Popular small cap NuRAN Wireless (CSE: NUR) this morning saw its equity halted by the British Columbia Securities Commission under a cease trade order. The order, as per a news release issued last night by the company, relates to an audit conducted by the company.
Evidently the regulator was dissatisfied with the opinion provided by auditor Mallette LLP for the audited financial statements NuRAN filed for the year ended December 31, 2021. The opinion was modified in nature, as a result of certain issues surrounding physical inventory purported to be held by NuRAN.
The audit reads:
“ln regards to the inventories included in subsidiary Nuran Wireless Cameroon Ltd., we did not observe the counting of physical inventories as at December 31, 2021. Also, we did not obtain sufficient and appropriate audit evidence concerning the cutoff procedures between years and the classification between inventories and accrued revenues. We were unable to satisfy ourselves by alternative means concerning the inventory quantity and value held as at December 31, 2021, which are stated in the balance sheet in the amounts of $2,172 558 and $817,259 respectively. As a result, we were unable to determine whether any adjustments might have been found necessary in respect of these items as at December 31, 2021, cost of sales, net loss and cash flows from operating activities for the year 2021.“
“ln regards to the inventories included in subsidiary Nuran Wireless DRC S.A.R.L.U. [..] We were unable to satisfy ourselves by alternative means concerning the inventory value held as at December 31, 2021, which are stated in the balance sheet in the amount of $2,311,781.”
Collectively, the figures in question by the auditors make up nearly all of the $5.4 million in inventory currently sitting on the books of the company. For the period ended December 31, the company reported current assets of $8.3 million, and total assets of $15.1 million, of which inventory accounts for 65% and 36%, respectively.
Commenting on the cease trade order last night, NuRAN blamed the auditors qualification on the company’s “inability to complete physical inventory counts which was exacerbated by the travel restrictions due to the ongoing COVID-19 pandemic, and the classification between inventories and accrued revenues relating to the adoption of IFRS 15.”
Curiously, the firm reportedly has “alternate means of providing such evidence.” This appears to be questionable at best, as one would assume that the company would have previously provided such information if it was available as a means of avoiding the modified opinion altogether. Outside of this comment, the firm has indicated it is working with the auditor to obtain an unmodified opinion and file restated full year financial statements. After this, the firm will apply to have its cease trade order removed.
A timeline for the removal of the order was not provided.
NuRAN Wireless last traded at $0.89 on the CSE.
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As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.