Following the successful release of Evil Genius in October 2004, the Company has been working on a very innovative game for a major US software and games publisher for the past couple of years. This project was recently cancelled due to the perceived high-risk profile of the endeavour. Elixir also has a number of promising original prototypes at various stages of development but the Board of Directors feel that the current risk averse publishing climate, in the run up to the launch of next generation platforms, virtually precludes the signing of any original IP (which is not already part of a well-established franchise or license), without an unreasonably large strategic investment in the project by the developer themselves.

In light of the above, and the current financial and market conditions, the Directors have taken the decision to use a part of the cash resources held by the Company to treat its employees in a professional manner by paying redundancy packages to everyone and to allow an orderly wind-down of operations.