Snakk says 'nothing to see here'
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Snakk Media [NZX: SNK] has dismissed comments made in an NBR story yesterday as "nothing to see here."
It made a statement to the NZX today in response to the NBR ONLINE article yesterday.
NBR had pointed out that auditors Staples Rodway had highlighted in Snakk’s annual report there was a “material uncertainty” as to whether the digital advertising company Snakk Media can carry on as a going concern.
The auditors suggest that if Snakk is unable to continue its operations, assets may need to be revalued and liabilities may need to be reclassified as short-term.
The annual report announced Snakk had scrapped plans for an ASX listing, will move over to the NXT market soon, and plans to raise more money from shareholders.
It also showed founder Derek Handley, who remains chairman, took a large pay cut last year, which may indicate concerns over free cashflow and burn rate. His remuneration was reduced from $125,000 in 2014 to $87,500 in 2015.
NBR put a number of questions to Mr Handley and company chief executive Mark Ryan. Mr Handley referred NBR to the company’s PR person, who indicated both men were overseas but a response would be forthcoming.
But instead of answering the questions, it released the below response to the stock market.
Snakk Annual Report Statement: Nothing to See Here
11:34am, 4 Aug 2015 | S/HOLDER
SNK: MARKET UPDATE
4 August 2015
Annual Report Statement: Nothing to See Here
In response to articles published yesterday the board would like to issue a trading update. Snakk traded ahead of budgeted EBITDA for the quarter ending 30 June 2015, and as of today has over $1.6m cash on hand. Snakk also has an un-utilised debt facility of $1.3m and no bank debt. In fact our cash burn for the June quarter was the lowest it has ever been.
Our new auditors Staples Rodway last week issued an unqualified opinion in relation to our financial statements for the year ending 31 March 2015, and correctly pointed out that Snakk needs to continue to achieve its budgeted revenue and gross margins to be a going concern.
Since 2013, Snakk has continually reiterated that it would at some point need to raise further capital, as do many high growth startups. This remains the case. However as our margins and performance against budget have continued to improve, the need for this continues to be reduced rather than increase. We will continue to keep the market informed as we progress on plans for capital raising.
As always, we thank you for your support.