG) | |
| Midway Games Inc., et. al., | Jointly Administered | |
| Debtors | Reporting Period: 7/1/09 — 7/31/09 |
| Document | Affidavit | |||||
| REQUIRED DOCUMENTS | Form No. | Attached | Attached | |||
| Schedule of Cash Receipts and Disbursements | MOR-1 | X | ||||
| Bank Reconciliations, Copies of Bank Statements and Cash Disbursements Journals | MOR-la | X | ||||
| Schedule of Professional Fees Paid | MOR-lb | X | ||||
| Statements of Operations | MOR-2 | X | ||||
| Balance Sheets | MOR-3 | X | ||||
| Status of Postpetition Taxes | MOR-4 | X | ||||
| Summary of Unpaid Postpetition Accounts Payable | MOR-4 | X | ||||
| Accounts Receivable Reconciliation and Aging | MOR-5 | X | ||||
| Debtor Questionnaire | MOR-5 | X |
/s/ Ryan G. O’Desky | 9/22/09 | |
| Ryan G. O’Desky Chief Financial Officer and Treasurer | Date |
Page 1 of 12
| In re: Midway Games Inc., et al., Debtors | Case No. 09-10465 (KG) Jointly Administered Reporting Period: 7/1/09 to 7/31/09 |
| Midway | Midway | Midway | Midway | |||||||||||||||||||||||||||||||||||||||||
| Midway Home | Midway | Midway | Midway | Home | Sales | Surreal | Studios — | Studios — | Midway | Current | ||||||||||||||||||||||||||||||||||
| Entertainment | Amusement | Interactive | Games | Studios | Company, | Software | Austin | Los Angeles | Games | Month | ||||||||||||||||||||||||||||||||||
| Debtor | Inc. | Games, LLC | Inc. | West Inc. | Inc. | LLC | Inc. | Inc. | Inc. | Inc. | Total | |||||||||||||||||||||||||||||||||
Cash at beginning of the month | $ | 25,537,126.14 | ($3,717,003.21 | ) | ($325.00 | ) | ($325.00 | ) | ($325.00 | ) | ($325.00 | ) | ($3,748,074.31 | ) | $ | 455,005.17 | $ | 2,102.98 | ($2,728,551.98 | ) | $ | 15,799,304.79 | ||||||||||||||||||||||
RECEIPTS | ||||||||||||||||||||||||||||||||||||||||||||
| Trade accounts receivable | 1,502,668.77 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,502,668.77 | |||||||||||||||||||||||||||||||||
| Royalty income | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||
| Cash held in trust | (239,516.65 | ) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | (239,516.65 | ) | |||||||||||||||||||||||||||||||
| Proceeds from asset sales | 48,955,594.08 | (5,000,772.08 | ) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 43,954,822.00 | ||||||||||||||||||||||||||||||||
| Other | 0.00 | 42.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 42.00 | |||||||||||||||||||||||||||||||||
Total Receipts | $ | 50,218,746.20 | ($5,000,730.08 | ) | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 45,218,016.12 | ||||||||||||||||||||||
DISBURSEMENTS | ||||||||||||||||||||||||||||||||||||||||||||
| Factoring repayments | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||
| Cost of goods sold | 99,995.25 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 99,995.25 | |||||||||||||||||||||||||||||||||
| Payroll | 687,564.06 | 2,759,915.34 | 0.00 | 0.00 | 0.00 | 0.00 | 169,481.33 | 0.00 | 6,493.68 | 174,798.88 | 3,798,253.29 | |||||||||||||||||||||||||||||||||
| Milestones — 3rd party developers | 176,000.07 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 10,000.00 | 0.00 | 0.00 | 0.00 | 186,000.07 | |||||||||||||||||||||||||||||||||
| Royalities | 2,633,505.24 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 2,633,505.24 | |||||||||||||||||||||||||||||||||
| Marketing and advertising | 14,061.19 | 2,569.11 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 16,630.30 | |||||||||||||||||||||||||||||||||
| Sales commissions | 82,779.17 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 82,779.17 | |||||||||||||||||||||||||||||||||
| Rent — facilities/equipment/taxes | 105,893.60 | 29,265.83 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 135,159.43 | |||||||||||||||||||||||||||||||||
| Utilities | 56,576.15 | 46,690.37 | 0.00 | 0.00 | 0.00 | 0.00 | 1,328.83 | 4,489.65 | 0.00 | 904.21 | 109,989.21 | |||||||||||||||||||||||||||||||||
| Benefits | 66,309.71 | 169,358.23 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 11,929.21 | 0.00 | 0.00 | 247,597.15 | |||||||||||||||||||||||||||||||||
| Insurance | 0.00 | 52,498.50 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 52,498.50 | |||||||||||||||||||||||||||||||||
| IT equipment | 20,625.97 | 15,439.38 | 0.00 | 0.00 | 0.00 | 0.00 | 5,303.61 | 0.00 | 0.00 | 0.00 | 41,368.96 | |||||||||||||||||||||||||||||||||
| Legal | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 79,584.99 | 79,584.99 | |||||||||||||||||||||||||||||||||
| Maintenance | 3,455.21 | 6,351.29 | 0.00 | 0.00 | 0.00 | 0.00 | 483.27 | 0.00 | 0.00 | 0.00 | 10,289.77 | |||||||||||||||||||||||||||||||||
| Relocation | 8,341.47 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 8,341.47 | |||||||||||||||||||||||||||||||||
| Shipping | 5,128.04 | 1,531.85 | 0.00 | 0.00 | 0.00 | 0.00 | 152.06 | 0.00 | 0.00 | 0.00 | 6,811.95 | |||||||||||||||||||||||||||||||||
