The Company's current business strategy emphasizes the sale of a fewer number of products, while representing a more diverse range of products, e.
Historically, a significant portion of the Company's sales has been concentrated in a few large retail customers.
Most of the Company's retail customers operate on a purchase-order basis and the Company does not have long-term contracts with its retail customers. While management considers the Company's relationships with its major retail customers to be good, the loss of one or more of its major retail customers would have an adverse effect on the Company's results of operations.
The Company is dependent on suppliers for the components and parts that it assembles to produce its products. The Company generally purchases the specific LCDs or semiconductor chips for any particular product model from a single supplier. While the Company believes that there are alternative sources for all of its supplies, an interruption of the supply of LCDs, semiconductor chips or other supplies from a supplier could result in significant production delays.
The Company makes use of subcontractors as part of its manufacturing process. This exposes the Company to risks of delay or quality control problems at the subcontractors. In recent periods the Company has experienced delays from a number of suppliers in the delivery of chips used in producing the Company's games. To date, the delays have not been material. However, they may indicate that chips supplies generally are tightening, and the Company may experience further delays in receipt of chips or other necessary components from these or other suppliers.
Delays in receipt of essential components for the Company's products may be significant to the Company's financial results in that sales of products by the Company may be delayed, or in certain cases may be canceled, if the Company is unable to meet delivery schedules to its customers in a timely fashion in order for its customers to meet targeted selling seasons.
The Company is unable to predict the extent or impact of delays from its suppliers beyond the actual delays, as mentioned above, that have recently been experienced. A disruption of operations at the Factory due to fire, labor dispute, dispute with the local government or otherwise, would have an adverse effect on the Company's results of operations.
In such event, the Company believes that it could partially mitigate the effect of a disruption by increasing the use of subcontractors to assemble its products, but there can be no assurance that it would be able to do so. In addition, the Company's manufacturing facilities are dependent on the Company's relationship with the local government.
In order to sustain growth, Radica intends to expand into related businesses, including original product manufacturing of products for third parties. To date these efforts have only been successful in the case of the manufacturing for the Hasbro Games Group. While several of the Company's executive officers have extensive experience in manufacturing other products in the United States, including Mr. Davids, there can be no assurance that the Company will be able to also perform OEM manufacturing in China successfully.
The Company's Pub Poker business was not successful and has been discontinued. The success of the Company is substantially dependent upon the expertise and services of Mr.
Robert E. The loss of the services of Mr. Davids would have an adverse effect on the Company's business. The Company maintains a "key man" life insurance policy on Mr. The Company experiences a significant seasonal pattern in its operating results and working capital requirements. The Company typically generates most of its sales in the third and fourth quarters of its fiscal year, prior. The Company expects this seasonal pattern to continue for the foreseeable future but to become less pronounced as retailers increasingly sell its products year round and OEM orders increase.
The Company's operating results may also fluctuate during the year due to other factors such as the timing of the introduction of new products. The market price of the Common Stock may be subject to significant fluctuations in response to variations in quarterly operating results and other factors. The gifts and games business is highly competitive. The Company currently faces direct competition from a number of other producers of handheld electronic games, the barriers for new producers to enter into the Company's markets are relatively low and the Company expects that it will face increased competition in the future.
Some competitors offer products at lower prices, are better established in the toy and games industry and are larger than the Company. In addition, with respect to OEM manufacturing, the Company will compete with a number of substantially larger and more experienced manufacturers. From time to time, other companies and individuals may asset exclusive patent, copyright, trademark and other intellectual property rights to technologies or marks that are important to the electronic handheld and mechanical games industry generally or to the Company's business specifically.
The Company has recently been contacted by a Japanese company which has asserted that certain of the Company's electronic games may infringe patents of such other company. The Company has only begun to evaluate this matter. The Company will evaluate each claim relating to its products and, if appropriate, will seek a license to use the protected technology.
There can be no assurance that the Company will be able to obtain licenses to intellectual property of third parties on commercially reasonable terms, if at all. In addition, the Company could be at a disadvantage if its competitors obtain licenses for protected technologies on more favorable terms than does the Company.
