Minds + Machines CEO, CFO leave after discovery of accounting errors

Fri, 30th Oct 2020

Internet domain marketing group Minds + Machines said chief executive Toby Hall and chief financial officer Michael Salazar had both resigned after an investigation discovered errors in the company's accounts. Chairman Guy Elliott would assume the role of executive chairman on an interim business, while Tony Farrow would serve as interim CEO. Minds + Machines said revenue had been incorrectly recorded for three different contracts. For one of those contracts, cash of $1.125m was received and revenue of $938,000 was recognised in the 2019 financial year. 'Following its investigation the board believes that any cash sums initially received pursuant to this contract should have been classified as a deposit against future sales and then recognised as revenue as the company's partner made sales to end-users,' the company said. 'To date, the company's partner has made $201,900 of end-user sales under the contract.' The investigation identified two additional contracts entered into in the 2019 financial year totaling $790,000, where receipts were incorrectly categorised as revenue. 'These contracts were offset with payment contracts that have been recorded as deferred charges or capital expenditures, thereby impacting earnings,' the company said. It added: 'The reversal of these amounts will not impact the cash position of the company.' Minds + Machines restated its revenue and net income for the 2019 financial year as $17.2 million and $2.8 million, respectively, down from the previously reported figures of $18.9 million and $4.7 million. For the first half of the 2020 financial year, revenue and net income were changed to $8.5 million and $1.4 million, up from $8.4 million and $1.2 million, respectively. At 2:46pm: (LON:MMX) Minds Machines Group Ltd share price was +0.43p at 4.55p Story provided by StockMarketWire.com

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