| Supplies | 397.84 | 1,714.97 | 0.00 | 0.00 | 0.00 | 0.00 | 1,746.65 | 0.00 | 0.00 | 0.00 | 3,859.46 | |||||||||||||||||||||||||||||||||
| Consultants and contractors | 36,069.70 | 62,746.15 | 0.00 | 0.00 | 0.00 | 0.00 | 51,545.27 | 570.00 | 0.00 | 36,043.08 | 186,974.20 | |||||||||||||||||||||||||||||||||
| Board of Directors | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||
| Employee expense reports | 3,824.25 | 3,774.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 8,815.73 | 16,413.98 | |||||||||||||||||||||||||||||||||
| Settlement of accrued debt | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 4,712,667.37 | 4,712,667.37 | |||||||||||||||||||||||||||||||||
| Taxes | 211.00 | 16.00 | 0.00 | 0.00 | 0.00 | 0.00 | 2,642.01 | 0.00 | 0.00 | 454.34 | 3,323.35 | |||||||||||||||||||||||||||||||||
| Purchasing cards | 547.89 | 50,709.52 | 0.00 | 0.00 | 0.00 | 0.00 | 816.28 | 0.00 | 0.00 | 4,485.46 | 56,559.15 | |||||||||||||||||||||||||||||||||
| Subtotal operating disbursements | 4,001,285.81 | 3,202,580.54 | 0.00 | 0.00 | 0.00 | 0.00 | 243,499.31 | 16,988.86 | 6,493.68 | 5,017,754.06 | 12,488,602.26 | |||||||||||||||||||||||||||||||||
| US Trustee fees | 13,000.00 | 13,000.00 | 325.00 | 325.00 | 325.00 | 325.00 | 9,750.00 | 1,950.00 | 325.00 | 10,400.00 | 49,725.00 | |||||||||||||||||||||||||||||||||
| Huron Consulting Group | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 89,377.40 | 89,377.40 | |||||||||||||||||||||||||||||||||
| Dewey & LeBoeuf LLP | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 208,115.77 | 208,115.77 | |||||||||||||||||||||||||||||||||
| Incentive Bonus | 552,900.00 | 679,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 103,062.50 | 0.00 | 0.00 | 1,090,037.50 | 2,425,000.00 | |||||||||||||||||||||||||||||||||
| Lazard Frères & Co. LLC | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 102,880.69 | 102,880.69 | |||||||||||||||||||||||||||||||||
| Epiq Bankruptcy Solutions | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 65,894.24 | 65,894.24 | |||||||||||||||||||||||||||||||||
| Subtotal restructuring disbursements | 565,900.00 | 692,000.00 | 325.00 | 325.00 | 325.00 | 325.00 | 112,812.50 | 1,950.00 | 325.00 | 1,566,705.60 | 2,940,993.10 | |||||||||||||||||||||||||||||||||
Total Disbursements | $ | 4,567,185.81 | $ | 3,894,580.54 | $ | 325.00 | $ | 325.00 | $ | 325.00 | $ | 325.00 | $ | 356,311.81 | $ | 18,938.86 | $ | 6,818.68 | $ | 6,584,459.66 | $ | 15,429,595.36 | ||||||||||||||||||||||
Receipts less disbursements | $ | 45,651,560.39 | ($8,895,310.62 | ) | ($325.00 | ) | ($325.00 | ) | ($325.00 | ) | ($325.00 | ) | ($356,311.81 | ) | ($18,938.86 | ) | ($6,818.68 | ) | ($6,584,459.66 | ) | $ | 29,788,420.76 | ||||||||||||||||||||||
Cash at end of the month | $ | 71,188,686.53 | $ | (12,612,313.83 | ) | $ | (650.00 | ) | $ | (650.00 | ) | $ | (650.00 | ) | $ | (650.00 | ) | $ | (4,104,386.12 | ) | $ | 436,066.31 | $ | (4,715.70 | ) | $ | (9,313,011.64 | ) | $ | 45,587,725.55 | ||||||||||||||
| 1) | Cash balances may not be same as the bank statements or ledger balances as they do not reflect unavailable funds, outstanding checks and other timing differences. | |
| 2) | Included in the beginning cash balance were two restricted letters of credit at Midway Home Entertainment Inc. (MHE) for $225,000 and at Midway Studios — Austin Inc. for $696,531.34. | |
| 3) | Disbursements reflect when the disbursement accounts are funded rather than when the item clears the bank. | |
| 4) | Timing of receipts and internal accounting can cause period-end discrepancies in respective intercompany reporting. | |
| 5) | Because there were no transfers to debtors in possession accounts or estate disbursements made by outside sources, the total disbursements line above will be used to calculate U.S. Trustee quarterly fees. | |
| 6) | U.S. Trustee quarterly fees are paid by Midway Games Inc. on behalf of each Debtor and expenses are allocated based on fees calculated for each Debtor. | |
| 7) | The cash held in trust at MHE represents collections of accounts receivable, pursuant to the Transition Services Agreement, on behalf of Warner Bros. Entertainment Inc. (WBEI) subsequent to the sale of accounts receivable to WBEI on July 10, 2009. These amounts collected were remitted to WBEI during the month but are not included in disbursements used to calculate U.S. Trustee quarterly fees. | |
| 8) | Proceeds from asset sales reported at MHE were received upon completion of the sale of assets to WBEI pursuant to the Asset Purchase Agreement. Of this amount, $5,000,772.08 represents the sale deposit from WBEI, plus interest, transferred from the sale escrow account established in May 2009 that was recorded on the books of Midway Amusement Games, LLC. |
Page 2 of 12
| In re: | ||
| Midway Games Inc., et al., | Case No. 09-10465 et seq. (KG) | |
| Debtors | Jointly Administered | |
| Reporting Period: 7/1/09-7/31/09 |
/s/ Ryan G. O’Desky | 9/22/09 | |
