Hoping to rustle up some cash flow to fund inventory and manufacturing for its Fall lineup, Midway will sell some of its accounts receivable to National Amusements Inc (NAI).
NAI is directed by Shari Redstone, who is also Midway's Board chair. The factoring agreement lets Midway sell up to $40 million in accounts receivable to NAI, to offset the cost of manufacturing its 2008 titles TNA Impact, Blitz: The League II
, and Mortal Kombat vs. DC Universe
Midway interim CEO Matt Booty said the agreement "underscores both our confidence in our franchises as well as the benefit of our relationship with National Amusements."
In its second fiscal quarter, Midway reported a $34.8 million net loss, more than doubling its losses year over year. It also saw a 26 percent drop in revenue year-over-year to $23.4 million.
The company expects things to turn around when they report their third fiscal quarter results at this month's end, projecting a revenue increase to $52 million.
Said Redstone, "With the additional resources provided through this agreement, I believe Midway will be well positioned to capitalize on the release of these highly anticipated products and lay the foundation for the growth of these franchises."