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Minds + Machines Grp (MMX)


Friday 30 October, 2020

Minds + Machines Grp

Statement re: Contract, Investigation & Board

RNS Number : 6964D
Minds + Machines Group Limited
30 October 2020

Minds + Machines Group Limited

("MMX" or the "Company")

Statement re: Contract, Investigation & Board Changes

Further to the announcement of 9 October 2020, the Board has concluded its formal investigation to determine whether certain revenue associated with a specific contract had been correctly recognised in the year ended 31 December 2019 ("FY-2019") and the six months to 30 June 2020 ("HY-2020").

The Board believes that revenue attached to the specific contract has been incorrectly recognised. As previously announced, cash of $1.125m was received in connection with the specific contract and revenue of $938,000 was recognised in FY-2019. Following its investigation the Board believes that any cash sums initially received pursuant to this contract should have been classified as a deposit against future sales and then recognised as revenue as the Company's partner made sales to end-users. To date, the Company's partner has made $201,900 of end-user sales under the contract.

In addition to the above, the investigation has identified two additional contracts entered into in FY-2019 totaling $790,000 where receipts were incorrectly categorised as revenue. These contracts were offset with payment contracts that have been recorded as deferred charges or capital expenditures, thereby impacting earnings. The reversal of these amounts will not impact the cash position of the Company.

The financial statement impact of the findings of the investigation is as follows:






As adjusted


As adjusted











Net Income










Cash inflow from operations





Cash inflow (outflow) from investing activities





Cash outflow from financing activities






Board Changes

Toby Hall, Chief Executive Officer and Michael Salazar, Chief Financial Officer have, by mutual agreement, resigned from the Board with immediate effect.

Guy Elliott, Non-Executive Chairman has agreed to assume the role of Executive Chairman on an interim basis.

The Board has also appointed Tony Farrow as interim Chief Executive Officer to oversee the day-to-day operations of the Company. Mr Farrow has an in-depth knowledge of the domain name industry, having only recently left MMX where he was COO with responsibility for overall operations, registrar channel support, and integration with registry service provider backends. Prior to its acquisition by MMX in May 2018, Mr Farrow worked for seven years at ICM. Mr Farrow will not join the Board at this time.

Bryan Disher, independent Non-Executive Director, has agreed to oversee the finance function of the Group and will assume the role of interim CFO until a permanent CFO can be appointed. Mr Disher is a Chartered Professional Accountant, Chartered Accountant (Canada) and who spent 37 years at PwC.

Tender Offer

In the Group's interim results for the six-month period ended 30 June 2020, announced on 30 September 2020, the Board set out its intention to launch a tender offer of £3.0m in November 2020. Given the investigation and changes to the Board referenced above, the Board believes it is prudent to postpone the proposed tender offer.

The Board remains committed to returning excess capital to shareholders. The Company continues to have a strong balance sheet and surplus cash to its operating requirements.

Further announcements will be made in due course.


The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014 .

For further information

Minds + Machines Group Limited


Guy Elliott, Chairman

via Belvedere Communications Limited



finnCap Ltd

Tel:+ 44 (0) 20 7220 0500

Corporate finance - Stuart Andrews/Carl Holmes/Simon Hicks

ECM - Tim Redfern/Richard Chambers




Belvedere Communications Limited

Tel: +44 (0) 74 070 23147

John West

Llew Angus




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