Frogster Interactive Pictures AG, international publisher of massively multiplayer online games with headquarters in Berlin and subsidiaries in Berlin, San Francisco and Seoul, has secured an extension of the license term from 5 to 8 years per an agreement with the developer and licensor of its main cash cow, the internationally successful massively multiplayer online game ‘Runes of Magic’. In the opinion of the management, this increases the shareholder value directly and notably.

Update on the Pool of Shareholders
The leadership of the shareholder pool has informed Frogster that that continuative talks with the interested buyer with the highest price indication of 20 to 23 Euro per share have not lead to coming closer. The potential buyer with the now highest bid has indicated a price of 18 up to 20 Euro per share and made the point that the price may be adjusted upward, if the due diligence should run positively. Today, the pool leader will ask the pool shareholders on whether they intend to sell the shares committed to the pool or a smaller number within this price range. The pool shareholders are requested to make a quick decision on whether the pool is to enter into more intensive negotiations with the potential buyer. In the event that the pool shareholders decide in favour of that, the management anticipates that shortly the already prepared due diligence will be performed shortly and afterwards negotiations on the exact terms of the transaction between potential buyer and shareholder pool will take place. Should such negotiations not be taken on by the shareholder pool or run fruitlessly, the pool will disband per June 30th as planned.

The Frogster management continues to take on a neutral position in the matter. An anchor shareholder from the circle of potential buyers could be beneficial for the company. On the other hand, the announced price per share may be judged rather low, at least with regard to the existing research coverage of several renowned stock market analysts on the fair value and with regard to the impending extension of the product portfolio by the recently newly licensed next generation Browser MMO Games.

Update on Frogster Asia
The 64% Frogster subsidiary Frogster Asia Co. Ltd. could yet again not reach an agreement on further cooperation with the Dutch licensor Spellborn NV regarding the intended enhancements and publishing of the free to play version of the MMO Game ‘The Chronicles of Spellborn’ in Asia and is thus forced to close down the development studio and to dismiss all staff who dealt with the free to play version by order of Spellborn NV. Herefrom arises an extraordinary negative P&L effect for the subsidiary which will have a negative impact to the group result in a small to medium six digit Euro amount. The Frogster Interactive management had informed the public several times before about the uncertain outcome of the ongoing talks. On the other side, Frogster Interactive will reclaim the paid prepayments for the product of a seven-digit Euro amount while it is unknown whether the developer could make such a payment. The company has already fully written off all prepayments on Frogster’s balance sheet regarding the game so that no noteworthy negative impacts from the balance sheet are impending.

Frogster Interactive will finance the further, not yet break-even operation of ‘Runes of Magic’ in Korea and, as already announced, the market launch of the MMO Game ‘Ghost Fighter’ which was recently newly licensed by Frogster Asia from the Chinese market leader Shanda and is scheduled for launch in autumn. This funding will be done per a shareholder loan to Frogster Asia in a medium six-digit Euro amount. At the same time, the holding company will receive a call option on for the acquisition of further stakes in Frogster Asia at face value.

Successful Launch of the third Chapter of ‘Runes of Magic’
Frogster has successfully launched the second expansion of its virtual world ‘Runes of Magic’, the third chapter called ‘The Elder Kingdoms’ and has domestically and internationally received enormous attention by the games press. The box version put on the retail shelf by a partner company parallel to the download version has instantly conquered first rank in the GfK charts in its price category regarding sold units. According to the Frogster management’s opinion, there is a good chance to reach a new monthly revenue record with item sales in ‘Runes of Magic’ in May.

For 2010, the company has set the target to almost double revenues to more than 25m Euro. The reachability of this target is backed up by the growing monthly revenues during the first four months of 2010. The management holds on to its profit target of 1.60 Euro per share after tax for the year 2010.