The audit deflates Facephi’s earnings by 16% and quadruples losses in 2023.
Facephi, facial recognition and biometric technology company in Alicante., surprised by presenting audited annual reports. Some results that are collected very significant deviations from the annual figures that the company itself announced in February last year. and 4.3 million euros in losses. The final reports significantly reduce turnover, which stands at 25.15 million euros compared to the announced 30.08 million euros.
Total income, which also includes work done for the company itself (especially R&D) is thus reduced significantly. Of the 34.24 million euros that investors are notified in advance The adjustment now leaves them at 29.3 million.
This headcount reduction will have a very significant impact on the company’s results in 2023. So, Gross operating result (EBITDA) of €3.8 million fell to €665,000 in February.. In its turn, The gross result (EBIT), which according to the initial advance would have been negative by 1.24 million euros, quadrupled to a loss of 5.38 million euros..
The final net consolidated result as reflected in the final accounts of the Alicante company: losses of 4.3 million euros. A figure that is not correct in this case because the preview of the results does not include the final result figure.
How is this noticeable difference explained? The company itself includes in its annual report that “after a thorough audit process We have identified certain disagreements with our audit firm in adjusting turnover.” According to the company, “this discrepancy” is due to the way “income related to the delivery of licenseswhere delivery and availability took place in 2023, although the formalization of contracts occurred at the beginning of 2024.”
Finally, the BME stock rally was expected to continue. The auditing firm recommends recognizing these revenues in 2024.. “This change in measurement standard to standardize the balance of results is a practice that was not adopted in previous reviews, where product availability to customers was considered as a benchmark for revenue recognition,” he notes in the report. in a message from its CEO Javier Mir. The firm highlights that despite the contraction, its final turnover increased by 12.88% compared to 2022.
Short-term financing
It is the audit that also “draws attention” to losses and to the fact that the company hasn negative working capital of EUR 3.9 million and that the company’s own treasury forecasts suggest that may “need additional funds to finance itself in the short term”.
In fact, in the report, Facephi admits that it has considered and initiated several avenues to expand its funding. So it indicates that it is rnegotiations on a syndicated financing agreement with several banks, which it concluded in 2020 in the amount of 13 million euros and which they estimate will be signed in the near future. He assumes additional financing of 8 million euros.
In addition, the company also offers expand the financing line with the help of the Nice & Green fund, its largest shareholder with 18% of the capital. According to him, “we are in the process of obtaining a signed commitment to finance the company in the next 12 months through additional amount up to 6 million euros the above-mentioned investor.”
All this complements the principle of agreement reached with Korean technology company Hancom, which will invest €5 million in the Spanish company in exchange for a stake. A transaction that had not yet been signed and had a period of 90 days.
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