Digiliti Money on the brink of bankruptcy as 2016 results come under investigation
15 August 2017 | 5398 views | 1
Ailing US financial technology firm Digiliti Money is contemplating bankruptcy after auditors refused to sign off on its financial accounts for 2016.
The mobile cheque deposit firm, which until April was known as Cachet Financial Solutions, lost its CEO last week amid warnings that it expected to post second quarter revenues of between $1.1 million and $1.3 million, compared to $2 million in Q2 2016.
The company at the time said it was seeking new funding to refinance the business, but now warns that an internal investigation regarding "very recently discovered information" indicates that it may need to restate its previously reported financial results for the year-to-2016.
The firm has applied for an extension with the Securities and Exchange Commission to finalise its results statement for Q2 after its accountants said that consolidated financial statements for 2016 could no longer be relied upon.
In a statement, the company says the latest developments may quash previous hopes of refinancing the business: "The Company believed it had the opportunity to obtain financing to fund its immediate cash needs, however after disclosing the situation to the potential funder, we believe the financing is no longer certain. As such, we are actively reviewing strategic options to restructure the Company including the potential sale of the Company or potentially filing for Chapter 11 bankruptcy."