Wednesday, August 19, 2009

Despite Solid Q2 2009 Earnings Artificial Life May Need Real Life Support

LA and Hong Kong based mobile games company Artificial Life (ALIF) posted another quarter of strong earnings last week. Revenues increased an impressive 38% over the same period last year and the company continues to be solidly profitable, with Net Income of $2.77mil... representing net margins that some of the bigger players can only dream about. The company sees potential for continued growth through expansion of activities in international markets, particularly China, where they recently became a subcontractor of China Telecom. Good stuff, BUT... I'm seriously concerned that their somewhat dire cash situation ($1.44mil) and a growing/lingering high level of outstanding receivables ($18.77mil) could jeopardize growth opportunities in the last half of 2009. The company issued a private placement of new shares in July to raise $1.9mil and is actively seeking additional investment.

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