| Ryan G. O’Desky | Date | |
| Chief Financial Officer and Treasurer |
Page 3 of 12
| In re: | Case No. 09-10465 (KG) | |
| Midway Games Inc., et al., | Jointly Administered | |
| Debtors | Reporting Period: 7/1/09 to 7/31/09 |
| Debtor | Bank/Institution | Account Number | Book Balance | |||||||
| Midway Home Entertainment Inc. | Wells Fargo Bank N.A. | #583884 | $ | 225,000.00 | ||||||
| Midway Home Entertainment Inc. | Wells Fargo Bank N.A. | #4030110425 | $ | 4,093.42 | ||||||
| Midway Home Entertainment Inc. | Bank of America | #8765261617 | $ | 55,421.48 | ||||||
| Midway Home Entertainment Inc. | Bank of America | #8666525641 | $ | 1,040,151.99 | ||||||
| Midway Home Entertainment Inc. | Bank of America | #8188615313 | $ | 50,270.37 | ||||||
| Midway Home Entertainment Inc. | Bank of America | #8188615318 | $ | 41,731,300.05 | ||||||
| Midway Amusement Games, LLC | Bank of America | #8765763067 | $ | 39,871.74 | ||||||
| Midway Amusement Games, LLC | Bank of America | #8666305125 | $ | 79,009.94 | ||||||
| Midway Amusement Games, LLC | Bank of America | #8666018766 | $ | 8,385.51 | ||||||
| Midway Amusement Games, LLC | Wells Fargo Bank N.A. | #4030010797 | $ | 0.00 | ||||||
| Midway Amusement Games, LLC | JP Morgan | #806021788 | $ | 0.00 | ||||||
| Surreal Software Inc. | Bank of America | #8765216044 | $ | 4,309.96 | ||||||
| Midway Studios — Austin Inc. | Wells Fargo Bank N.A. | #561549 | $ | 696,531.34 | ||||||
| Midway Studios — Austin Inc. | Bank of America | #8765216049 | $ | 35,599.42 | ||||||
| Midway Studios — Los Angeles Inc. | Bank of America | #8765216063 | $ | 2,428.41 | ||||||
| Midway Games Inc. | Bank of America | #8666302112 | $ | 0.00 | ||||||
| Midway Games Inc. | Bank of America | #8765763147 | $ | 30,157.94 | ||||||
| Midway Games Inc. | Bank of America | #8666302112 | $ | 2,055,941.79 | ||||||
| Midway Games Inc. | Bank of America | #8188615332 | $ | 15.07 | ||||||
Page 4 of 12
| In re: | Case No. 09-10465 (KG) | |
| Midway Games Inc., et al., | Jointly Administered | |
| Debtors | Reporting Period: 7/1/09-7/31/09 |
| ILLEGIBLE | ILLEGIBLE | ILLEGIBLE | ILLEGIBLE | ILLEGIBLE | ILLEGIBLE | ILLEGIBLE | ILLEGIBLE | ILLEGIBLE | ILLEGIBLE | |||||||||||||||||||
| Blank Rome LLP 1 | $ | 597,922.83 | $ | 38,604.36 | ||||||||||||||||||||||||
| Kramer Levin Naftalis 2 | $ | 232,546.50 | $ | 4,786.13 | ||||||||||||||||||||||||
| Mesirow Financial 2 | $ | 50,000.00 | $ | 0.00 | ||||||||||||||||||||||||
| Dewey & LeBoeuf LLP 3 | 4/01/09 - 4/30/09 | $ | 208,115.77 | Midway Games Inc. | 07/09/09 | CHECK: 74690 | $ | 201,471.20 | $ | 6,644.57 | $ | 327,788.40 | $ | 9,752.12 | ||||||||||||||
| Ernst & Young, LLP 4 | $ | 111,439.20 | $ | 386.00 | ||||||||||||||||||||||||
| Milbank, Tweed, Hadley & McCloy LLP 5 | $ | 1,039,455.60 | $ | 134,522.55 | ||||||||||||||||||||||||
| Richards, Layton & Finger, P.A. 6 | $ | 84,939.60 | $ | 15,761.48 | ||||||||||||||||||||||||
| FTI Consulting, Inc. 7 | $ | 212,299.26 | $ | 338.75 | ||||||||||||||||||||||||
| Lazard Frères & Co. LLC 8 | 2/12/09 - 3/31/09 | $ | 102,880.69 | Midway Games Inc. | 07/09/09 | WIRE: 25964945 | $ | 101,785.71 | $ | 1,094.98 | $ | 101,785.71 | $ | 1,094.98 | ||||||||||||||
| Huron Consulting Group 9 | 3/1/09 - 3/31/09 | $ | 33,865.80 | Midway Games Inc. | 07/09/09 | CHECK: 74692 | $ | 33,865.80 | $ | 0.00 | $ | 33,865.80 | $ | 0.00 | ||||||||||||||
| Huron Consulting Group 9 | 2/12/09 - 3/31/09 | $ | 55,511.60 | Midway Games Inc. | 07/09/09 | CHECK: 74692 | $ | 55,511.60 | $ | 0.00 | $ | 89,377.40 | $ | 0.00 | ||||||||||||||
| $ | 392,634.31 | $ | 7,739.55 | $ | 2,847,554.50 | $ | 205,246.37 | |||||||||||||||||||||
| 1 | Lead bankruptcy counsel for the Debtors | |
| 2 | Lead counsel and financial advisors working on behalf of Thomas Parties | |
| 3 | Special counsel to the independent members of the post-petition Board of Directors of the Debtors | |
| 4 | Independent auditor to the Debtors | |
| 5 | Counsel to the Official Committee of Unsecured Creditors | |
| 6 | Co-counsel to the Official Committee of Unsecured Creditors | |
| 7 | Financial advisor to the Official Committee of Unsecured Creditors | |
| 8 | Investment banker to the Debtors | |
| 9 | Bankruptcy consultants to the Debtors |
Page 5 of 12
| In re: | Case No. 09-10465 (KG) | |
| Midway Games Inc., et al., | Jointly Administered | |
| Debtors | Reporting Period: 7/1/09 to 7/31/09 |
| Midway | ||||||||||||||||||||||||||||||||||||||||||||||||
| Midway Home | Amusement | Midway | Midway Games | Midway Home | Midway Sales | Surreal Software | Midway Studios — | Midway Studios — | Midway Games | |||||||||||||||||||||||||||||||||||||||
| Case number for | Entertainment, Inc. | Games, LLC | Interactive Inc. | West Inc. | Studios Inc. | Company, LLC | Inc. | Austin Inc. | Los Angeles Inc. | Inc. | Adjustments and | Total of All | ||||||||||||||||||||||||||||||||||||
