(Alliance News) - Minds + Machines Group Ltd on Friday said it has commenced a formal investigation to determine whether certain revenue has been correctly recognised in relation to a contract entered into in 2019.
Shares in Minds + Machines were trading 14% lower at 5.10 pence each in London in morning trading.
The internet domain firm stated the investigation relates to whether all requirements for the recognition of revenue had been met before December 31, 2019 and June 30, 2020 or whether such amounts should have been classified as a refundable deposit against future sales or deferred revenue at those dates.
Minds + Machines noted that it had received USD1.1 million cash in connection to the contract, adding that revenue of USD938,000 was recognised in 2019 and USD25,000 in the six months ended June 30, 2020.
However, it emphasised that the investigation only relates to revenue recognition and the board does not expect it to have any impact on cash apart from a maximum exposure of around USD1 million if the amounts received under the contract were to be refundable and no further revenue was generated.
As at June 30, the company had cash of USD7.3 million.
By Ife Taiwo; ifetaiwo@alliancenews.com
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