Auditor raises concern over MCOM’s ability to continue as a going concern

TheEdge Wed, May 03, 2023 10:51pm - 11 months View Original

KUALA LUMPUR (May 3): LEAP-market listed MCOM Holdings Bhd said its external auditor has raised a material uncertainty on the group's ability to continue as a going concern with regards to its business activities for the financial year ended Dec 31, 2022 (FY2022).

Auditor UHY noted that MCOM incurred a net loss of RM3.06 million for FY2022 at the group level, and RM525,414 at the company level, according to the digital marketing solutions provider's bourse filing.

MCOM's net current liabilities amounted to RM4.88 million and RM614,695 respectively, and they had a deficit in shareholders’ equity of RM239,626 and RM549,370 respectively.

“These conditions indicate the existence of an uncertainty which may cast doubt about the group’s and the company’s ability to continue as a going concern. Our opinion is not modified in respect of this manner,” MCOM quoted the auditor as saying.

In response to the opinion, MCOM proposed to settle a debt of RM2 million owing to executive director and vice president Chew Lee Poh via the issuance of new MCOM shares at an issue price of 28 sen.

It is also looking into the voluntary winding up of the group’s 85%-owned subsidiary M-Media to enable MCOM to streamline the group's structure and to exit from loss-making operations.

“[This is] taking into consideration that M-Media has ceased operations after recording consecutive losses over the historical years,” said MCOM.

Based on the latest audited financial statements for FY2022, M-Media recorded a deficit net liabilities position of RM6.21 million.

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