| individual Debtors | 09-10467 | 09-10466 | 09-10468 | 09-10472 | 09-10473 | 09-10474 | 09-10469 | 09-10470 | 09-10471 | 09-10465 | Allocations (1) | Debtors | ||||||||||||||||||||||||||||||||||||
REVENUES | ||||||||||||||||||||||||||||||||||||||||||||||||
| Gross sales | $ | 772,877.35 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 772,877.35 | ||||||||||||||||||||||||
| Royalty and other revenue (2) | 1,966,963.56 | 533,435.51 | — | — | — | — | — | — | — | — | 2,500,399.07 | |||||||||||||||||||||||||||||||||||||
| Allowances | (21,992.95 | ) | — | — | — | — | — | — | — | — | — | — | (21,992.95 | ) | ||||||||||||||||||||||||||||||||||
| Net revenues | 2,717,847.96 | 533,435.51 | — | — | — | — | — | — | — | — | — | 3,251,283.47 | ||||||||||||||||||||||||||||||||||||
COST OF GOODS SOLD | ||||||||||||||||||||||||||||||||||||||||||||||||
| Product costs and distribution | 378,008.73 | — | — | — | — | — | — | — | — | — | — | 378,008.73 | ||||||||||||||||||||||||||||||||||||
| Royalties (3) | (7,372,214.51 | ) | — | — | — | — | — | — | — | — | — | — | (7,372,214.51 | ) | ||||||||||||||||||||||||||||||||||
| Product development costs (4) | 30,852,245.94 | — | — | — | — | — | — | — | — | — | — | 30,852,245.94 | ||||||||||||||||||||||||||||||||||||
| Total cost of goods sold | 23,858,040.16 | — | — | — | — | — | — | — | — | — | — | 23,858,040.16 | ||||||||||||||||||||||||||||||||||||
| Gross profit | (21,140,192.20 | ) | 533.435.51 | — | — | — | — | — | — | — | — | — | (20,606,756.69 | ) | ||||||||||||||||||||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||||||||||||||||||||||||||||||
| Rent expense (5) | 89,715.06 | 12,244.24 | — | — | — | — | (149,686.96 | ) | 53,343.27 | — | — | — | 5,615.61 | |||||||||||||||||||||||||||||||||||
| Insurance | 47,013.19 | 68,634.96 | — | — | — | — | 48,679.62 | 749.65 | 14.75 | 176,341.76 | — | 341,433.93 | ||||||||||||||||||||||||||||||||||||
| Payroll and benefits | 772,634.47 | 889,389.62 | — | — | — | — | 267,623.41 | — | (2,508.35 | ) | 2,777,547.31 | — | 4,704,686.46 | |||||||||||||||||||||||||||||||||||
| All other research and development | 157,362.78 | 148,970.07 | — | — | — | — | 63,449.14 | 29,943.91 | 3,666.81 | — | — | 403,392.71 | ||||||||||||||||||||||||||||||||||||
| All other selling and marketing | 100,480.60 | 31,553.07 | — | — | — | — | — | — | — | 560.55 | — | 132,594.22 | ||||||||||||||||||||||||||||||||||||
| All other administrative | 23,459.65 | 160,335.26 | — | — | — | — | — | — | — | 243,512.37 | — | 427,307.28 | ||||||||||||||||||||||||||||||||||||
| Impairment of intangible assets(6) | 27,614,515.11 | — | — | 5,849,000.00 | — | — | 2,585,900.56 | 1,192,298.99 | 2,254,887.17 | — | — | 39,496,601.83 | ||||||||||||||||||||||||||||||||||||
| (Gain) Loss on sale of assets (7) | (39,077,058.68 | ) | 252,081.42 | — | — | — | — | — | — | — | — | — | (38,824,977.26 | ) | ||||||||||||||||||||||||||||||||||
| Total operating expenses | (10,271,877.82 | ) | 1,563,208.64 | — | 5,849,000.00 | — | — | 2,815,965.77 | 1,276,335.82 | 2,256,060.38 | 3,197,961.99 | — | 6,686,654.78 | |||||||||||||||||||||||||||||||||||
OTHER INCOME AND EXPENSES | ||||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | 9,529.40 | 772.08 | — | — | — | — | — | — | — | 220.77 | — | 10,522.25 | ||||||||||||||||||||||||||||||||||||
| Interest expense | — | — | — | — | — | — | — | — | — | (16,041.78 | ) | — | (16,041.78 | ) | ||||||||||||||||||||||||||||||||||
| Gain on extinguishment of debt (8) | — | — | — | — | — | — | — | — | — | 65,535,154.56 | — | 65,535,154.56 | ||||||||||||||||||||||||||||||||||||
| Other income and (expense), net | 201,152.83 | — | — | — | — | — | — | — | — | (51,703.13 | ) | — | 149,449.53 | |||||||||||||||||||||||||||||||||||
| Income (loss) before reorganization items | (10,657,632.15 | ) | (1,029,001.05 | ) | — | (5,849,000.00 |
) | — | — | (2,815,965.77 | ) | (1,276,335.82 | ) | (2,256,060.38 | ) | 62,269,668.26 | — | 38,385,673.09 | ||||||||||||||||||||||||||||||
REORGANIZATION ITEMS | ||||||||||||||||||||||||||||||||||||||||||||||||
| Professional fees (9) | 729,280.23 | — | 729,280.23 | |||||||||||||||||||||||||||||||||||||||||||||
| U.S. Trustee quarterly fees (10) | — | 2,600.00 | — | — | — | — | 3,250.00 | 325.00 | — | 5,525.00 | — | 11,700.00 | ||||||||||||||||||||||||||||||||||||
| Total reorganization expenses | — | 2,600.00 | — | — | — | — | 3,250.00 | 325.00 | — | 734,805.23 | — | 740,980.23 | ||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 109,398.00 | — | — | — | — | — | — | — | — | 109,398.00 | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (10,767,030.15 | ) | $ | (1,031,601.05 | ) | $ | — | $ | (5,849,000.00 | ) | $ | — | $ | — | $ | (2,819,215.77 | ) | $ | (1,276,660.82 | ) | $ | (2,256,060.38 | ) | $ | 61,534,863.03 | $ | — | $ | 37,535,294.86 | ||||||||||||||||||
