KIT digital to restate financials due to ‘errors and irregularities’
Having identified ‘errors and irregularities’ in its historical financial announcements, video management software and services company KIT digital is to restate its financial results for the years ended 31 December 2009, 2010 and 2011, and for each of the three quarters in the same years.
As a result of the restatement of these prior periods, the company will also restate the quarters ended 31 March 2012 and 30 June 2012. In addition, it will postpone its quarterly report for the three months ending 30 September 2012, and has decided to cancel its 2012 Annual Meeting of Stockholders, scheduled for December.
On the day of its announcement (21 November), KIT digital had approximately $10.6 million of cash and cash equivalents, of which approximately $4.0 million is restricted cash. The Company also has circa $11.0 million outstanding under a secured loan facility and $2.5 million under an unsecured related party note.
The news caps a challenging year for KIT digital that has seen the NYC-based company embark upon an extensive restructuring programme that will ultimately lead to a 22% net reduction (approx 30 employees) in the total workforce.