The waters surrounding Shroud of the Avatar continue to get muddier after a letter to investors of the game from equity crowdfunding platform SeedInvest was vaguely discussed by Catnip Games’ Chris Spears.
Readers will recall that in 2017, SOTA’s original company, the Richard Garriott-backed Portalarium, ran a nearly $800K equity crowdfunding investment round through SeedInvest. But Portalarium folded and transferred the game to Catnip in 2019 following a series of calamities, including layoffs, free-to-play, whaling, playerbase collapse, delayed rewards, Richard Garriott stepping down, the new CEO denying his role, and shuttered offices. As we have continued to cover ever since, Portalarium was legally bound to make reports to the SEC and SeedInvest but instead left its own non-accredited investors in the lurch. Last week, SeedInvest told backers Portalarium had failed to provide those required updates – the first time the platform had made any public statements about Portalarium’s delinquency at all.
Over the weekend, during the game’s most recent livestream (here’s the pared-down version in audio-only courtesy of Reddit), Spears attempts to explain the SeedInvest situation, claims that he’s been doing what is required by the funding platform as the current owner of the game, and assures gamers that Catnip Games “is still a company.”
According to Spears, Portalarium was not making any money and the SeedInvest funding round was started by someone else in the company as well as a CFO at the time. Spears even went so far as to claim that the SeedInvest made SOTA less profitable and insists the studio was caught up in “waves of stuff” including Kickstarter that “crippled” the game in a lot of ways; Portalarium was supposed to have a successful Facebook game that would fund SOTA, but that plan clearly didn’t pan out. Ultimately, Spears says that Portalarium had a third party involved to find a buyer until the project finally fell to Spears himself under his Catnip Games company.
The existence of said company is at the heart of the current SeedInvest situation, of course, but Spears claims that he has been filing necessary reports with SeedInvest and states that the equity company has not responded to those reports – all of which runs contrary to what SeedInvest told investors.
“I can say, in terms of the SeedInvest stuff, I’ve done the part that I’m contractually obligated to do, which is my company files [quarterly] reports with them,” Spears told his watchers. “That’s the part I was supposed to do. I don’t know what’s going on with the SeedInvest side of things that the other group has not replied. […] Keeping Shroud running is actually the best thing for the investors.”
We note here that Spears’ accounts of what’s going on behind the scenes at the company have been the source of considerable confusion long before now. It was Spears who had first insisted he was not CEO following the departure of Richard Garriott, a claim he then deleted in the face of evidence, then insisted he had been appointed CEO without his knowledge and that his signature must have been penciled in by an accountant.
During the stream, Spears also cast aspersions on MassivelyOP, so we note here again for the record that Spears has been hostile toward our publication and writers publicly and privately, as well as toward other MMORPG publications, for several years, in our case following our effort to secure comment on documents we planned to use in our reporting. Portalarium and Catnip representatives ceased responding to accountability inquiries in 2019.