Goodwill Hunting FANS on October 3, 2022: we have a, "strong balance sheet:...160.6m in Total Assets as of June 30th"
Also FANS - Audited YE Dec.31 2022: "Total Assets = 77.4m"
Put another way, errrrr....so to comply with IFRS requirements we kinda needed to impair our goodwill and stuff....so assets are now "77mil"...aaaaand 88% of that is actually STILL goodwill and intangibles...so...yeah....our real Current Assets and more specifically cash aren't really sufficient to cover our short term liabilities, including the 8million debt we now have to service.
I reached out to Prit on Oct 3rd stating that it was dishonest to state that FANS had a "strong balance sheet" because 92% of that at the time was goodwill and intangibles built on highly questionable assumptions. I was very interested to see KPMGs comments on this in their key audit matters.
As part of their impairment analysis, KPMG took a look at the assumptions pertainng to Goodwill and gave FANS an appropriate slap in the face. "We draw attention to Notes 2(e), 2(n) and 10 to the financial statements...an area of significant risk of material MISSTATEMENT given the magnitude of the balance and the high degree of estimation uncertainty in determining the value in use. Significant auditor judement and the involvement of those with specialized skills and knowledge were required in performing and evaluating the results of our procedures due to the sensitivity of the value in use..."
Jumping down to Note 10, it was really interesting to read the drop in the budget revenue growth rate (avg of next 5 years) for AmAff that went from 35% in 2021 to 9.8% in 2022. That's a mighty drop just 1 year removed from the reverse takeover.
Well, at least the balance sheet is starting to reflect a little closer to the reality. Q1 should at least be good. GLTA