Today, Acclaim released its earnings for the financial year ending March 31, 2004. The figures were grim: The company reported a net loss of $56.4 million for its 2004 fiscal year, with net revenues down $67.4 million from the previous year ($142.7 million versus $210.1 million).

While the FY2004 net loss was slightly less than that of FY2003's $84.8 million shortfall, it contained a disturbing trend. Nearly half Acclaim's losses--$25.4 million--were during the quarter that ended March 31, 2004. The shortfall also came despite the fact that the company raised $15.0 million by selling off convertible subordinate notes, short-term bonds convertible to stock, 16 percent of which it has since defaulted on.

Acclaim has also borrowed $5 million in short-term loans from GMAC Commercial Finance, General Motor's investment-banking arm. In May and June, Acclaim negotiated a series of loan extensions with GMAC, which will now expire on August 4. After that date, GMAC will no longer lend Acclaim any more capital, meaning it must find an alternate source of financing.

Acclaim's report says that it has "entered into a letter of intent with a proposed new lender for a $30.0 million asset-based credit facility, with an equity component, to replace the credit agreement with GMAC." However, the report does not name the lender, and it clearly states that, "there can be no assurance that the new credit facility or any other banking facility will be consummated."

What happens if this deal falls through? By Acclaim's own account, the consequences would be dire. "Failure to obtain a new banking facility would materially adversely affect the Company's operations and liquidity, and the Company could be forced to cease operations or seek bankruptcy protection." This scenario, according to the report, could see "the sale of assets or the consolidation or closing of certain operations, additional staff reductions, and the delay, cancellation, or reduction of certain product development and marketing programs."

Despite all the doom and gloom contained in the report, analysts still hold out some hope for Acclaim's future. "Acclaim shares remain a speculative investment until management demonstrates its ability to execute on its strategy of making fewer, higher quality games," said Michael Pachter of Wedbush Morgan, "[but] we believe that the company has a respectable lineup of games planned for release in FY05."

Besides the just-released Showdown: Legends of Wrestling, the titles Acclaim plans on shipping in the year are: 100 Bullets (fall 2004 - PS2, Xbox), Juiced (fall 2004 - PS2, Xbox, PC), The Red Star (fall 2004 - PS2, Xbox), Worms Forts: Under Siege! (fall 2004 - PS2, Xbox, PC), ATV Quad Power Racing 3 (winter 2005 - PS2, Xbox), Emergency Mayhem (winter 2005 - PS2, Xbox), and The Last Job (winter 2005 - PS2, Xbox). Acclaim is also publishing the remake of The Bard's Tale internationally.

Noticeably absent from Acclaim's summer release schedule is Combat Elite: WWII Paratroopers, the PlayStation 2 and Xbox WWII shooter that was to be released in mid-July. The game, originally titled Airborne, was to be published by Interplay until BattleBorne took it to Acclaim. When Interplay filed suit in Los Angeles against BattleBorne in March, Acclaim reps said the game would be released in summer 2004 regardless. However, this morning, an Acclaim staffer told GameSpot that the game was "definitely delayed" and gave no tentative release date.