THQ's current financial woes appear to be escalating rapidly, as the company has now defaulted on some part of a $50 million credit facility it has with lender Wells Fargo.
publisher's stock fell by 55 percent last week
following underwhelming financial results, leading analysts to question whether this is the end for the company
As part of a new SEC filing, THQ revealed that financial services company Wells Fargo says the publisher has caused "one or more events of default" to occur, having failed to fulfill certain obligations set in the loan agreement.
As a result, Wells Fargo is continuing to fund requests from the company while it tries to reach an agreement on the defaulted instances -- however, it was noted that there can be no assurance that an agreement will be met.
THQ entered into the credit facility with Wells Fargo in September of last year. The facility has a four-year term, meaning that THQ must have paid back all outstanding debts by that time.
In line with the news, THQ also admitted that it is not able to file its quarterly 10-Q report -- a U.S. Securities and Exchange Commission report that is compulsory and must be filed by all publicly traded corporations.
THQ said that it was not able to file the report in time "without unreasonable effort or expense," and that it expects to have it ready within a five day extension period.
On Tuesday, November 13, THQ managed to file its 10-Q report, with president Jason Rubin issuing a statement saying that the company expects to resolve the dispute with Wells Fargo.
There is, as the report says, no guarantee that this will happen.
"THQ currently has $16.4 million outstanding on its facility, which is unchanged since we released second quarter earnings," he said.