GRAVITY Co., Ltd. — Regulatory Filings 2009

Jun 19, 2009

6-K/A 1 c87049e6vkza.htm FORM 6-K/A Form 6-K/A PAGEBREAK

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K/A

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of June, 2009 Commission File Number 000-51138

GRAVITY Co., Ltd.

(Translation of registrant’s name into English)

Nuritkum Square Business Tower 15F, 1605 Sangam-Dong, Mapo-Gu, Seoul, Korea 121-270 (Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: þ Form 20-F o Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: o Yes þ No

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): n/a

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EXPLANATORY NOTE

GRAVITY Co., Ltd. (NasdaqGM: GRVY) (“Gravity” or “Company”) is furnishing this report on Form 6-K/A in order to correct the amount of equity in loss of related joint venture and partnership and the amount of investment, and corresponding line items, including net loss and total assets, in the quarterly financial statements for each quarter ended March 31, 2008, June 30, 2008 and September 30, 2008 included in the Company’s press releases contained in the Form 6-Ks furnished to the Securities Exchange Commission (“SEC”) on July 7, 2008, October 14, 2008 and November 17, 2008, respectively (collectively, “Original Filings”). A summary of the changes are set forth in this “explanatory note” and the portions amended in the Original Filings are set forth below in the section titled “Form 6-Ks amended and superseded.”

In the course of preparing the financial statements for 2008 in accordance with generally accepted accounting principles in the Unites States (“US-GAAP”), the Company identified that the Company needed to recognize additional equity loss of partnership amounting to KRW 3,323 million related with its investment in Online Game Revolution Fund No. 1 (“Fund”). This Fund is operated in Japan and the objective of the Fund is to invest in business relating to online games for the benefit of all the partners. The Fund invested in games to obtain distribution right, revenue sharing right or ownership of the games. In early 2008, the Fund invested in a game under development and acquired the ownership of the game. While the Fund capitalized acquisition cost of in-process software as an intangible asset in accordance with generally accepted accounting principles in Japan, the Company determined that the Company needed to account for its investment in the Fund under equity method of accounting and as the investment related to purchasing in-process software prior to establishing technological feasibility, such costs should have been expensed as research and development costs when incurred rather than capitalized under US-GAAP. The above accounting treatment should have been reflected in the Company’s financial statement in the first quarter ended March 31, 2008. The second and third quarter ended should also have been revised in order to recognize the effects of exchange rate change on the additional loss above.

As a result, the Company determined that the correct amount of equity in loss of related joint venture and partnership (i) for the three months ended March 31, 2008 was KRW 3,364 million, or KRW 3,143 million greater than KRW 221 million previously reported; (ii) for the three months ended June 30, 2008 was KRW 177 million, or KRW 118 million greater than KRW 59 million previously reported ; and (iii) for the three months ended September 30, 2008 was KRW 123 million, or KRW 63 million greater than KRW 60 million previously reported, which correspondingly increased net loss amount (i) for the three months ended March 31, 2008 from KRW 1,370 million to KRW 4,514 million; and (ii) for the three months ended June 30, 2008 from KRW 665 million to KRW 782 million and decreased net income amount for the three months ended September 30, 2008 from KRW 932 million to KRW 869 million.

FORM 6-Ks AMENDED AND SUPERSEDED

For the convenience of the reader, this Form 6-K/A does not set forth the complete text of the press releases and the financial statements included in the Original Filings, but include only portions amended by the corrected financial information. The changes we have made are a result of and reflect the amendments described herein; no other information in the Original Filings has been changed.

The following hereby updates and supersedes the Company’s financial information for each quarter ended March 31, 2008, June 30, 2008 and September 30, 2008 included in the Company’s press releases and financial statements in the Form 6-Ks furnished to the SEC on July 7, 2008, October 14, 2008 and November 17, 2008, respectively.

1. Form 6-K originally furnished on July 7, 2008, amended and superseded as follows

(1) Press release

As originally reported:

As a result of the foregoing factors, Gravity recorded a net loss of KRW 1,370 million (US$1,309 thousand) for the first quarter of 2008 compared with a net loss of KRW 6,237 million (US$5,960 thousand) for the fourth quarter of 2007 and a net loss of KRW 973 million (US$931 thousand) for the first quarter of 2007.

As amended:

As a result of the foregoing factors, Gravity recorded a net loss of KRW 4,514 million (US$4,312 thousand) for the first quarter of 2008 compared with a net loss of KRW 6,237 million (US$5,960 thousand) for the fourth quarter of 2007 and a net loss of KRW 973 million (US$931 thousand) for the first quarter of 2007.

