Publisher Zoo Entertainment has made a full move to digital distribution and removed itself from the retail console business, while also completing a $1,675,000 private placement financing.
The company previously reported profits
in 2010, with 95 percent of its releases being retail Wii and DS titles. However, the company also expressed a desire to focus more on digital distribution in 2011.
It has now entered into a distribution agreement with an unnamed "distributor of interactive entertainment software", providing its legacy console assets. Zoo expects the agreement to generate "significant revenue and cash-flow" for the company in 2011 and 2012.
Mark Seremet, CEO at Zoo Entertainment, explained, "This distribution agreement allows us to monetize our legacy assets. Moreover, it effectively removes Zoo from its retail console business and positions the company to focus on the faster growing digital segment of the marketplace."
"It also allows us to better align our cost structure by optimizing our headcount for a digital-only business. We believe that focusing on our digital business, coupled with the revenues associated with the distribution agreement and new digital releases, including more than 30 SKUs during the remainder of the year, should allow the company to significantly improve its balance sheet and cash-flow position over the next three quarters."
The company also announced that it has completed a $1,675,000 private placement financing with "insiders, institutional and other accredited investors."
The net proceeds from the placement, which come to around $1.6 million, will be used to drive and expand the company's digital strategy, including the launch of a new indiePub shop model.