THQ has filed a late notification for Form 10-Q with the SEC, stating Wells Fargo sent notice it is in default on its $50 million line of revolving credit.
According to the filing, THQ was unable, “without unreasonable effort or expense,” to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 with the Securities and Exchange Commission by November 8, “in connection with the Company’s Credit Agreement with Wells Fargo Capital Finance.”
Wells Fargo informed THQ that loan availability on its credit line was less than 12.5% of the “maximum revolver amount on one or more occasions as of and after” the fiscal quarter ended September 30.
THQ noted it is currently in discussions with Wells Fargo regarding the asserted defaults and believes that it will reach an agreement with the banking institution “with respect to such defaults.”
Wells Fargo has continued to fund requests from THQ since September 30, while the firms try to reach an agreement. There can be no assurance, however, an agreement will be reached.
Earlier this week, THQ reported a net loss of $21 million and the delay of titles South Park: The Stick of Truth, Company of Heroes 2, and Metro: Last Light.
Following the release of its financials, THQ’s stock dropped 46%.