If the Company or its suppliers are unable to license protected technology used in the Company's products, the Company could be prohibited from marketing those products or may have to market products without desirable features. The Company could also incur substantial costs to redesign its products or to defend any legal action taken against the Company.
If the Company's products should be found to infringe protected technology, the Company could be enjoined from further infringement and required to pay damages to the infringed party. Any of the foregoing could have an adverse effect on the results of operations and financial position of the Company.
The toy market is characterized by changing consumer preferences and frequent new product introductions which reduce the length of product life cycles. There can be no assurance that any of the Company's current products or product lines will be popular with consumers for any period of time. Furthermore, sales of the Company's existing products are expected to decline over time and may decline at rates faster than expected. The Company's success is dependent upon the Company's ability to enhance existing product lines and develop new products and product lines.
Historically, a significant portion of the gross sales each year were derived from new products. Failure of the Company's existing and new products and product lines to achieve and sustain market acceptance and to produce acceptable margins could have an adverse effect on the Company's financial condition and results of operations.
The Company cannot predict whether its tax rates will remain as low as they have been in the past as tax regulations and the application or interpretation thereof in the various jurisdictions within which the Company operates are always subject to change.
Occasionally in the toy industry successful products are "knocked-off" or copied. While the Company strives to protect its intellectual property there can be no guarantee that knock-offs will not have a significant effect on business. While the Company does full credit checks on all of its customers it cannot guarantee that any customer will not default on a payment of debt. Such a default could have a significant effect on the Company's results.
It is industry practice for retailers to hold back payments on slow moving stock or to request markdowns or returns on such stock. It is the Company's policy to only take back defective products and while the Company believes it will be able to enforce this policy under normal industry conditions, it may not be possible to enforce this policy in all cases, as was experienced with the downturn of the casino games market.
The Company's largest shareholders see "Item 4. Control of Registrant" including Mr. Davids, other directors and officers of the Company, a group that consists of Dito Devcar Corporation and certain related persons, a group that consists of RAD Partners, LLC and certain related persons, and the Hansen Trust, own beneficially in the aggregate a majority of the outstanding Common Stock. Assuming that they were in agreement, such persons would have the power.
The Company is a Bermuda holding company, and a substantial portion of its assets are located outside the United States. In addition, certain of the Company's directors and officers and certain of the experts named herein are resident outside the United States principally in Hong Kong , and all or a substantial portion of the assets of such persons are or may be located outside the United States.
As a result, it may not be possible for investors to effect service of process within the United States upon such persons, or to enforce against them or the Company judgments obtained in the United States courts predicated upon the civil liability provisions of the United States securities laws. Among other things, the Company understands that there is doubt as to the enforceability in Bermuda and Hong Kong, respectively, in original actions or in actions for enforcement of judgments of United States courts, of civil liabilities predicated solely upon the United States securities laws.
The Company currently has 20,, shares of Common Stock outstanding. Of such amount, the 7,, shares sold in the initial public offering, up to 1,, shares that have been or may be sold under a secondary shelf registration and an undetermined number of shares previously sold under Rule other than any shares purchased by "affiliates" of the Company are tradable without restriction. Substantially all of the remaining shares owned by existing shareholders are restricted securities under the Securities Act of , as amended the "Securities Act" and may be sold only pursuant to a registration statement under the Securities Act or an applicable exemption from the registration requirements of the Securities Act, including Rule thereunder.
Most of these restricted shares are currently eligible for sale pursuant to Rule , subject to the limitations of such rule.
In addition, the Company has granted to Mr. Davids and the Hansen Trust certain registration rights with respect to their shares. See "Interest of Management in Certain Transactions" No predictions can be made as to the effect, if any, that market sales of shares by existing shareholders or the availability of such shares for future sale will have on the market price of Common Stock prevailing from time to time. The prevailing market price of Common Stock could be adversely effected by future sales of Common Stock by existing shareholders.