| (1) | In performing the accounting for its day-to-day operations, MGI and the its Debtor and non-Debtor affiliates had previously allocated common expenses among MGI subsidiaries and capitalized qualifying product developments expenses in accordance with U.S. generally accepted accounting principles (GAAP). As a result of the produced amount of these common expenses and the discontinuation of capitalization of product development expense, no amounts were reported in the Adjustments and Allocations column for July 2009. | |
| (2) | These amounts primarily represent cash received in prior periods that had been previously recorded as deferred revenue. As a result of events relating to the sale of assets to Warner Bros. Entertainment Inc. (WBEI) on July 10, 2009, these amounts are recognizable as revenue in July 2009. | |
| (3) | As a result of events related to the sale of assets to WBEI, to Debtor will no longer be responsible for future payments related to certain third party developers and licensing agreements, and is not permitted to pay future design team bonuses; therefore, all accrued amounts related to these payments were reversed. | |
| (4) | As a result of events related to the sale of assets to WBEI, the Debtor will no longer be developing and releasing video games, therefore, all capitalized product development costs related to future game development were reversed to expenses. | |
| (5) | As a result of events related to the sale of substantially all of the assets of Surreal Software Inc. to WBEI, the deferred rent liability that had been previously recorded to equalize rent expense over the lease term was reversed, resulting in negative expense for July 2009. | |
| (6) | As a result of the sale of assets to WBEI, the remaining net assets of the Debtors were determined to have a value of zero; therefore, an impairment charge was recorded to expense all previously recorded goodwill. | |
| (7) | These amounts represents the net gain or loss resulting from the difference between the consideration received by the Debtor related to the sale of assets to WBEI and the net book value of the assets assured by WBEI and liabilities settled as a result of the sale. | |
| (8) | Pursuant to a settlement agreement, a portion of the proceeds received by the Debtors from the sale of assets to WBEI was used to settle amounts owed under certain debt agreements; the settlement amount paid extinguished the related debt and accrued interest, and this amount represents the gain recorded as a result of the settlement. | |
| (9) | Professional Fees, Which are paid by MGI, are recorded as expense when incurred. All of these fees represents accruals and have not been paid as of July 31, 2009. No allocation of the benefits of such fees has been made to any other Debtor or non-Debtor entities. In addition to the accounts reported in this line item, $936,077.70 in fees have been submitted to the court for approval but payment had not yet been authorized as of July 31, 2009. | |
| (10) | U.S. Trustee Quarterly Fees are estimated and are expected to be involved and paid in October 2009 for the period from July-September 2009. Payment was made in July 2009 for quarterly fees incurred from April-June 2009. |
| Page 6 of 12 | FORM MOR-2 |
| In re: | Case No. 09-10465 (KG) | |
| Midway Games Inc., et al., | Jointly Administered | |
| Debtors | Reporting Period: 7/1/09 to 7/31/09 |
| Midway Home | Midway Amusement | Midway Interactive | Midway Games | Midway Home | Midway Sales | |||||||||||||||||||
| Entertainment Inc. | Games, LLC | Inc. | West Inc. | Studios Inc. | Company, LLC | |||||||||||||||||||
| Case number for individual Debtors | 09-10467 | 09-10466 | 09-10468 | 09-10472 | 09-10473 | 09-10474 | ||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
| CURRENT ASSETS | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | 42,887,529.89 | $ | 127,480.65 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Restricted cash | — | — | — | — | — | — | ||||||||||||||||||
| Receivables, net (2) | (743,468.49 | ) | 575,765.42 | — | — | — | — | |||||||||||||||||
| Inventories (2) | 17,715.32 | — | — | — | — | — | ||||||||||||||||||
| Capitalized product development costs (3) | — | — | — | — | — | — | ||||||||||||||||||
| Prepaid expenses and other current assets (2) | 776,719.91 | 938,908.09 | — | — | — | — | ||||||||||||||||||
| TOTAL CURRENT ASSETS | 42,938,496.63 | 1,642,154.16 | — | — | — | — | ||||||||||||||||||
| Restricted cash | — | — | — | — | — | — | ||||||||||||||||||
| Assets held for sale | — | — | — | — | — | — | ||||||||||||||||||
| Capitalized product development costs (3) | — | — | — | — | — | — | ||||||||||||||||||
| Property and equipment, net (2) | 870,778.54 | 118,824.86 | — | — | — | — | ||||||||||||||||||
| Goodwill (4) | — | — | — | — | — | — | ||||||||||||||||||
| Investment in subsidiaries (5) | — | — | 29,265,000.00 | (29,265,000.00 | ) | — | — | |||||||||||||||||
| Due from Debtors | 231,636,323.28 | 307,370,954.52 | 430,000.00 | 32,428,938.86 | — | — | ||||||||||||||||||
