Minds and Machines launches investigation into revenue recognition

9th Oct 2020 08:22

(Sharecast News) - Internet domain registrar Minds and Machines has commenced a formal investigation to determine whether certain revenues had been correctly recognised.
Minds and Machines said on Friday that its investigation will focus principally on a specific contract with multiple elements that was entered into in 2019 and related to if all requirements for the recognition of revenue had been met or whether such amounts should have been classified as a refundable deposit against future sales or deferred revenues.

The AIM-listed group said cash of $1.12m had been received in connection with the contract and revenues of $938,000 was recognised in the year ended 31 December, with a further $25,000 coming in the six months ended 30 June.

Minds and Machines said: "The board emphasises that the investigation relates to revenue recognition and the board does not expect it to have any impact on cash save for a maximum exposure of approximately $1.0m if the amounts received under the contract were to be refundable and no further revenue was generated."

The company had cash of $7.3m as of 30 June.

As of 0910 BST, Minds and Machines shares had slumped 15.08% to 5.01p.