CMON Posts April Update
The Coronavirus outbreak has affected everyone on the planet in some way or another. The gaming industry, in particular, has been hit hard as manufacturing centers, shipping centers, and gaming stores have slowed down or closed during this time. As such, CMON has posted an update about how things are going with them, hoping to dispel some rumors that have cropped up recently.
From the post:
Despite the ongoing COVID-19 crisis, it is business as usual at CMON (or as usual as possible given the lockdowns implemented in various locations globally). We have fulfilled (or are in the process of fulfilling) 37 Kickstarter projects to date with a spotless record and will continue to do so.
Some of you may have read about our public announcement where we have a legal requirement to report on any issues we face as a public company. We are aware that there are articles incorrectly attributing meaning to “going concern” that may not be wholly accurate.
“Going concern” is a highly technical accounting term referring to a situation where net current liabilities are greater than net current assets. This happens for CMON from time to time since we record funds received from Kickstarter as both a liability and an asset – the money is an asset we received from our backers, but it is also a liability we owe to them that is not fulfilled until we ship our products. Since we use the funds to pay for molds, production and development of those products, and some of these are considered “Non-Current assets”, the asset column goes down as we use the money to fulfill the development of the game. Once we ship the game, the project goes back into the black because we can take the liability for the Kickstarter funds off the books.
The tricky part is when this crosses a financial reporting year, which happens often for Kickstarter projects, and if that happens it automatically triggers this technical nomenclature, and if you review our prospectus you will see we have reported this in the past.
This accounting treatment has nothing to do with the underlying strength of the company or our ability to make games and deliver them to you. Please rest assured that despite the current state of the world, CMON is and will be in the business of making great games for many years to come.
