I only know this because I emailed the CEO wanting an explanation for the revenue drop, because due to the recurring nature of the business, it simply didn't make sense.
The reasons are as follows (I am seeking further explanation on point 1, but point 2 is easy to understand)
1. Previously they booked licenses and veneers as deferred revenue (a little in advance of actual payment being received) This was okay with Grant Thornton, but their new auditors did not see it that was. Rather than posting as deferred revenue, they booked a credit note and they will book the revenues in the quarters to come. The impact of this change to this q's revenues is about 345k
2. They have a new partnership with Biotech Benelux selling a veneer/implant concept. About 150k has been shipped but not recorded as revenue (neither is sales nor in cash) due to administrative wait to integrate the numbers into the Biotech main software package. They will start recording these numbers in September.
Finally, there was a further one time gain of about 600k on the China share sale that the CEO expected to book as top line revenue that the new auditors did not recognize because it was share buyback of a company they still own 21% of.
Needless to say, I am very disappointed that the CEO did not communicate this publicly. I am following up on this and wanting further explanation. I encourage other shareholders to do the same.
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