Phantom Entertainment
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| Phantom Entertainment | |
|---|---|
 |
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| Type | Public (Pink Sheets: PHEI) |
| Founded | 2002 |
| Headquarters | Seattle, Washington |
| Key people | Greg Koler, CEO Tim Roberts, Chairman of the Board |
| Industry | Video game consoles and peripherals |
| Products | Phantom Lapboard Phantom Gaming Service |
| Revenue | None, development stage company |
| Employees | 3, as of July 2007 [1] |
Phantom Entertainment, Inc (Pink Sheets: PHEI), formerly known as Infinium Labs, is a company that was supposedly developing a new video game console called the Phantom, which went through several supposed revisions before being cancelled in February 2006. As of September 2006, the company was promising to introduce its "Lapboard" product in November 2006, with a gaming service to follow in March 2007.[1] The "Lapboard" has still yet to ship as of June 2008.
Infinium was founded by Tim Roberts in 2002. Tim Roberts left the company in the summer of 2005 with millions of shares of stock but before delivering any products. Roberts later rejoined the company as Chairman of the Board but resigned on July 10, 2007 to pursue other opportunities. In August 2005 Kevin Bachus became CEO but left in November 2005. Greg Koler, previously the company's European director and consultant, was appointed interim CEO.[2] Later, on January 11, 2006, Greg Koler was elected as full time CEO.
The Phantom was promised to be, in essence, a personal computer, made of off-the-shelf components and hardware. Infinium claimed that it would be able to play games streamed over the Internet through a broadband connection for a monthly fee.
Opinions amongst the Internet gaming and business community were mixed. The popular webcomic Penny Arcade was vocally and ferociously critical of the company and its flagship product.[3][4][5][6][7].
In February 2007 computer company Alienware, now owned by Dell, ordered a shipment of the Lapboards for inclusion with a line of media center PC's, supposedly to be on sale in February 2007 but as yet unavailable as of March 2008. [2]
On August 22, 2007, Phantom Entertainment signed a deal with ProGames network to provide Lapboards and "Game Service Content" in hotels worldwide.[8]
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[edit] Legal controversies
[edit] HardOCP lawsuit
Steve Lynch wrote a less-than-positive report[9] on the company and its founder that was posted in September 2003 at HardOCP, a computer hardware news website.
On February 19, 2004, Infinium Labs' lawyers sent a cease and desist letter to the editor of HardOCP demanding that the news site take down the article, claiming that it "painted a portrait of a company intent on swindling the public", threatened to file a defamation suit. Rather than concede to the demands, HardOCP owner Kyle Bennett filed a lawsuit for a declaratory judgement stating that they had done nothing wrong. Infinium Labs then filed suit in Florida and denied jurisdiction was proper in Texas, even though they had previously maintained a staffed office in Richardson, Texas (which had by then been closed).[citation needed]
In mid-September 2004, the judge on the case ruled that Infinium Labs must produce several financial documents (including Roberts' personal income tax returns) by the end of the month. Infinium Labs failed to produce the required documents and subsequently faced a court order compelling them to do so. Infinium Labs was informed that sanctions would be awarded to KB Networks and Kyle Bennett in an amount to be determined by the court, later reported to have been $50,000. In settlement, Infinium Labs dropped the co-pending Florida suit but it was claimed that HardOCP's owners and parent company KB Networks had to pay over $200,000 in legal fees to reach that conclusion.
[edit] Other controversies
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This section may contain an inappropriate mixture of prose and timeline. |
On October 31, 2005, it came to light that the Securities and Exchange Commission have given notice to Tim Roberts, chairman of Infinium Labs' board of directors, that charges were being planned against him for violating unspecified federal securities laws.[10] In its statement on the notice, Infinium revealed that the company was not notified of the specific charges alleged against Roberts but that it suspected they were related to an SEC investigation that had revealed phony fax scams, where several penny stocks -- Infinium among them -- were unlawfully promoted to investors.
On October 31, it was also revealed that while Tim Roberts was CEO of Infinium, the company failed to report a large amount of interest and penalties on unpaid payroll taxes. From its inception Infinium has also consistently reported very small amounts of cash on hand and large (and growing) debt.
On November 17, 2005, Kevin Bachus, CEO of Infinium, handed in his resignation[11] as CEO of the company to take a position at another (undisclosed) company. (It was later revealed that Bachus had been appointed CEO of game developer Nival Interactive.[citation needed]) Infinium's board of directors accepted it the next day and elected Greg Koler, a consultant for Infinium as interim CEO and President.
