Derek Handley, the sustainability show pony, has some grim news for his shareholders at Snakk Media.
It seems the business may not be sustainable.
Auditors have highlighted a “material uncertainty” as to whether Snakk Media can carry on as a going concern, as it scraps plans for an ASX listing and plans to raise more money from shareholders.
The NZAX-listed digital advertising agency, which matches advertisers with mobile users, released its annual report to the stock exchange late Friday afternoon.
In the report, management says the company’s ability to operate as a going concern depends on its ability to achieve budgeted revenue and gross margins, whether it can finalise a financing agreement and receive continuing support from shareholders.
Auditors Staples Rodway highlight this, saying: “These conditions indicate the existence of a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern.”
The auditors suggest that if the company is unable to continue its operations, assets may need to be revalued and bank debt may need to be reclassified as short-term.
Handley and Snakk thought they might get away with releasing their annual report late on a Friday, hoping it might get ignored. I guess the NBR is wise to that trick.
According to the NBR, it looks like some of Snakk’s non current liabilities might look more like current liabilities if these uncertainties should continue. That sounds a lot like code words for the bank calling its debt in.
Derek Handley is the Terry Serepisos of tech, all piss and wind. After all, it’s not the first company he’s struggled with. He ran his old company Feverpitch, a failed online gambling company, into the ground back in 2003. The NZX wreckage mutated into a reverse listing before that in turn got delisted.
Investors in Snakk and believers of Handley’s hype spraying might want to read the annual report very closely to make sure they are happy with Snakks big picture.
SkyTV will be sure to ask questions as well of Derek, since they, for some unknown reason, thought it a good idea to put Derek on their board of directors.
One things for sure, we won’t be seeing Derek updating his own Wikipedia page with the news he might ruin his second listed company unless he finds some cash, pronto. Maybe instead of lecturing others he might listen to some wiser old hands about what business sustainability is all about.