| Due from non-Debtor MGI subsidiaries | 30,078,478.94 | — | — | — | — | — | ||||||||||||||||||
| Other assets | 187,225.51 | — | — | — | — | — | ||||||||||||||||||
TOTAL ASSETS | $ | 305,711,302.90 | $ | 309,131,933.54 | $ | 29,695,000.00 | $ | 3,163,938.86 | $ | — | $ | — | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||||||||
| LIABILITIES NOT SUBJECT TO COMPROMISE (Post-petition) | ||||||||||||||||||||||||
| Amounts due to Insiders (6) | — | — | — | — | — | — | ||||||||||||||||||
| Accounts payable | 537,864.29 | 118,560.98 | — | — | — | — | ||||||||||||||||||
| Accrued compensation and related benefits (7) | 196,801.93 | 97,097.34 | — | — | — | — | ||||||||||||||||||
| Accrued royalties | 138,877.20 | — | — | — | — | — | ||||||||||||||||||
| Accrued selling and marketing | 180,605.99 | — | — | — | — | — | ||||||||||||||||||
| Deferred revenue | — | — | — | — | — | — | ||||||||||||||||||
| Other accrued liabilities | 545,121.05 | 2,642,439.82 | — | — | — | — | ||||||||||||||||||
| TOTAL POST-PETITION LIABILITIES | 1,599,270.46 | 2,858,098.14 | — | — | — | — | ||||||||||||||||||
| LIABILITIES SUBJECT TO COMPROMISE (Pre-Petition) (8) | ||||||||||||||||||||||||
| Secured liabilities | $ | 1,086.71 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Priority liabilities | 475,566.78 | 940,880.31 | — | — | — | — | ||||||||||||||||||
| Non-priority liabilities | 289,310,040.44 | 564,599,409.98 | 22,957,000.00 | 48,011,629.43 | — | — | ||||||||||||||||||
| TOTAL PRE-PETITION LIABILITIES | 289,786,693.93 | 565,540,290.29 | 22,957,000.00 | 48,011,629.43 | — | — | ||||||||||||||||||
| Due to Debtors | 9,821,825.12 | 19,073,533.36 | — | — | — | — | ||||||||||||||||||
| Due to non-Debtor MGI subsidiaries | 361,614.62 | 2,027.26 | — | — | — | — | ||||||||||||||||||
| Deferred income taxes | 12,793,702.00 | — | — | — | — | — | ||||||||||||||||||
| Deferred rent | 145,196.92 | — | — | — | — | — | ||||||||||||||||||
| STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||||||||
| Common stock | 1,000.00 | — | — | — | — | — | ||||||||||||||||||
| Additional paid-in capital | 1,704,243.52 | — | 2,750,000.00 | (186,000.00 | ) | — | — | |||||||||||||||||
| Retained earnings (accumulated deficit) | (10,502,243.67 | ) | (278,342,015.51 | ) | 3,988,000.00 | (44,661,690.57 | ) | — | — | |||||||||||||||
| Postpetition contributions (distributions) (draws) (7) | — | — | — | — | — | — | ||||||||||||||||||
| Treasury stock | — | — | — | — | — | — | ||||||||||||||||||
| TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | (8,797,000.15 | ) | (278,342,015.51 | ) | 6,738,000.00 | (44,847,690.57 | ) | — | — | |||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 305,711,302.90 | $ | 309,131,933.54 | $ | 29,695,000.00 | $ | 3,163,938.86 | $ | — | $ | — | ||||||||||||
Page 7 of 12
| In re: | Case No. 09-10465 (KG) | |
| Midway Games Inc., et al., | Jointly Administered | |
| Debtors | Reporting Period: 7/1/09 to 7/31/09 |
| Surreal Software | Midway Studios — | Midway Studios — | Midway Games | |||||||||||||||||
| Inc. | Austin Inc. | Los Angeles Inc. | Inc. | Total of All | ||||||||||||||||
| Case number for individual Debtors | 09-10469 | 09-10470 | 09-10471 | 09-10465 | Debtors (1) | |||||||||||||||
ASSETS | ||||||||||||||||||||
| CURRENT ASSETS | ||||||||||||||||||||
| Cash and cash equivalents | $ | 5,809.96 | $ | 35,599.42 | $ | 2,428.41 | $ | 2,086,114.80 | $ | 45,144,963.13 | ||||||||||
| Restricted cash | — | — | — | 246,531.34 | 246,531.34 | |||||||||||||||
| Receivables, net(2) | — | — | — | 77.27 | (167,625.80 | ) | ||||||||||||||
| Inventories(2) | — | — | — | — | 17,715.32 | |||||||||||||||
| Capitalized product development costs(3) | — | — | — | — | — | |||||||||||||||
| Prepaid expenses and other current assets(2) | — | 11,929.21 | 7,745.72 | 53,130.04 | 1,788,432.97 | |||||||||||||||
| TOTAL CURRENT ASSETS | 5,809.96 | 47,528.63 | 10,174.13 | 2,385,853.45 | 47,030,016.96 | |||||||||||||||
| Restricted cash | — | — | — | 675,000.00 | 675,000.00 | |||||||||||||||
| Assets held for sale | — | — | — | 2,346,400.00 | 2,346,400.00 | |||||||||||||||
| Capitalized product development costs(3) | — | — | — | — | — | |||||||||||||||
| Property and equipment, net(2) | — | 942,370.68 | 99,294.87 | 459,456.19 | 2,490,725.14 | |||||||||||||||
| Goodwill (4) | — | — | — | — | — | |||||||||||||||
| Investment in subsidiaries (5) | — | — | — | 21,472,773.11 | 21,472,773.11 | |||||||||||||||
| Due from Debtors | — | 253,368.44 | 156,098.20 | 656,039,655.45 | 1,228,315,338.75 | |||||||||||||||
| Due from non-Debtor MGI subsidiaries | — | — | — | 3,798,333.69 | 33,876,812.63 | |||||||||||||||
| Other assets | 60,025.63 | — | — | — | 247,251.14 | |||||||||||||||
TOTAL ASSETS | $ | 65,835.59 | $ | 1,243,267.75 | $ | 265,567.20 | $ | 687,177,471.89 | $ | 1,336,454,317.73 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||||
