Note 10 — Joint Ventures

The Company owned a fifty percent interest in a joint venture with THQ Inc. (“THQ”), which developed, published and distributed interactive entertainment software for the leading hardware game platforms in the home video game market. Pursuant to a Settlement Agreement and Mutual Release (the “Agreement”) dated December 22, 2009, the joint venture was terminated on December 31, 2009 and THQ is obligated to pay the Company fixed payments in the aggregate amount of $20.0 million, to be paid in installments of $6.0 million on each of June 30, 2010 (payment received in June 2010) and 2011 (payment received in June 2011) and $4.0 million on each of June 30, 2012 and 2013 which the Company will record as income on a cash basis when received, as the Company cannot reasonably assure its collectability. Pursuant to an amendment to the Agreement, the 2012 installment is to be paid $2.0 million on June 20, 2012 (payment received in June 2012) and $1.0 million plus accrued interest of 5% per annum on each of August 30, 2012 and October 30, 2012 and the 2013 installment is to be paid in ten equal monthly non-interest bearing installments of $0.4 million commencing on February 28, 2013.

The Company owns a fifty percent interest in a joint venture with the U.S. entertainment subsidiary of a leading Japanese advertising and animation production company. The joint venture was created to develop and produce a boys’ animated television show, which it licenses worldwide for television broadcast as well as consumer products. The Company is producing and marketing toys based upon the television program under a license from the joint venture. The joint venture has also licensed certain other merchandising rights to third parties. The Company is responsible for fifty percent of the operating expenses of the joint venture and thirty-one percent of the production costs of the television show. The joint venture completed and delivered 26 episodes of the show, which began airing in February 2012, and commenced production on the remaining 26 episodes of the show. The Company is responsible for production costs in the aggregate amount of approximately $3.7 million, of which $2.7 million and $0.9 million were paid in 2011 and 2012, respectively. The Company’s investment is being accounted for using the equity method. For the three months ended June 30, 2011 and June 30, 2012, the Company recognized a loss from the joint venture of $8,035 and $97,941, respectively. For the six months ended June 30, 2011 and June 30, 2012, the Company recognized income from the joint venture of $919 and a loss of $44,202, respectively, including producer fees and royalty income from the joint venture in the amount of nil and $77,638 for the six months ended June 30, 2011 and 2012, respectively.

As of December 31, 2011 and June 30, 2012, the balance of the investment in the joint venture includes the following components (in thousands):

	December 31,		June 30,
	2011		2012
Capital Contributions, net of distributions	$	2,826	$	3,507
Equity in cumulative net loss		(90)		(212)
Investment in joint venture	$	2,736	$	3,295