Game Discussions Star Citizen Discussion Thread v12
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I think they are. The next confirmation statement is due by 24 September 2025.
I think they pay them in JPGs.
Interesting that they calculate "depreciation" on it. How does that work?
It makes sense, I guess. That Gladius model would need special care to transport it now, in 5 years it goes into a bin.
I wondered about that. If they pay employees in ships for overtime, do they have to buy them in the shop first and push up the pledge counter?
Ooof, Ben is really feeling betrayed by Crobbers.
Tony's take on the limited liability by the auditors is that PwC asked for info but CIG didn't deliver everything they asked for, therefore PwC says they can only claim the report is accurate based on the information they were provided by CIG, they can't be held responsible for information that CIG did not provide.
Yeah that's two years in a row that PwC have essentially said: These guys are hiding something. Let it be known...
Here's shrach...
TLDR:
Summary. They increased sales by £3.5m. They got an extra £5m in tax credits. So we are up £8.5m.
Salaries increased by £22m. Admin expenses were up from £2m to £10m. They therefore reduced other cost of sales by £5.5m but more likely, things included in Admin this year, were in cost of sales last year.
This puts cost total up £22m + £8m- £5.5m = £24.5m increased costs. £24.5m less the increase in revenue of £8.5 = £16m swing from a £8m profit to £8m loss.
The main reason the profit has tanked so bad is of course salaries.
We did get this break down of revenue. I'm not sure if the EU/non-EU split is surprising or not? (This excludes USA income).
Obviously when you spend way more and you get a tax credit on how much you spend, you'll get bigger tax credits. However, since they acquired 100% of Turbulent we get a new entry by way of Canada tax credits.
We have a new disclosure here. Erin's salary got a nice little 10% raise. But who could be included in the other key management personnel? That last paragraph sure is a paragraph of words. I'll admit, "phantom" shares is a new one to me but looking at google it was a hot new thing in 2023. Basically like share options but there's no shares, it's all phantom as if there were share options.
Here we have a breakdown of the purchase of Turbulent.
How Turbulent was paid for, also a nice disclosure of how much turnover Turbulent had in the period 1 July 2023 to 31 December 2023. £375k. This makes sense since it won't include work done for CIG but will be for outside customers they had.
This is the ongoing disclosure that earns them a qualified opinion from the auditors. £30m to £45m that has many assumptions and estimates, but it's still a liability that should be included and isn't.
The post balance sheet is two separate items. The first part is $5m of new shares per filings. The second part is also £10m loan. I think we can now assume this trend of spending more than they receive continues into 2024 and might just be related to needing yet more cash in early 2025.
TLDR:
- The £8mil loss
- Canadian tax credits now in the mix too due to Turbulent aquisition.
- Loss mainly driven by rise in wages
- Revenue is split pretty evenly, ~50:50, across EU:rest of world
- After dropping in 2022 Erin's director pay bounced back up ~10%.
- There are now phantom shares for 'certain employees'. (IE options without that actual share. Pay out based on dividends or change of control)
- The £0.5m to the two Turbulent shareholders is in there.
- The £30-45m liability that 'isn't'.
- Assumes the 2025 loan is due to spending continuing to outstrip incomings.
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He got a few million for his shares to Infatrade and later sold his house in LA, didn't he? I don't see Chris doing a Francis Ford Coppola and taking out a mortgage on his home.
Old friend and lender Eli could be a candidate though.
Yep personal millions have flowed his way. Not sure if we ever got confirmation of a sale re the LA house did we? Either way, it's all probably within his means.
But yeah Eli could be in there as an option. Bridging loans are his thing...
An unseasonal negative Glassdoor from Austin-land...
1/5
Avoid at All costs
Game support
Former employee, more than 3 years
Austin, TX
Recommend
CEO approval
Business outlook
Pros
Opportunities for growth and advancement.
Cons
Poor management, employees are treated as disposable, seasonal crunch sessions are expected and company engages in unethical business practices.
Viajero
Volunteer Moderator
2023 and 2024 were record funding years. Yet CIG still needs a 10 mill loan (UK side) in 2025... Totally checks out.An existing shareholder has loaned them £10m. Payable Dec 31st 2027:
CIG´s explanation is rising wages costs... which does not make much sense. Bear with me.