| LIABILITIES NOT SUBJECT TO COMPROMISE (Post-petition) | ||||||||||||||||||||
| Amounts due to Insiders (6) | — | — | — | — | — | |||||||||||||||
| Accounts payable | 14,594.09 | 11,147.08 | (2,695.56 | ) | 27,493.31 | 706,964.19 | ||||||||||||||
| Accrued compensation and related benefits (7) | 184,586.19 | (9,393.52 | ) | 57,096.90 | (90,612.48 | ) | 435,576.36 | |||||||||||||
| Accrued royalties | — | — | — | — | 138,877.20 | |||||||||||||||
| Accrued selling and marketing | — | — | — | — | 180,605.99 | |||||||||||||||
| Deferred revenue | — | — | — | — | — | |||||||||||||||
| Other accrued liabilities | 49,013.77 | 137,788.90 | 5,920.11 | 1,760,121.61 | 5,140,405.26 | |||||||||||||||
| TOTAL POST-PETITION LIABILITIES | 248,194.05 | 139,542.46 | 60,321.45 | 1,697,002.44 | 6,602,429.00 | |||||||||||||||
| LIABILITIES SUBJECT TO COMPROMISE (Pre-Petition) (8) | ||||||||||||||||||||
| Secured liabilities | $ | — | $ | 4,029.62 | $ | — | $ | — | $ | 5,116,33 | ||||||||||
| Priority liabilities | 174,824.30 | 49,081.40 | 4,884.62 | 275,066.23 | 1,920,303.64 | |||||||||||||||
| Non-priority liabilities | 49,332,525.63 | 64,744,685.61 | 30,531,064.78 | 340,982,668.45 | 1,410,469,044.32 | |||||||||||||||
| TOTAL PRE-PETITION LIABILITIES | 49,507,349.93 | 64,797,796.63 | 30,535,949.40 | 341,257,754.68 | 1,412,394,464.29 | |||||||||||||||
| Due to Debtors | 3,666,282.00 | 42,549.07 | 44,193.91 | 33,838,052.39 | 66,486,435.85 | |||||||||||||||
| Due to non-Debtor MGI subsidiaries | — | — | — | 386,111.79 | 749,753.67 | |||||||||||||||
| Deferred income taxes | — | — | — | — | 12,793,702.00 | |||||||||||||||
| Deferred rent | — | 210,381.80 | — | — | 355,578.72 | |||||||||||||||
| STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||||
| Common stock | — | — | — | 935,403.55 | 936,403.55 | |||||||||||||||
| Additional paid-in capital | 4,187,009.00 | 2,575,167.27 | 3,594,163.08 | 522,497,846.03 | 537,122,428.90 | |||||||||||||||
| Retained earnings (accumulated deficit) | (57,542,999.39 | ) | (66,522,169.48 | ) | (33,969,060.64 | ) | (203,651,654.22 | ) | (691,203,843.48 | ) | ||||||||||
| Postpetition contributions (distributions) (draws) (7) | — | — | — | — | — | |||||||||||||||
| Treasury stock | — | — | — | (9,783,034.77 | ) | (9,783,034.77 | ) | |||||||||||||
| TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | (53,355,990.39 | ) | (63,947,002.21 | ) | (30,374,897.56 | ) | 309,998,550.59 | (162,928,045.80 | ) | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 65,835.59 | $ | 1,243,267.75 | $ | 265,567.20 | $ | 687,177,471.89 | $ | 1,336,454,317.73 | ||||||||||
Page 8 of 12
| In re: | Case No. 09-10465 (KG) | |
| Midway Games Inc., et al., | Jointly Administered | |
| Debtors | Reporting Period: 7/1/09 to 7/31/09 |
| (1) | Each individual entity’s balances are presented in their respective columns: this “Total of All Debtors” column is provided to show the balances of the combined Debtor entities as a whole for information purposes only. | |
| (2) | Certain accounts receivable, not of allowances and specific deductions, plus certain inventory, prepaid expenses and property and equipment, all previously owned and recorded by the Debtors, were sold to WBEI on July 10, 2009. | |
| (3) | As a result of the sale of assets to WBEI, capitalization of product development costs ceased and capitalized product development costs were reversed to expense. | |
| (4) | As a result of the sale of assets to WBEI, the remaining net assets of the Debtors were determined to have a value of zero; therefore, all goodwill was expensed. | |
| (5) | Investment in subsidiaries represent amounts invested by certain MGI subsidiaries in other MGI subsidiaries. Negative amounts are reported in this line item by the investee subsidiary to represent the amounts invested in that subsidiary. | |
| (6) | Insiders are defined as directors and officers of any Debtor entities or non-Debtor MGI subsidiaries. There were no amounts due to Insiders outside of the normal course of business as of July 31, 2009. | |
| (7) | Accrued compensation and related benefits exclude amounts owed as of the petition date for paid time off, severance, relocation and supplemental insurance; these amounts are included in the Pre-petition Liabilities section. Certain amounts have been paid post-petition related to these pre-petition amounts owed. The accruals for paid time off fluctuate based on employees’ usage of paid time off earned. Also, the amount reported by Midway Studios — Los Angeles represents relocation amounts owed that are reported as pre-petition liabilities by MHE, as the employees affected were (as of the petition date, and continue to be to the extent they have not been terminated) employees of MHE. Similarly, the liability for paid time off for MGI employees is recorded by Midway Amusement Games, LLC (MAG), but is reported as a pre-petition liability by MGI. In both of these instances, accrued compensation and related benefits reported by the Debtor entitles that incurred the liability have been reduced by these amounts as a result. | |
