Noticed this in The Australian:Significant doubt’: Auditors...

Noticed this in The Australian:

Significant doubt’: Auditors worried over tech firm’s future
The auditors of troubled global video technology business Atomos have not signed off the latest results for the ASX-listed company citing concerns over the future of the company.Auditor Deloitte said it was unable to obtain sufficient evidence through the company’s first half of 2022-23 interim results that it could continue as a going concern and issued a disclaimer of conclusion on the half-year financial statements.Atomos’ shares remained suspended from quotation and the Melbourne-based company said it was engaging with ASX regarding lifting the suspension.Atomos’ board of directors told the ASX that the Group’s ability to continue as a going concern was dependent on it achieving short-term revenue growth, inventory reduction and associated cash inflow forecasts.It also said it had to comply with its debt facilities, adhere to the payment plans agreed with key suppliers and incurring no significant payout of legal costs in the defence against a claim from former CEO Estelle McGechie.However, Deloitte was not convinced.“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 and, therefore, whether it will be able to realise its assets and discharge its liabilities in normal course of business and at the amounts stated in the half-year financial report,” it said.Atomos reported revenue of $21.1m in the six months to the end of 2022, 48 per cent lower than the corresponding period in 2021 while the company reported a earnings before interest, tax, depreciation and amortisation loss of $12.7m compared to a profit of $2.3m the year before.Over the same period it reported a loss after tax of $48.2m compared to a profit of $300,000 in December 2021 and negative cash flows of $1.5m.Atomos said it experienced “very weak sales” as a result of a deterioration in economic conditions in the industry and slower than anticipated momentum from its most recently released products. “The company also experienced lower gross margins attributed by higher cost of sales from promotional pricing and higher inventory obsolescence provisioning,” it said.“One of the consequences of the economic downturn in the industry is that our channel partner customers have become very focused on their own inventory levels and we’ve seen a concerted effort to de-stock from many of our customers. “This de-stocking is temporary, and we expect an uplift in sales as our channel partners realise their target inventory levels.”Atomos shares last traded at 6.5c each, giving it a market capitalisation of around $26m.