After posting loss, GameTech looks to raise fresh capital

GameTech International Inc. needs additional money to keep afloat during the next year, the Reno-based company said in a filing with the Securities and Exchange Commission last week.

The maker of electronic bingo and video lottery systems said it hasn't been able to line up additional commitments for funding. In its filing with the SEC, publicly held GameTech cautioned that it's unlikely to get out of default on its debt any time soon.

GameTech's headquarters building in South Meadows is on the market in an attempt by the company to raise cash, and executives said they're looking to see if other assets might be sold.

The company is in default on a loan of approximately $27.2 million from U.S. Bank and Bank of the West, although the banks have agreed that they won't yet begin exercising their rights such as foreclosure when a borrower defaults.

Cash on the company's balance sheet on August 1 totaled $683,000, down from $3.3 million a year earlier.

GameTech reported last week that it posted a net loss of $3.9 million in the quarter ended August 1, which compares with a loss of $91,000 in the comparable period a year earlier.

For the for the nine months ended August 1, the company recorded a loss of $19.9 million compared with a loss of $842,000 a year earlier.

Sales during the nine months fell to $25.5 million from $36.7 million a year earlier as bingo halls across the United States closed in the face of the recession.

The company lost $901,000 on its bingo operations during the quarter ended August 1.

At the same time, GameTech said its administrative costs were rising, largely because it needed to hire outside legal and financial help to work through its struggles.

Its building at 8850 Double Diamond Parkway was purchased for $7.2 million in 2008, but GameTech wrote down the value of the building on its books by about $2.9 million.

The company also said it faced an additional cost of $400,000 last year after it reduced its staff.