Grocery E-Commerce Firm Missfresh Discloses Revenue Miscalculations
Missfresh, a grocery e-commerce platform based in China, recently identified certain transactions carried out by its Next-Day Delivery BU in 2021 that exhibited characteristics suggesting questionable transactions.
The firm said that there were undisclosed relationships between suppliers and customers, different customers, or suppliers were sharing the same contact information, and there was a lack of supporting logistics information. As a result, certain revenue in 2021 may have been inaccurately recorded in the company’s financial statements.
According to its disclosed financial results, in the first three quarters of 2021, Missfresh’s actual revenue was over-calculated by 157 million yuan ($23.4 million), 256 million yuan and 264 million yuan respectively than that in the firm’s previously disclosed report. Moreover, the overcharged costs were 162 million yuan, 265 million yuan and 272 million yuan, in the above periods.
Missfresh said that the individual employees in the Next-Day Delivery BU responsible for carrying out the questionable transactions had submitted their resignations before the review was completed. The review did not uncover any evidence indicating that management-level executives were aware of the questionable transactions at the time. The company has also terminated its relationships with suppliers and customers involved in the high-risk transactions identified.
On June 25 last year, Missfresh successfully listed on the Nasdaq with an issue price of $13 per share. Most of the shareholders of Missfresh have impressive backgrounds, including well-known investment institutions such as Tencent Investment, Jeneration Capital, CICC and Goldman Sachs, as well as state-owned assets.
However, as of the last trading day, its share price was $0.414 per apiece. In March this year, some media outlets reported that Missfresh was cut off by suppliers due to arrears in payment for goods as high as 10 million yuan.
On June 2, Missfresh received a notice from the Nasdaq, claiming that the closing bid price of the company’s ADSs during the previous 30 business days was below the minimum $1.00 per share set forth in the exchange’s listing rules. The company was provided with a compliance period of 180 calendar days.
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