Auditor: Majesco future a 'concern'
EmptyNEW YORK -- Video game and digital entertainment developer Majesco Entertainment Co. said Friday that its auditing firm is questioning the company's ability to continue operating amid continuing losses.
Majesco said Friday that its accounting firm, Goldstein Golub Kessler, has included a comment questioning its future as a "going concern" in the company's financial report for its fiscal year ending Oct. 31.
This usually means that an auditor is not sure if a company will be able to keep operating and producing financial reports.
Majesco last week reported a fiscal fourth-quarter loss of $2.9 million, down from a loss of $34.2 million a year ago.
For 2007, the company forecast that revenue will decline 10%-15%.
In after-hours trading Friday on the Nasdaq, Majesco shares declined. During the past year, they have traded from $1-$2.13.
"Our auditors issued an opinion indicating that there is substantial doubt about our ability to continue as a going concern," Majesco said in a filing last week with the U.S. Securities and Exchange Commission. "In their report in connection with our 2006 and 2005 financial statements, our auditors included an explanatory paragraph stating that because we have incurred net losses for the years ended Oct. 31, 2005, and 2006, there is substantial doubt about our ability to continue as a going concern."
The filing added: "If we are not able to achieve positive cash flow from operations or to secure additional financing as needed, we will continue to experience (this) risk."