Innovation Pharmaceuticals Inc (IPIX)

[sunspotter]

From the 10-Q:

“ Material Weakness and Remediation Plan

As a result of the assessment of the Company’s internal control over financial reporting as of June 30, 2023, management concluded that the Company’s accounting procedures relevant to an unconsolidated foreign investment are not sufficiently formal that management can determine whether the applicable control objectives are met and adequate documentation supporting the procedures is in place. Specifically, the Company does not have sufficient controls to conclude that data from the unconsolidated foreign investee underlying the Company’s financial statements is captured completely, accurately and timely, in accordance with the Company’s policies and procedures. This material weakness could result in a misstatement of the recorded equity investment as well as the equity in loss from equity investment that would not be prevented or detected on a timely basis.”

As I’m feeling magnanimous and indeed beneficent, I thought I’d provide an interpretation in plain English:

“I transferred $4 million of shareholders’ funds to an offshore outfit controlled by two of my buddies operating in a field that has zero to do with our professed core business. Because it’s off shore and because it’s equity, not any kind of JV, at some time in the near future I’m going to write the whole asset off without giving shareholders any significant notice. Pools, pool boys, constant travel and the Mar-a-Lago lifestyle don’t come cheap, you know”