SOURCE: Majesco Entertainment

Majesco Entertainment

August 07, 2015 08:00 ET

Majesco Issues Letter to Shareholders

SOUTH PLAINFIELD, NJ--(Marketwired - Aug 7, 2015) - Majesco Entertainment (NASDAQ: COOL)

Dear Majesco Shareholder:

As you know, over the past few years Majesco Entertainment has had significant success with its "Zumba Fitness" and other titles. With the rapidly changing landscape of connected gaming, we have faced increasingly challenging market conditions while watching the high risk retail gaming business diminish in importance. Accordingly, I am writing to update you on the progress of Majesco Entertainment as it has reduced its exposure to the retail market with a renewed focus on the download gaming business, which has come to dominate the market. With new titles like "Glue" and "A Boy and His Blob," and classic games like "BloodRayne," "Slender," and "Costume Quest 2," we will continue to maintain our presence in gaming, while also looking ahead for new strategic opportunities that may be unrelated to our historical markets. We have reduced our headcount dramatically, and our cash burn, in order to focus on the download business, which is essentially a royalty business where games are downloaded from servers maintained by game companies, such as Valve, Microsoft, Sony and Nintendo. We currently have just five full time employees and recently announced additional changes to our board of directors and senior management team. As we adjust to our new business model, we expect that our future quarters will be breakeven to profitable. We continue to explore new distribution channels and are working with developers to increase these numbers and further reduce costs.

During the next two quarters, we expect to launch two new exciting titles: "Glue" and "A Boy and His Blob." These games will be launched on all next generation consoles and in some cases, PC. More info to come on these titles as they get closer to launch.

We have taken significant steps to repurpose our assets and significantly reduce our liabilities that were established solely to support our presence as a distributor of retail games for systems sold by Microsoft, Sony and others. Now that we have elected to exit from that channel, these liabilities and the costs associated with retail products have diminished.

As of July 31, 2015, our cash position remains extremely strong with approximately $8.5 million in cash and receivables on our balance sheet, and $9 million in escrow from our recent financings. As previously reported, we have obtained shareholder approval for the financings, and the escrow funds should become available to us upon agreement of the investors or upon closing of an approved acquisition.

I am proud to report these results to you and that after a difficult market we have navigated Majesco onto a sound foundation for the future. However with these changes, I have also decided that a change in my relationship with the Company was in order. After giving serious consideration to many alternatives, I have agreed to continue a relationship with the company my family founded as a consultant developing further the download market while assuming responsibility for the costs of the retail market unencumbered with the costs of running a public company. As a result, on July 27 we appointed David Rector, a seasoned executive, to the position of Chairman and CEO, and I look forward to working with David towards a new future for Majesco and further success in its new business model.

Sincerely,

Jesse Sutton

About Majesco Entertainment Company

Majesco Entertainment Company is an innovative developer, marketer, publisher and distributor of interactive entertainment for consumers around the world. Building on more than 25 years of operating history, the company develops and publishes a wide range of video games on console, handheld and mobile platforms, as well as digital networks through its Midnight City label. Majesco is headquartered in Plainfield, NJ and the company's shares are traded on the Nasdaq Stock Market under the symbol: COOL. More info can be found online at majescoent.com or on Twitter at twitter.com/majesco.

Safe Harbor

Some statements set forth in this release contain forward-looking statements that are subject to change. Examples of forward-looking statements include statements relating to industry prospects, our future economic performance including anticipated revenues and expenditures, results of operations or financial position, and other financial items, our business plans and objectives, including our intended product releases, and may include certain assumptions that underlie forward-looking statements. Statements including words such as "anticipate," "believe," "estimate" or "expect" and statements in the future tense are forward-looking statements. These statements are subject to business and economic risk and reflect management's current expectations, and involve subjects that are inherently uncertain and difficult to predict. The risks and uncertainties which could cause our results to differ materially from our expectations and plans are included in our risk factors described in our filings with the SEC, including our Annual Report on Form 10-K. The Company does not undertake, and specifically disclaims any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.