On January 11, 2006, Greg Koler was confirmed as Infinium's CEO and President.[12]
On January 25, 2006, Infinium Labs reached an agreement to borrow up to $5,000,000 from the investment group Golden Gate Investors to finance the manufacturing process of the Phantom Lapboard, which is due for release later this year. If fully exercised this will be the largest amount of money borrowed at once to date by Infinium Labs. The loan would be paid over a period of 3 years, and can be converted into common stock and sold to pay it off that way.[13]
On February 21, 2006, it was revealed that the Phantom gaming console was put on hold indefinitely. It was also revealed in an SEC filing that Infinium had lost over $62.7 million in 3 years, over half of which was spent on marketing the company and its products which have not yet made it to market. Over $24 million was spent on salaries and consultants with only $2.5 million going towards development. Infinium claimed that they still intended to release their "Lapboard" if their financial situation improved.[14] The "Lapboard" repeatedly missed release dates of the second quarter of 2006, October 2006 and November 2006. [3]
On May 24, 2006, Infinium Labs filed a proxy statement[15] inviting their shareholders to come to Tampa Airport Marriott Hotel in Tampa, Florida on July 13, 2006 to vote on a proposal that would change the company's current name from "Infinium Labs" to "Phantom Entertainment", to authorize an issue of 600,000,000 more shares of common stock, valued at $0.001 apiece, and finally, to re-ratify its independent auditors, Webb & Company, P.A., for the rest of the fiscal year.
On August 15, 2006, Phantom Entertainment removed all references to the Phantom Game Receiver from its website. They continued to claim that the content delivery system targeted for the Phantom would be made available for PCs running Microsoft Windows XP / Media Centre.[16]
On September 13, 2006, the company announced that the downloadable game service would be released in March 2007, and that their "lapboard" would come out in November 2006.[1]
In early November 2006, the lapboard was delayed once again, claiming that "major manufacturers of media center PCs and distributors" are placing so many orders that the company won't be able to "begin air shipments to the US" until February 2007.[citation needed]
[edit] SEC allegations
On May 16, 2006, the Securities and Exchange Commission (SEC) accused company founder and former CEO Timothy Roberts of running a pump and dump financial fraud scheme.[17] Among the major allegations was that, in late-2004, Roberts paid a promoter to send thousands of junk faxes falsely claiming plans to launch the system in January 2005. The resulting buzz drove Infinium Labs' stock up. For the work, Roberts paid the promoter $200,000 of company money and gave him 4 million shares of restricted stock without registering the transfer with the SEC. Meanwhile, Roberts sold more than 1.3 million shares of his own stock, often without reporting the transactions with the SEC, making a profit of $422,500. Both activities violate federal securities laws. Roberts could face a fine and could be barred from serving as an officer in a public company ever again.
[edit] Notes
- ^ a b "Surprise! Phantom Delays Game Service Again"
- ^ Svensson, Christian. "Bachus Quits Infinium", 2005-11-21. Retrieved on 2006-07-23.
- ^ Glaximus, Jim. Phantom Impressions. Penny Arcade. Retrieved on 2006-07-23.
- ^ I Hate The Stupid Phantom. Penny Arcade (2003-08-20). Retrieved on 2006-07-23.
- ^ Stop Pretending You're A Real Company. Penny Arcade (2004-02-23). Retrieved on 2006-07-23.
- ^ The Precise Location Of Villainy. Penny Arcade (2004-03-03). Retrieved on 2006-07-23.
- ^ Good Money After Almost Incalculably Bad. Penny Arcade (2006-01-30). Retrieved on 2006-07-23.
- ^ Phantom Entertainment Signs with ProGames Network to Place Phantom® Lapboard and Game Service Content in Hotels Worldwide. BusinessWire (2007-08-22). Retrieved on 2007-08-23.
- ^ Lynch, Steve. "Behind the Infinium Phantom Console", HardOCP, 2003-09-17. Retrieved on 2006-07-23.
- ^ Sinclair, Brendan. "Phantom maker in hot water with SEC", GameSpot, 2005-10-31. Retrieved on 2006-07-23.
- ^ Change in Directors or Principal Officers, Appointment of Directors or Principal Officers. Form 8-K. Infinium Labs (2005-11-17). Retrieved on 2006-07-23.
- ^ Sinclair, Brendan. "Koler named CEO and president of Infinium Labs", GameSpot, 2006-01-11. Retrieved on 2006-07-23.
- ^ Klepek, Patrick. "Infinium Bags $5 Million", 2006-01-25. Retrieved on 2006-07-23.
- ^ Sinclair, Brendan. "Infinium opens the books", GameSpot, 2006-02-21. Retrieved on 2006-07-23.
- ^ Schedule 14A Information. Infinium Labs (2006-05-24). Retrieved on 2006-07-23.
- ^ Phantom console disappears. The Inquirer (2006-8-16).
- ^ Chris Morris, 'Phantom' video game CEO charged with pump and dump scheme, CNN/Money, May 16, 2006, Accessed on May 17, 2006.