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(2) Consolidated Balance Sheet

As originally reported:

(In millions of KRW and in thousands of US$)

	As of
	31-Dec-07			31-Mar-08
	KRW	US$		KRW		US$
Assets	(audited)	(unaudited)		(unaudited)		(unaudited)
Investment	20		19		3,935		3,759
Total assets	96,927		92,594		95,067		90,818
Liabilities and shareholders’ equity
Retained earnings	(2,879	)	(2,750	)	(4,249	)	(4,059	)
Accumulated other comprehensive income (loss)	(245	)	(234	)	770		735
Total shareholders’ equity	75,476		72,102		75,176		71,815
Total liabilities and shareholders’ equity	96,927		92,594		95,067		90,818

As amended:

(In millions of KRW and in thousands of US$)

	As of
	31-Dec-07			31-Mar-08
	KRW	US$		KRW		US$
Assets	(audited)	(unaudited)		(unaudited)		(unaudited)
Investment	20		19		20		19
Total assets	96,927		92,594		91,152		87,077
Liabilities and shareholders’ equity
Retained earnings	(2,879	)	(2,750	)	(7,393	)	(7,062	)
Accumulated other comprehensive income (loss)	(245	)	(234	)	(2	)	(2	)
Total shareholders’ equity	75,476		72,102		71,260		68,074
Total liabilities and shareholders’ equity	96,927		92,594		91,152		87,077

(3) Consolidated Statement of Operations

As originally reported:

(In millions of KRW and in thousands of US$)

31-Dec-07				31-Mar-07				31-Mar-08
(KRW)		(US$)		(KRW)		(US$)		(KRW)		(US$)
(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Equity in loss of related
joint venture and
partnership	679		649		171		163		221		211
Net loss	(6,237	)	(5,960	)	(973	)	(931	)	(1,370	)	(1,309	)

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As amended:

(In millions of KRW and in thousands of US$)

31-Dec-07				31-Mar-07				31-Mar-08
(KRW)		(US$)		(KRW)		(US$)		(KRW)		(US$)
(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Equity in loss of related
joint venture and
partnership	679		649		171		163		3,364		3,214
Net loss	(6,237	)	(5,960	)	(973	)	(931	)	(4,514	)	(4,312	)

Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the rate of KRW 1,046.80 to US$1.00, the noon buying rate in effect on June 30, 2008 as quoted by the Federal Reserve Bank of New York.

1. Form 6-K originally furnished on October 14, 2008, amended and superseded as follows

(1) Press release

As originally reported:

As a result of the foregoing factors, Gravity recorded a net loss of KRW 665 million (US$557 thousand) for the second quarter of 2008 compared with a net loss of KRW 1,370 million for the first quarter of 2008 and a net loss of KRW 3,415 million for the second quarter of 2007.

As amended:

As a result of the foregoing factors, Gravity recorded a net loss of KRW 782 million (US$654 thousand) for the second quarter of 2008 compared with a net loss of KRW 4,513 million for the first quarter of 2008 and a net loss of KRW 3,415 million for the second quarter of 2007.

(2) Consolidated Balance Sheet

As originally reported:

(In millions of KRW and in thousands of US$)

	As of
	31-Dec-07			30-Jun-08
	KRW	US$		KRW		US$
Assets	(audited)	(unaudited)		(unaudited)		(unaudited)
Investment	20		17		3,810		3,189
Total assets	96,927		81,121		94,701		79,257
Liabilities and shareholders’ equity
Retained earnings	(2,879	)	(2,410	)	(4,914	)	(4,113	)
Accumulated other comprehensive income (loss)	(245	)	(204	)	969		811
Total shareholders’ equity	75,476		63,168		74,764		62,571
Total liabilities and shareholders’ equity	96,927		81,121		94,701		79,257

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As amended:

(In millions of KRW and in thousands of US$)

	As of
	31-Dec-07			30-Jun-08
	KRW	US$		KRW		US$
Assets	(audited)	(unaudited)		(unaudited)		(unaudited)
Investment	20		17		484		405
Total assets	96,927		81,121		91,375		76,474
Liabilities and shareholders’ equity
Retained earnings	(2,879	)	(2,410	)	(8,175	)	(6,842	)
Accumulated other comprehensive income (loss)	(245	)	(204	)	904		757
Total shareholders’ equity	75,476		63,168		71,438		59,788
Total liabilities and shareholders’ equity	96,927		81,121		91,375		76,474

(3) Consolidated Statement of Operations

As originally reported:

(In millions of KRW and in thousands of US$)

31-Mar-08		30-Jun-07		30-Jun-08				30-Jun-07		30-Jun-08
(KRW)		(KRW)		(KRW)		(US$)		(KRW)		(KRW)		(US$)
(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Equity in loss of related
joint venture and
partnership	221		163		59		50		334		280		234
Net loss	(1,370	)	(3,415	)	(665	)	(557	)	(4,388	)	(2,035	)	(1,703	)

As amended:

(In millions of KRW and in thousands of US$)

31-Mar-08		30-Jun-07		30-Jun-08				30-Jun-07		30-Jun-08
(KRW)		(KRW)		(KRW)		(US$)		(KRW)		(KRW)		(US$)
(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Equity in loss of related
joint venture and
partnership	3,364		163		177		148		334		3,541		2,964
Net loss	(4,514	)	(3,415	)	(782	)	(654	)	(4,388	)	(5,296	)	(4,432	)

Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the rate of KRW 1,194.85 to US$1.00, the noon buying rate in effect on October 1, 2008 as quoted by the Federal Reserve Bank of New York.