Many currently installed computer systems and software products are coded to accept only two digit entries in the date code field. These date code fields will need to accept four digit entries to distinguish 21st century dates from 20th century dates. Although the Company believes that its systems are Year compliant, or will be by the Year , third parties with whom the Company does business, including suppliers of necessary components to the Company, may be affected by Year requirement issues which could result in an adverse effect on the Company's business, operating results and financial condition.
While the Company is using its best efforts to ensure that it has no business interruptions as a result of the Year computer problem, there can be no assurances that the Company will not suffer some disruption either as a result of its own systems or those of its suppliers or customers. See Item 1 "Manufacturing Facilities. The Company owns a 51 year leasehold on its executive offices 11, sq. Davids and to Mr. Howell, officers of the Company.
In November the Company signed agreements to expand its factory in Dongguan, Southern China in two phases. The first phase, due to be completed and usable by the end of May , will add , square feet of factory space and dormitory capacity to accommodate 1, additional workers.
The second stage to be completed by the end of August will. Ten purported class actions filed in various United States District Courts against the Company, various of its officers and directors, and the managing underwriters of the Company's initial public offering were consolidated in the United States District Court for the District of Nevada under the caption In re Radica Games Limited Securities Litigation, Master File No.
Plaintiffs filed a consolidated complaint on November 4, that superseded all the complaints in the individual actions. The named plaintiffs originally sought to represent a class consisting of purchasers of the Company's common stock in the initial public offering or in the open market from May 13 through July 22, and sought unquantified monetary damages and other relief against the defendants for alleged violations of Sections 11, 12 2 , and 15 of the Securities Act of , Sections 10b and Rule 10b-5 thereunder , 20 a , and 20A a of the Securities Exchange Act of , Sections As a consequence of an Order of the Court granting in part defendants' motion to dismiss the complaint and a stipulation of the parties, all of plaintiff's claims other than those arising under the Securities Act of , and limited to certain specified statements in the Company's registration statement, were dismissed without prejudice.
Pursuant to a stipulation of the parties, the Court provisionally agreed to treat the remaining claims as class claims. After the close of discovery, plaintiffs moved for leave to amend their complaint to add allegations with respect to an additional claimed omission in the registration statement.
Shortly thereafter, the Company moved for summary judgment seeking dismissal of the complaint. Following a hearing on July 31, , the District Court entered an Order i denying plaintiffs' motion to amend the complaint and ii granting the Company's and the other defendants' motion for summary judgment, and on August 9, the District Court entered final judgment dismissing the action.
Plaintiffs subsequently moved for reconsideration of the grant of summary judgment against them, and the court denied their motion. Plaintiffs filed a timely appeal to the United States Court of Appeals for the Ninth Circuit, and oral argument of such appeal was held on November 5, Wal-Mart USA Target USA Estona Incorporated Japan 9.
Kohl's USA 4. Toys 'R' Us worldwide 3. Hong Kong. Kasch W. Demise Against all odds, the Cube World survived 3 years and spanned 22 different cubes. Although Mattel tried to reignite the novelty factor by introducing the Mod series Series 5 and the Jumbo Cube Series, the crude game play and the relatively high asking price ended seriously affect the sales of the Cube World series. After , no other series were produced.
We have confirmed that Series 2, 3, 4 and Jumbo all add a Special Edition release. The Special Edition is virtually the same as the regular edition, but the opaque plastic of the cube is replaced by translucent plastic of the same color.
There is no information on how limited were the Special Editions compared to the regular edition. Sega Corporation is a worldwide leader in interactive entertainment both inside and outside the home, encompassing consumer business, amusement machine sales and amusement center operations. The company develops, publishes and distributes interactive entertainment software products for a variety of hardware platforms including PC, wireless devices, and those manufactured by Nintendo, Microsoft and Sony Computer Entertainment, Inc.
Publisher aims to expand its offerings of non-violent and cooperative entertainment games with the acquisition. PUBG maker files suit against app store owners and developer of "blatantly infringing" mobile game. About Codemasters Codemasters is a leading developer and publisher of best-selling interactive entertainment products for a global audience on current and future gaming platforms and channels.
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