Dubber has assured investors the business is stable despite ceasing trading for two days.
Indeed, the cloud-based call recording software provider asked the Australian Stock Exchange to halt trading on Wednesday, August 28, and commence again on Friday, August 30.
The vendor cited a pending announcement regarding “potential adjustments to its FY2023 financial statements” as its motivation.
Dubber has now restated its FY2023 statement alongside its FY2022 earnings after spotting several irregularities in its accounting – some dating back to 2017.
Sharing an example, Andrew Demery, Chief Financial Officer at Dubber, told investors during a webinar last week: “The major item we’ve identified is an under-provision for employment-related taxes, predominantly relating to 2022 and prior financial years.”
Dubber must now pay this money back, with interest, as it aims to put a sordid chapter in its history behind it.
That chapter opened with the departure of Cofounder & CEO Steve McGovern in March after a $26.6MN blackhole came to light within its half-year 2023 earnings reports.
On the news, Dubber stock tanked and has not recovered since. Indeed, shares now cost just AUD 0.03 – down over 98 percent from their pandemic peak.
Moreover, financial analysts pushed Peter Pawlowitsch, Acting CEO of Dubber, on the need to secure new debt funding, with under $11MN in cash available and payables of approximately $21MN.
The response: “We’ll announce something once it’s signed,” as the CEO promised to address “perceived gaps in the balance sheet through various mechanisms.”
That short response isn’t a confidence booster. But, Dubber did report a “group revenue” increase of 30 percent year-over-year (YoY) – last quarter – while reducing direct costs by two percent.
After referencing those better-than-expected numbers, Demery assured investors and customers that there’s light at the end of the tunnel. He said:
The business is stable, and everyone is focused on delivering results. We’re positive about the opportunities in front of us and appreciate your support.
While that may be true in the short term, Dubber faces the risk of increasing market competition as more tech vendors jump into the voice recording, recognition, and transcription space.
After all, many new startups – leveraging generative AI (GenAI) – aim to record calls, turn them into data, and enrich that with AI. That’s Dubber’s bread and butter.
However, that also has drawn more eyeballs onto the space, where the business remains a competitor often deployed to funnel more data from communications systems into the CRM.
To maintain its market status, as more businesses leverage such cloud applications, Pawlowitsh recognizes the need to appoint a permanent CEO and is “working on that process.”
Until then, he aims to further establish clarity, direction, and accountability within the team and recoup as much of that missing $26.6MN as possible.
Indeed, Pawlowitsh confirmed how Dubber continues to pursue the “recovery of misappropriated funds”, recently lodging a claim with the Victoria Legal Fidelity Fund.
As Dubber pushes to reach cash flow break-even, those funds could be crucial.