| (8) | Pre-petition liabilities as of the current balance sheet date include post-petition amounts paid or applied, pursuant to Bankruptcy Court orders, to claims previously reported as of the petition date in the Schedules of Assets and Liabilities. |
Page 9 of 12
| In re: | Case No. 09-10465 et seq. (KG) | |
| Midway Games Inc., et al., | Jointly Administered | |
| Debtors | Reporting Period: 7/1/09-7/31/09 |
| 9/22/09 | /s/ Ryan G. O’Desky | |||
| Date | Ryan G. O’Desky | |||
| Chicago, Illinois | Chief Financial Officer and Treasurer | |||
| 1 | The Debtors use Ceridian, a third party payroll processor, for the remittance of payroll taxes. Ceridian is responsible for remitting both the employee and employer portion of payroll tax liabilities to the appropriate jurisdictions. Moreover, by first day orders entered by the Court on February 13, 2009, the Debtors received authority to pay certain prepetition payroll and “trust fund” taxes. |
Page 10 of 12
| In re: | Case No. 09-10465 (KG) | |
| Midway Games Inc., et al., | Jointly Administered | |
| Debtors | Reporting Period: 7/1/09 to 7/31/09 |
| Number of Days Past Due | ||||||||||||||||||||||||
| Current | 0-30 | 31-60 | 61-90 | Over 90 | Total | |||||||||||||||||||
| Accounts Payable | $ | 41,384.40 | $ | 186,408.71 | $ | 51,382.10 | $ | 19,497.48 | $ | 46,109.54 | $ | 344,782.23 | ||||||||||||
| Professional Fees 1 | $ | 0.00 | $ | 0.00 | $ | 38,256.07 | $ | 0.00 | $ | 43,466.45 | $ | 81,722.52 | ||||||||||||
| Total Postpetition Accounts Payable | $ | 41,384.40 | $ | 186,408.71 | $ | 89,638.17 | $ | 19,497.48 | $ | 89,575.99 | $ | 426,504.75 | ||||||||||||
| 1) | Includes $35,000.00 to FD-Ashton Partners, $22,344.35 to Huron Consulting and $24,378.17 to Richards, Layton & Finger for Restructuring Professional Fees not included on MOR-1b because the Debtors are not yet authorized to pay these amounts. |
Page 11 of 12
| In re: | ||
| Midway Games Inc., et. al., | Case No. 09-10465 (KG) | |
| Debtors | Jointly Administered | |
| Reporting Period: 7/1/09 to 7/31/09 |
| ACCOUNTS RECEIVABLE RECONCILATION | Amount | |||
| Total trade accounts receivable at the beginning of the reporting period | $ | 13,660,635.62 | ||
| + Amounts billed during the period | 704,468.06 | |||
| - Amounts collected and adjusted during the period | (768,907.80 | ) | ||
| - Amounts sold to third parties during the period | (13,951,730.52 | ) | ||
| Total trade accounts receivable at the end of the reporting period | ($355,534.64 | ) | ||
| ACCOUNTS RECEIVABLE AGING | Amount | |||
| 0 - 30 days old | ($400.00 | ) | ||
| 31 - 60 days old | (176.00 | ) | ||
| 61 - 90 days old | 2,444.00 | |||
| 90 + days old | (357,402.64 | ) | ||
| Total trade accounts receivable | (355,534.64 | ) | ||
| Royalty receivables | 575,765.43 | |||
| Other receivables | 77.27 | |||
| Allowance for doubtful accounts | (387,933.86 | ) | ||
| Net receivables | ($167,625.80 | ) | ||
| 1) | All trade accounts receivable and related allowances are reported at Midway Home Entertainment Inc. | |
| 2) | Trade accounts receivable are aged from invoice date based on individual customer credit terms. | |
| 3) | Royalty receivables are not aged and are reported at Midway Amusement Games, LLC. | |
| 4) | Receivable allowances are not aged. | |
| 5) | All trade accounts receivable from customers with invoiced amounts outstanding, net of discounts and allowances, were sold to Warner Bros. Entertainment Inc. on July 10, 2009. The remaining trade accounts receivable amounts relate to customers for which only credit memos and/or outstanding price protection remained that had not been previously applied to invoices. |
| Must be completed each month | Yes | No | ||
| l. Have any assets been sold or transferred outside of the normal course of business this reporting period? If yes, provide an explanation below. | X — see (1) below | |||
| 2. Have any funds been disbursed from any other account than a debtor in possession account this reporting period? If yes, provide an explanation below. | X | |||
| 3. Have all post petition tax returns been timely filed? If no, provide an explanation below. | X | |||
| 4. Are workers compensation, general liability, and other necessary insurance coverages in effect? If no, provide an explanation below. | X | |||
| 5. Has any bank account been opened during the period? If yes, provide documentation identifying the opened account(s). If an investment account has been opened provide the required documentation pursuant to Delaware Local Rule 4001-3. | X |
| (1) | Pursuant to a sale order previously approved by the Bankruptcy Court, the Debtors sold substantially all of their assets to Warner Bros. Entertainment Inc. on July 10, 2009, for approximately $49 million in cash plus other consideration. |
Page 12 of 12