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1. Form 6-K originally furnished on November 17, 2008, amended and superseded as follows

(1) Press release

As originally reported:

As a result of the foregoing factors, Gravity recorded a net income of KRW 932 million (US$737 thousand) for the third quarter of 2008 compared with a net loss of KRW 665 million for the second quarter of 2008 and a net loss of KRW 12,576 million for the third quarter of 2007.

As amended:

As a result of the foregoing factors, Gravity recorded a net income of KRW 869 million (US$689 thousand) for the third quarter of 2008 compared with a net loss of KRW 782 million for the second quarter of 2008 and a net loss of KRW 12,576 million for the third quarter of 2007.

(2) Consolidated Balance Sheet

As originally reported:

(In millions of KRW and in thousands of US$)

	As of
	31-Dec-07			30-Sep-08
	KRW	US$		KRW		US$
Assets	(audited)	(unaudited)		(unaudited)		(unaudited)
Investments	20		16		6,910		5,475
Total assets	96,927		76,804		96,051		76,110
Liabilities and shareholders’ equity
Retained earnings	(2,879	)	(2,281	)	(3,982	)	(3,155	)
Accumulated other comprehensive income (loss)	(245	)	(195	)	2,426		1,922
Total shareholders’ equity	75,476		59,806		77,103		61,096
Total liabilities and shareholders’ equity	96,927		76,804		96,051		76,110

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As amended:

(In millions of KRW and in thousands of US$)

	As of
	31-Dec-07			30-Sep-08
	KRW	US$		KRW		US$
Assets	(audited)	(unaudited)		(unaudited)		(unaudited)
Investments	20		16		3,034		2,404
Total assets	96,927		76,804		92,175		73,039
Liabilities and shareholders’ equity
Retained earnings	(2,879	)	(2,281	)	(7,306	)	(5,789	)
Accumulated other comprehensive income (loss)	(245	)	(195	)	1,873		1,484
Total shareholders’ equity	75,476		59,806		73,226		58,024
Total liabilities and shareholders’ equity	96,927		76,804		92,175		73,039

(3) Consolidated Statement of Operations

As originally reported:

(In millions of KRW and in thousands of US$)

30-Jun-08		30-Sep-07		30-Sep-08		30-Sep-07		30-Sep-08
(KRW)		(KRW)		(KRW)	(US$)	(KRW)		(KRW)		(US$)
(unaudited)		(unaudited)		(unaudited)	(unaudited)	(unaudited)		(unaudited)		(unaudited)
Equity in loss of related joint
venture and partnership	59		13		60	47	347		341		271
Net income (loss)	(665	)	(12,576	)	932	737	(16,963	)	(1,103	)	(874	)

As amended:

(In millions of KRW and in thousands of US$)

30-Jun-08		30-Sep-07		30-Sep-08		30-Sep-07		30-Sep-08
(KRW)		(KRW)		(KRW)	(US$)	(KRW)		(KRW)		(US$)
(unaudited)		(unaudited)		(unaudited)	(unaudited)	(unaudited)		(unaudited)		(unaudited)
Equity in loss of related joint
venture and partnership	177		13		123	97	347		3,664		2,903
Net income (loss)	(782	)	(12,576	)	869	689	(16,963	)	(4,427	)	(3,508	)

Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the rate of KRW 1,262.00 to US$1.00, the noon buying rate in effect on November 3, 2008, as quoted by the Federal Reserve Bank of New York.

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About GRAVITY Co., Ltd.

Based in Korea, Gravity is a developer and publisher of online games. Gravity’s principal product, Ragnarok Online TM , is a popular online game in many markets, including Japan, Taiwan and Thailand, and is currently commercially offered in 39 countries and markets. For more information about Gravity, please visit http://www.gravity.co.kr.

Forward-Looking Statements:

Certain statements in this report may include, in addition to historical information, “forward-looking statements” within the meaning of the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act 1995. Forward-looking statements can generally be identified by the use of forward-looking terminology, such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” “project,” or “continue” or the negative thereof or other similar words, although not all forward-looking statements contain these words. Investors should consider the information contained in our submissions and filings with the United States Securities and Exchange Commission (the “SEC”), including our registration statement on Form F-1, as amended, and our annual reports on Form 20-F, together with such other documents and we may submit to or file with the SEC from time to time, on Form 6-K. The forward-looking statements speak only as of this report and we assume no duty to update them to reflect new, changing or unanticipated events or circumstances.

Contacts:

Mr. Heung Gon Kim Chief Financial Officer Gravity Co., Ltd. Email: kheung@gravity.co.kr

Ms. Yoon Joo Lee IR Manager Gravity Co., Ltd. Email: yoonjoo.lee@gravity.co.kr Telephone: +82-2-2132-7800

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

/s/ Heung Gon Kim
Name:	Heung Gon Kim
Title:	Chief Financial Officer

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