Yes, Turbulent staff became CIG´s in 2023, and overall staff numbers probably went up. But at the same time expenses with 3rd parties must have gone down dramatically, and accordingly, aswell as CIG is not paying Turbulent services as en external company anymore. The cost of Turbulent as a 3rd party would have presumably included their staff wages aswell obviously.
In fact, one of the key reasons companies acquire key external parters is precisely to reduce costs... with the expectation to reduce overheads once everyone is under the same umbrella, perhaps even laying off actually redundant positions after the absorbtion etc. "Sinergy".
In other words, accounting wise CIG should have seen a cost base reduction, or at the very least a wash between increased wages and reduced third party costs. But not an increase.
Was there any other driver for cost increase in 2023 that we have not seen yet?
This would mean the Calders have agreed to push back their Q1 2025 put option 2 years. it does not make much sense.The Calder's have a new put option for 2027. Now pegged to 'within 30 days of the financial statements being delivered' instead of 'Q1'
(IE the FY2025 accounts are supposed to drop Dec 31st 2027 etc. The other minority holder seems to have had their put option brought forward from 2028 to 2027 as well?)
The way I read the text is that when they say "the financial statements being delivered for the year ended 31December 2025" they are actually referring to the document physically due at the end of 2025 I.e. the 2024 financials. Not the 2025 financials due by end 2026.
I wouldn’t think the Calders have agreed to delay their option 2 years straight. 1 year I can see it, if they got something juicy in return (what? by the way), but 2 seems too much / a mistake.
The auditors have a £5m cap on liabilities for this audit.
(Pretty sure this is new)
Jeebeezuz. How badly must CIG be (mis)representing these financials that the auditor feels the needs to protect itself against a lawsuit and related liability with a 5 mill cap?
The main party I can think of that could sue would be the investors. If the Calders and co feel they have not been given the right information or that CIG has misrepresented the information around their investments (revenue forcasts, due dates, financials in general) then CIG could be in a world of pain. Chris Roberts himself has a solid track history of alienating former partners, so it would not be surprising.
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Viajero
Volunteer Moderator
That just from the UK side of things? If yes, then presumably we need to double that for the US side?The Turb guys got 2 mil each up front in the buyout, and then £0.5m a year for a few years up to mid 2025. They took 'cash now' as their payback. (Which is sensible. But doesn't speak to huge confidence in the project.)
Quite the messaging mismatch isn't it
I think the US being missing is key here. If there's a corresponding reduction in US wages then overall their wage packet won't have boomed so much.
I'd imagine there's more to find in the new location costs if we dig...
I agree that wording is odd / ambiguous. They could mean the internal delivery of the accounts, not the publication.
But a renegotiated 'early 2027' deadline isn't that outlandish. That would be after any putitive SQ42 launch.
(If so: More fool Calders for continually sliding with CR's deadlines. But power to their arm, in that they've obviously got the leverage to renegotiate mid-contract.)
It's all good news for law citizen...
Yep would make sense. Turb boys are making bank. No wonder Benoit is so chipper
Viajero
Volunteer Moderator
(PwC actually included this last year too but we missed it. Possibly relates to the tracker? Or even CIG's financials blog itself?)
On this bit, I suspect they are just referring to manipulation of actual financials results in this very document. Not the blog. The auditors are not concerned with what happens elsewhere. Their work is strictly limited to qualify CIG´s own official financial filing.
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No, the UK side bought all of Turbulent. The cash payback to the founders is billed as wages, if I read that right.
Looks like they mean the report due by end of 2026 though. This report is "for the year ended 31 December 2023".
Chris talks a good game they believe, Erin delays the financial statement until the last day because the fax machine was broken or the dog ate it...
When a beard is both stupid and malicious.
Viajero
Volunteer Moderator
Wages going up is perfectly fine, expected even, given they acquired turbulent in 2023. The part missing is the info about external expenses. That chapter should have gone down overall in a very similar amount to the increase in wages. I am not sure we can see that in the UK filing though.
Viajero
Volunteer Moderator
I still do not think so. That would mean the Calders would have de facto agreed to push back their option windows 2 years from 2025 to 2027 and the 2028 one to 2030 aswell. No sense at all, imo. I think the text is meaning the actual document physically due at the end of that year (2025 or 2028) covering the previous year financials.
Either way such a push back would have not been for free for CIG, I wonder what did the investors get in return.