Officials from Canadian publisher Hip Interactive (Pariah
) have announced that the company’s audited financial statements for the year ended March 31st will not be filed by June 30th – as required under Canadian securities laws.
The company is attributing the delay to the need to resolve "certain non-cash accounting issues with respect to the company's year end, relating to the impairment of goodwill and the establishment of certain valuation allowances against the company's future tax assets”.
The news has not pleased the financial markets, with the company’s shares plummeting by almost 63 percent, from 32 cents to just 19 cents on the Toronto Stock Exchange. The company expects trading of its shares to be temporarily halted due to the delay, although it has requested that the ban only be applicable to directors and officers insiders of Hip Interactive.
It is unclear whether these problems will impact the company’s more imminent releases, of which massively multiplayer online game Call of Cthulhu: Destiny's End
and George Romero's City of the Dead
are the more obvious highlights.
The delayed financial results are expected to show a loss - before interest expense, taxes, depreciation and amortization of software development costs and intangibles - of $2 million to $3 million. Loss before income taxes is expected to be between $20 and $21 million.
The company is also experiencing liquidity issues and is working to raise additional capital. While Hip Interactive has $35.2 million outstanding under its $55 million credit facility, the company's ability to borrow additional amounts is limited by the availability of eligible collateral. According to the company, executives are currently in discussions with a number of unnamed parties with respect to providing additional financing.