Peace Arch Entertainment on Tuesday said it remains on the hunt for acquisitions. This comes after the company failed in March to purchase British distributor ContentFilm, citing unfavorable market conditions.

‘We’re disappointed that current conditions in the credit and equity markets made it impossible to close our proposed acquisition of ContentFilm,’ Peace Arch CEO Jeff Sagansky told analysts during a conference call. ‘But we’re still looking for accretive acquisitions of film, television and home entertainment companies.’

The pledge came as Peace Arch finally released its restated and delayed financial results that date back to 2006.

The company also signaled plans to bolster its TV production arm, to produce fewer lower-margin direct-to-DVD movies and more theatrical releases with higher-profile talent.

Sagansky also hinted at a third and possibly fourth season of The Tudors, the historical drama seen on Showtime and CBC.

‘He [King Henry VIII] only had six wives. There’s a natural limit. But there’s a couple more seasons in it,’ Sagansky said.

After a recent audit of its company books, prompted in part by the arrest and resignation of former CEO Gary Howsam last November, the production company posted a loss of $5.7 million for the year to Aug. 31, 2007, compared to a restated loss of $4.6 million in 2006.

Peace Arch also posted revenues up sharply in fiscal 2007 to $61.8 million, from a year-earlier $21.3 million, as Peace Arch last year acquired the Castle Hill/Dream film library, the Trinity Home Entertainment U.S. DVD distribution business and the Dufferin Gate Productions studio facility.

Peace Arch said its earnings were reduced by $499,000 during the full-year 2006. For full-year 2007, Peace Arch recorded a $6.3-million write-down to reflect lower sales forecasts for film projects — mostly direct-to-DVD titles — that were produced before 2005. Stripping out the write-down, Peace Arch posted operating earnings of $3.5 million and pre-tax earnings of $1.5 million.

‘We will continue to sell them. But we were way too aggressive in what we expected to sell them for,’ Sagansky explained.

The audit also uncovered higher interest costs for production loans and higher income tax expenses, and ‘material weakness’ in its financial reporting controls. But Sagansky and his team reported no malfeasance.

The investigation of its balance sheet was also prompted by Peace Arch having to consolidate 14 separate single-purpose production companies that supplied programming during fiscal 2007.

Peace Arch previously only recognized the financial statements of companies in which it had a voting interest. But new accounting rules require a single-purpose production company to be consolidated into Peace Arch’s own financial statements.

News of the end to its internal audit resulted in a sharp jump in Peace Arch shares Tuesday, up 25% to $1.00 on the Toronto Stock Exchange.

That stock jump brought relief for major shareholders Sagansky and co-chairman Drew Craig, who jointly loaned the company $2.6 million in January to get Peace Arch through its internal audit.

The next step for Peace Arch is possibly to secure a senior credit facility from a major lender to ease an acute need for working capital.

‘As we expand our distribution operations [and] scale back our direct-to-DVD operations, we will become less reliant on individual project financing and more able to support a senior credit facility, even in a tight credit market,’ Sagansky told analysts.

‘This is an area we are exploring with a number of lenders,’ he added.

With that required working capital on hand, Peace Arch COO John Flock told analysts that the company intended to produce between four and six theatrical titles annually — mostly art-house films for modest releases after festival bows, to increase their ancillary value.

Peace Arch also plans to do some shopping at festivals, looking to pick up three to six additional titles per year for distribution.